Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except: (a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15); (b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note; (c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii); (d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note; (e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness; (f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii); (g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis; (h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business; (i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06; (j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments; (k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder; (l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence; (m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA; (n) Indebtedness consisting of (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; (o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; (p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice; (q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000; (r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit; (s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence; (t) Credit Agreement Refinancing Indebtedness; (u) Indebtedness incurred in reliance on the Cumulative Credit; (v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that: (i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence; (ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence; (iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness. (w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v); (x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 3 contracts
Sources: Credit Agreement (Signify Health, Inc.), Credit Agreement (Signify Health, Inc.), Credit Agreement (Signify Health, Inc.)
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding existing on the Closing Restatement Effective Date and listed set forth on Schedule 7.03(b9.3(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofRestatement Effective Date; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant subject to the Intercompany NoteSubordination Agreement;
(ci) Guarantees by the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any of the Restricted Subsidiaries otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 9.3(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 9.3); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth hereinin the Guaranty, and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness Indebtedness, and (Cii) any Guarantee by a Loan Party the Borrower or any Subsidiary Guarantor of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be would have been permitted to the extent constituting as an Investment permitted by the Borrower or such Subsidiary Guarantor in such Restricted Subsidiary under Section 7.02(c)(iii9.2(c);
(d) Indebtedness of the Borrower or any of the Restricted Subsidiary Subsidiaries owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)9.2; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (yi) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with Intercompany Subordination Agreement and (ii) in the terms event of any such Indebtedness in respect of the Intercompany Notesale, transfer or assignment of Current Asset Collateral, such Indebtedness shall be duly noted on the books and records of the Loan Parties as being owing in respect of Current Asset Collateral;
(e) (i) Attributable Indebtedness relating to any transaction and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any and the Restricted Subsidiary prior to or within 270 days after Subsidiaries financing the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an acquisition, construction, repair, replacement or improvement, and (ii) any Permitted Refinancing thereof; provided that the aggregate principal amount of Indebtedness (including Attributable Indebtedness) at any one time outstanding incurred pursuant to this clause (e) shall not to exceed the greater of $13,000,000 200,000,000 and 203.00% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Total Assets, in each case determined at the time of incurrence incurrence; provided, further, that for the purposes of determining compliance with this Section 9.3(e), Attributable Indebtedness shall not be deemed to arise from a sale leaseback transaction with respect to real property comprising a Store or distribution center that is originally treated under GAAP as an operating lease at the time such sale leaseback transaction is consummated but is subsequently treated under GAAP as a Capitalized Lease as the result of a change in GAAP (together with any Permitted Refinancings or interpretations thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtednessafter the Restatement Effective Date;
(f) Indebtedness in respect of Swap Contracts designed to hedge against Holdings’, the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of the Borrower and its Restricted Subsidiaries incurred in the ordinary course of business;
(ih) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.069.6;
(ji) Indebtedness incurred by Holdings the Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kj) Indebtedness consisting of obligations of Holdings or any of its the Borrower and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lk) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or thereof;
(l) Indebtedness of the honoring by Borrower and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding not to exceed the greater of $100,000,000 and 2.75% of Total Assets, in each case determined at the time of incurrence; provided that a bank or other financial institution maximum of a check, draft or similar instrument drawn against insufficient funds the greater of $25,000,000 and 1.00% of Total Assets in the ordinary course aggregate principal amount of business, so long as such Indebtedness is extinguished within 10 Business Days may be incurred by Non-Loan Parties, in each case determined at the time of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(on) Indebtedness incurred by the Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(po) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qi) letters of credit issued in currencies not available hereunder Indebtedness in an aggregate principal amount not to exceed the sum of (A) $1,925,000,000 plus (B) an amount equal to result of (x) $475,000,000 less (y) the aggregate principal amount of any incremental indebtedness incurred in reliance of Section 2.18(3) of the Second Lien Term Facility Credit Agreement (as in effect on the Restatement Effective Date), at any time outstanding under the First Lien Term Facility or under any document governing Incremental Equivalent Term Debt (as such term is defined in the First Lien Term Facility Credit Agreement (as in effect on the Restatement Effective Date)) and (ii) the amount of obligations in respect of (A) Specified Hedge Obligations and (B) Cash Management Obligations (in the case of each of the foregoing clauses (A) and (B), as defined in the First Lien Term Facility Credit Agreement (as in effect on the Restatement Effective Date)) at any time outstanding and not incurred in violation of Section 9.3(f), in each case and, in respect of clauses (i) and (ii), any Permitted Refinancing thereof, provided that, for the avoidance of doubt, the aggregate principal amount of incremental Indebtedness incurred pursuant to Section 9.3(p)(i)(b) and 9.3(q)(B) shall not exceed $475,000,000;
(q) Indebtedness in an aggregate principal amount not to exceed the sum of (A) $5,000,000625,000,000 plus (B) an amount equal to the result of (x) $475,000,000 less (y) the aggregate principal amount of any incremental indebtedness incurred in reliance of Section 2.18(3) of the First Lien Term Facility Credit Agreement (as in effect on the Restatement Effective Date), at any time outstanding under the Second Lien Term Facility or under any document governing Incremental Equivalent Term Debt (as such term is defined in the Second Lien Term Facility Credit Agreement (as in effect on the Restatement Effective Date)), and any Permitted Refinancing thereof, provided that, for the avoidance of doubt, the aggregate principal amount of incremental Indebtedness incurred pursuant to Sections 9.3(p)(i)(b) and 9.3(q)(B) shall not exceed $475,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (r) and then outstanding for all such Persons taken togetheroutstanding, does not exceed $25,000,000;
(i) other unsecured Indebtedness of the greater Borrower or any Restricted Subsidiary, so long as (A) the Payment Conditions shall have been satisfied after giving effect thereto and (B) the maturity date and Weighted Average Life to Maturity of $9,750,000 and 15% of Consolidated EBITDA such Indebtedness is at least six (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined 6) months after the Latest Maturity Date at the time of incurrenceincurrence of such Indebtedness and (ii) other Indebtedness that is secured and subordinated, provided that such Indebtedness (A) is not secured by any Current Asset Collateral, (B) is subject to an intercreditor agreement containing terms that are at least as favorable to the Secured Parties as those contained in the Intercreditor Agreement and (C) has a maturity date and Weighted Average Life to Maturity that is at least six (6) months after the Latest Maturity Date at the time of incurrence of such Indebtedness (and any Permitted Refinancing thereof);
(t) Credit Agreement Refinancing Indebtedness[reserved];
(u) Indebtedness incurred in reliance on respect of letters of credit issued for the Cumulative Creditaccount of any of the Subsidiaries of Holdings to finance the purchase of Inventory so long as (x) such Indebtedness is unsecured and (y) the aggregate face amount of such letters of credit does not exceed $100,000,000 at any time;
(v) Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the Restatement Effective Date, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary (other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the Restatement Effective Date) and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 9.1(p) and, in each case, any Permitted Refinancing thereof, and (ii) of the Borrower or any of its Restricted Subsidiaries Subsidiary incurred or assumed in connection with any Permitted Acquisition that is a Loan Party that complies with clauses secured only by Liens permitted under Section 9.1(p) (a), (cand any Permitted Refinancing of the foregoing) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to clause (v)(ii) does not exceed $50,000,000; provided that Indebtedness incurred under clause (i)(B) or clause (ii) of this paragraph (v) that is secured by assets of a type that would otherwise constitute Current Asset Collateral shall not exceed an aggregate amount so long as on outstanding of $25,000,000 and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal assets shall have been and at all times be segregated from, and not commingled with, Current Asset Collateral, with reasonably satisfactory evidence of compliance with the foregoing to (x) 3.75:1.00 or (y) be provided to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other InvestmentAdministrative Agent promptly upon request; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.and
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(v) above. Notwithstanding the foregoing, no Restricted Subsidiary that is a Non-Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Guarantor. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, plus the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 9.3. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP.
Appears in 3 contracts
Sources: Credit Agreement (BJ's Wholesale Club Holdings, Inc.), Credit Agreement (BJ's Wholesale Club Holdings, Inc.), Credit Agreement (BJ's Wholesale Club Holdings, Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any Loan Party of its Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) Indebtedness of the Borrowers in respect of the Senior Secured Notes (xand Guarantees thereof by the Guarantors) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiary Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunderhereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth hereinthat, (B) if the Indebtedness being Guaranteed guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness;
(Ce) any Guarantee by a Loan Party of Indebtedness of a the Parent Borrower or any Restricted Subsidiary that is not a Loan Party shall only be permitted owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms set forth in Section 3.01 of the Intercompany NoteGuaranty;
(ef) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09acquisition, construction, repair, replacement or improvement), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(mPermitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of such Attributable Indebtedness;
(f) any Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred set forth in the ordinary course of business immediately preceding clauses (i) and not for speculative purposes and Guarantees thereof(ii); provided that any such Guarantees by Loan Parties the aggregate principal amount of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed including without limitation Attributable Indebtedness, such but excluding Attributable Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect pursuant to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g7.03(f) shall does not exceed the greater of (x) $9,750,000 350,000,000 and (y) 1520.0% of Consolidated EBITDA of the Parent Borrower determined at for the time most recently ended Test Period;
(g) Indebtedness in respect of such incurrence on a Pro Forma BasisSwap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of Holdings the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.067.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(jk) Indebtedness incurred by Holdings the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of obligations of Holdings the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case incurred in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDAcourse;
(n) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is a non-Loan Party which, when aggregated pari passu with the principal amount Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all other relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
clause (t) Credit Agreement being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing Indebtednessthereof;
(u) additional Indebtedness incurred in reliance on an aggregate principal amount not to exceed the Cumulative Creditgreater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred assumed in connection with a Permitted Acquisition or other Investment permitted hereunderAcquisition, the greater of provided that (Ii) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior after giving Pro Forma Effect to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if and such Indebtedness is secured on a junior basis in right of security with the ObligationsIndebtedness, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Total Leverage Ratio (determined calculated on a Pro Forma Basis) as of the most recent Test Period is no more than either (x) 4.00:1.00 not greater than 7.00:1.00 or (y) to not greater than the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Total Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or other Investment; provided assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the aggregate principal amount at any time outstanding First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of Subsidiaries that are non-the Loan Parties Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(v7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $9,750,000 400,000,000 and (y) 1525.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(determined on i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Pro Forma Basis Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 1.092.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, in each case determined at the time of incurrence and (B) provided that if as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a term loan that borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is not subordinated in right a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of payment such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the Loan Documents maturity date of the Term Loans being refinanced) reflect market terms and that is secured by a Lien conditions on the Collateral that ranks pari passu date of issuance and such Indebtedness shall not participate in right of security mandatory prepayments on a greater than pro rata basis with the Term Loans, Loans and (E) the Term Loans shall be subject Parent Borrower has delivered to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations in this Section 7.03(vdemonstrating compliance with clauses (A), (AB), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.Permitted Receivables Financing;
(wy) Any Indebtedness in respect of Permitted Refinancings of Indebtedness Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 7.03(v);2.17 and any Permitted Refinancing thereof; and
(xz) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 3 contracts
Sources: Credit Agreement (Burger King Worldwide, Inc.), Credit Agreement (Tim Hortons Inc.), Credit Agreement (New Red Canada Partnership)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Obligations;
(b) Indebtedness (xincluding any unused commitment in respect thereof) Indebtedness outstanding on the Closing Date and listed on in Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Secured Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation of any Loan Party shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Secured Obligations on the terms set forth herein, herein and (B) if the Indebtedness being Guaranteed is subordinated to the Secured Obligations, such Guarantee shall be subordinated to the Guarantee of the Secured Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only), provided that, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting such Indebtedness is an Investment permitted by Section 7.02(c)(iii)7.02 or consists of any part of a Permitted Reorganization or IPO Reorganization Transaction; provided further that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Collateral Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Secured Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset thereof in an aggregate amount not to exceed the greater of $13,000,000 3,750,000 and 2012.5% of Trailing Four-Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)EBITDA, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Secured Hedge Obligations and other Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary (i) assumed or incurred in connection with any Permitted Acquisition or other similar Investment not prohibited hereunderpermitted hereunder and any Permitted Refinancing thereof; provided that (ix) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other similar Investment permitted hereunder or any Permitted Refinancing thereof and (y) the obligors with respect to such Indebtedness are limited to the Persons acquired in such Permitted Acquisition or Investment or (ii) incurred to finance any Permitted Acquisition or Investment permitted hereunder (including earn-out obligations, Indebtedness incurred to finance the payment thereof and seller notes); provided, that after giving Pro Forma Effect pro forma effect to such Permitted Acquisition or Investment permitted hereunder and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness incurred pursuant to this clause (ii) does not exceed at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 4,500,000 and 2515.0% of Trailing Four Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00EBITDA, in each case case, determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA as of the Borrower determined at the time applicable date of such incurrence on a Pro Forma Basisincurrence;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former managers, officers, managersdirectors, consultantsadvisors, directors and service providers, consultants or employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in connection with the Transactions, a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price adjustments or other similar adjustments (including earn-outs) or other similar adjustmentsouts and obligations in respect of transaction tax benefits);
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries 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;
(l) (i) Secured Cash Management Obligations and Obligations, (ii) other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management Cash Management Services and similar arrangements in the ordinary course of business and any Guarantees thereof or thereof, (iii) Indebtedness resulting from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of businessbusiness and solely with respect to each incurrence pursuant to this clause (iii), so long as such Indebtedness is extinguished within 10 Business Days of its incurrence, and (iv) endorsement of instruments or other payment items for deposit in the ordinary course of business;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 10,000,000 and 3533.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of incurrence;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) to extent constituting Indebtedness, obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case case, in the ordinary course of business or consistent with past practicepractice or to the extent required by Laws or pursuant to any statutory filing;
(q) letters of credit in an aggregate face amount at any time outstanding not to exceed the greater of $3,000,000 and 10.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of incurrence consisting of (i) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding or (ii) documentary or commercial letters of credit not to exceed $5,000,000issued hereunder;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Restricted Subsidiary that is not a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s7.03(u) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 5,250,000 and 1517.5% of Trailing Four Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)EBITDA, in each case determined at as of the time date of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings and Limited Originator Recourse) to the Borrower or any of its the Restricted Subsidiaries Subsidiaries; provided, that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness at any time outstanding in connection therewith shall not exceed $15,000,000;
(w) [reserved];
(x) [reserved];
(y) unsecured Indebtedness in an amount so equal to the lesser of 100% of the net cash proceeds received by Holdings (or any direct or indirect parent thereof) since immediately after the Closing Date from the issuance or sale of Equity Interests of Holdings (or any direct or indirect parent thereof) or cash contributed to the capital of Holdings (or any direct or indirect parent thereof) (in each case, other than proceeds of Disqualified Equity Interests or sales of Equity Interests to Holdings (or any direct or indirect parent thereof) or any of its Subsidiaries) to the extent such net cash proceeds or cash have been contributed to the Borrower and have not been applied pursuant to Section 7.02, 7.06 or 7.13 and do not constitute Cure Amounts;
(i) Indebtedness in respect of Other Term Loans and Other Notes incurred or issued in accordance with Section 2.14 and (ii) Permitted Refinancings thereof;
(aa) Indebtedness incurred by the Borrower as a result of the exchange of Term Loans assigned to the Borrower pursuant to Section 10.07(k), as long as on such Indebtedness would be a Permitted Refinancing of such Term Loans;
(bb) obligations in respect of Disqualified Equity Interests (x) issued to and held by the Borrower, Holdings or any Restricted Subsidiary (to the extent permitted by Section 7.02) or (y) in an amount not to exceed the greater of $1,200,000 and 4.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio incurrence;
(determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(icc) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent intercompany Indebtedness incurred in connection with a Permitted Acquisition Reorganization or other IPO Reorganization Transaction, so long as such intercompany Indebtedness constitutes an Investment permitted hereunderpursuant to Section 7.02(j); and
(dd) Indebtedness in respect of aircraft or related equipment financing in an amount not to exceed $20,000,000 at any time outstanding (together with any amounts incurred under any Aircraft Trust Arrangement); provided, the greater of that, (I) 3.75:1.00 and any such Indebtedness that constitutes Pari Passu Secured Obligations shall be subject to the separate agreement among the Lenders entered into on the Closing Date or a Parity Intercreditor Agreement, as applicable, (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if any such Indebtedness that is incurred pursuant to Section 7.03(a), Section 7.03(s), Section 7.03(t), Section 7.03(u), Section 7.03(z) or Section 7.03(aa) and is secured by the Collateral on a junior basis shall be subject to a Junior Intercreditor Agreement, and (III) any such Indebtedness that constitutes Pari Passu Secured Obligations or which is secured by the Collateral on a junior basis shall be junior in right of security payment to the Revolving Facility to the extent set forth in such agreement among Lenders or such Intercreditor Agreement. For purposes of determining compliance with any Dollar-denominated restriction on the Obligationsincurrence of Indebtedness, the aggregate Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09)was incurred, in each the case determined at of term debt, or first committed, in the time case of incurrence and (B) revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, Refinance, renew or defease other Indebtedness denominated in a term loan that is not subordinated foreign currency, and such extension, replacement, refunding, Refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in right of payment to the Loan Documents and that is secured by a Lien effect on the Collateral that ranks pari passu in right date of security with the Term Loanssuch extension, the Term Loans replacement, refunding, Refinancing, renewal or defeasance, such Dollar-denominated restriction shall be subject deemed not to have been exceeded so long as the “most favored nation” pricing adjustment (if applicable) set forth in principal amount of such Refinancing Indebtedness does not exceed the proviso to Section 2.14(e)(iii) as if principal amount of such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of being extended, replaced, refunded, Refinanced, renewed or defeased, plus the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum aggregate amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtednessfees, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all underwriting discounts, premiums (if any), interest including tender premiums) and other costs and expenses (including OID) incurred in connection with such Refinancing. Interest (including post-petition interest), the accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and premiums (if any), fees, expenses, charges and additional or contingent interest on obligations shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in Sections 7.03(a) through 7.03(w7.03(dd);, the Borrower shall, in its sole discretion, divide or classify or later divide or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents on the Closing Date will be deemed to be incurred in reliance on the exception in Section 7.03(a).
Appears in 3 contracts
Sources: Credit Agreement (AEVEX Corp.), Credit Agreement (AEVEX Corp.), Credit Agreement (AEVEX Corp.)
Indebtedness. CreateNo Credit Party shall, nor shall it permit any of its Subsidiaries nor any Qualifying Reciprocal Entity in respect of which it is appointed as attorney-in-fact to, directly or indirectly, create, incur, assume or suffer guaranty, or otherwise become or remain directly or indirectly liable with respect to exist any Indebtedness, exceptother than:
(a) the Obligations;
(i) Unsecured Indebtedness of any Loan Credit Party under the Loan Documents owing to any other Credit Party; (including any Indebtedness incurred pursuant to Section 2.14 or 2.15);
(bii) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany unsecured Indebtedness of any Loan Party owed to Subsidiary or other Regulated Entity that (in any Restricted Subsidiary that such case) is not a Loan Credit Party owing to any other Subsidiary or other Regulated Entity that (in any such case) is not a Credit Party; and (iii) unsecured Indebtedness of any Credit Party owing to any Subsidiary or other Regulated Entity that (in any such case) is not a Credit Party, provided, that, (A) the aggregate outstanding amount of Indebtedness incurred in reliance on this clause (b)(iii) shall not exceed Five-Hundred Thousand Dollars ($500,000) at any time, and (B) any such Indebtedness incurred or outstanding in reliance on this clause (b)(iii) shall be unsecured and subordinated in right of payment (by operation of the terms of an applicable subordination agreement entered into with the Administrative Agent) to the prior Payment in Full of the Obligations pursuant on terms reasonably acceptable to the Intercompany NoteAdministrative Agent;
(c) Guarantees by the Borrower and any Restricted Subsidiary in with respect of to Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunderunder this Section 8.1; provided that provided, that, any Guarantees granted or in effect in reliance on this clause (Ac) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of subordinated to the Obligations on if, and to the terms set forth hereinextent that, (B) if the Indebtedness being Guaranteed guaranteed thereby is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of existing on the Borrower or Closing Date and described in Schedule 8.1, together with any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany NotePermitted Refinancing thereof;
(e) Indebtedness with respect to (i) Attributable Capital Leases (provided, that, any such Indebtedness shall be secured only by the asset subject to such Capital Lease), and other (ii) purchase money Indebtedness (including Capitalized Leases) financing an acquisitionprovided, constructionthat, repair, replacement, lease or improvement of a fixed or capital asset incurred any such Indebtedness shall be secured only by the Borrower or any Restricted Subsidiary prior to or within 270 days after asset acquired in connection with the acquisitionincurrence of such Indebtedness); provided, constructionthat, repair, replacement, lease or improvements the sum of the applicable asset in an aggregate principal amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA any Indebtedness under this clause (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereofe) at any time outstanding and shall not exceed Five-Hundred Thousand Dollars (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness$500,000);
(f) Indebtedness in respect of any Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred Agreement that is entered into in the ordinary course of business and not to hedge, limit or mitigate risks to which any Credit Party, any Subsidiary or any other Regulated Entity is exposed in the conduct of its business or the management of its liabilities (it being acknowledged by each Credit Party that a Swap Agreement entered into for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties purposes, or otherwise of such Indebtedness a speculative nature, is not a Swap Agreement entered into in the ordinary course of Restricted Subsidiaries that are not Loan Parties shall only be permitted business to the extent constituting an Investment permitted by Section 7.02(c)(iiihedge, limit or mitigate risks);
(g) Indebtedness of to the Borrower or any Restricted Subsidiary assumed or incurred extent constituting Indebtedness, all obligations in connection with any each Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtednessincluding, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtednesswithout limitation, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (iiEarn Out Obligations), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to officers, directors, employees of Holdings any Credit Party, any Subsidiary or any of its Restricted Subsidiaries incurred in the ordinary course of businessother Regulated Entity;
(i) Guarantees (i) by any Credit Party of Indebtedness consisting of promissory notes issued any Subsidiary (other than any Regulated Subsidiary) that is not a Credit Party, and (ii) by Holdings any Subsidiary (other than any Regulated Subsidiary) of Indebtedness of any Credit Party or of any other Subsidiary (other than any Regulated Subsidiary) that is not a Credit Party; provided, that, (A) Guarantees by any Credit Party of its Restricted Subsidiaries Indebtedness of any Subsidiary (other than any Regulated Subsidiary) that is not a Credit Party shall be subject to current compliance with Section 8.6, and (B) any Guarantees granted or former officersin effect in reliance on this clause (i) shall be subordinated to the Obligations if, managersand to the extent that, consultants, directors and employees, their respective estates, spouses or former spouses the Indebtedness guaranteed thereby is subordinated to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06Obligations;
(j) Indebtedness incurred by Holdings or owed to any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price Person (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankerscredit for the benefit of such Person) providing workers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claimscompensation, health, disability or other employee benefits or property, casualty or casualty, liability insurance or insurance, self-insurance, pursuant to reimbursement or indemnification obligations to such Person or to finance insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretopremiums, in each case incurred in the ordinary course of business or and consistent with past practice;
(qk) Indebtedness in respect of or guarantee of performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees, workers’ compensation claims, letters of credit issued credit, bank guarantees and banker’s acceptances, warehouse receipts or similar instruments and similar obligations (other than in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter respect of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09borrowed money), in each case determined at provided in the time ordinary course of incurrencebusiness and consistent with past practice; provided, that, any Indebtedness arising from the provision by any Credit Party of any of the foregoing for the benefit of any Person that is not a Credit Party is subject to compliance with Section 8.6;
(tl) cash management obligations and other Indebtedness in respect of netting services, overdraft protection and similar arrangements, in each case, in connection with cash management and deposit accounts maintained in the ordinary course of business;
(m) to the extent constituting Indebtedness, Guarantees in the ordinary course of business of the obligations of suppliers, customers, franchisees and licensees of the Credit Agreement Refinancing Parties and Subsidiaries (other than any Regulated Entities);
(n) performance guarantees primarily guaranteeing performance of contractual obligations to a third party and not for the purpose of guaranteeing payment of Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(vi) Indebtedness of the Borrower a Regulated Entity under “surplus notes” owing to one (1) or any of its Restricted more other Credit Parties, Subsidiaries that is a Loan Party that complies with clauses (a)or other Regulated Entities, (cii) Indebtedness of a Qualifying Reciprocal Entity under “surplus notes” owing to one (1) or more Persons other than the Credit Parties, Subsidiaries and other Regulated Entities, and (diii) Indebtedness of a Regulated Subsidiary under “surplus notes” owing to one (as applicable1) of or more Persons other than the Applicable RequirementsCredit Parties, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition TransactionSubsidiaries and other Regulated Entities, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided provided, that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of Indebtedness permitted in reliance on this clause (o)(iii) shall not exceed Fifty Million Dollars ($50,000,000) at any time outstanding; provided, that, in any such case of the foregoing clauses (o)(i) through (o)(iii), (A) such Indebtedness shall not exceed an amount so long as on and as be subordinated to the policyholders of the date applicable Regulated Entity, (B) payments of principal of, and interest on, such incurrence Indebtedness shall only be made upon the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding prior written consent of the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunderapplicable Governmental Authority, the greater of (I) 3.75:1.00 and (IIC) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall constitute equity in accordance with SAP;
(p) Indebtedness of any of the Regulated Entities owing to, and in the form of (or incurred pursuant to) loans, funding agreements, and/or guaranteed investment contracts entered into by such Regulated Entity with, a FHLB in connection with the membership of such Regulated Entity in or with such FHLB in the ordinary course of business; provided, that, any such Indebtedness incurred in reliance on this clause (p) is not exceed recourse to any of the Credit Parties; and
(q) other unsecured Indebtedness of the Credit Parties, Subsidiaries and other Regulated Entities in an aggregate amount not exceeding One Million Dollars ($1,000,000) at any time outstanding. Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest, premium, fees or expenses, in the form of additional Indebtedness, or preferred stock (in each case, so long as such additional Indebtedness or preferred stock is in the same form and on and the same terms as of the date of Indebtedness to which such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(vpayment relates) shall not exceed the greater be deemed to be an incurrence of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For for purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness8.1.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 3 contracts
Sources: Credit Agreement (Safepoint Holdings, Inc.), Credit Agreement (Safepoint Holdings, Inc.), Credit Agreement (Safepoint Holdings, Inc.)
Indebtedness. Create(a) The Borrower (i) shall not, incurand shall not permit any other Specified Loan Party to, assume and by its execution hereof the Parent Guarantor agrees that it shall not, assume, create, incur or suffer to exist any Indebtedness, except:
(a) Indebtedness to the Parent Guarantor or any of any Loan Party under the Loan Documents (including any its Subsidiaries unless such Indebtedness incurred pursuant to Section 2.14 or 2.15);
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and fully subordinated to the Obligations pursuant on terms satisfactory to the Intercompany Note;
Administrative Agent and (cii) Guarantees by the Borrower and shall not permit any Restricted Subsidiary in respect of Guarantor or Operating Lessee to create, assume, incur or suffer to exist any Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that other than (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be as permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth hereinin clause (i), (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary trade payables and equipment leases that is not a Loan Party shall only be permitted are normal and customary both as to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing their terms and as to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement their amounts and (yD) all such Indebtedness Guaranties of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred Franchise Agreements entered into in the ordinary course of business;.
(b) The Borrower shall not, and shall not permit any other Specified Loan Party or any of its or their respective Subsidiaries to, and by its execution hereof the Parent Guarantor agrees that it shall not and shall not permit any of its Subsidiaries to, prepay any principal of, or accrued interest on, any Subordinated Debt or otherwise make any voluntary or optional payment with respect to any principal of, or accrued interest on, any Subordinated Debt prior to the originally scheduled maturity date thereof or otherwise redeem or acquire for value any Subordinated Debt. Further, the Borrower shall not, and shall not permit any other Specified Loan Party or any of its or their respective Subsidiaries to, and by its execution hereof the Parent Guarantor agrees that it shall not and shall not permit any of its Subsidiaries to, amend or modify, or permit the amendment or modification of, any agreement or instrument evidencing any Subordinated Debt where such amendment or modification provides for the following or which has any of the following effects:
(i) Indebtedness consisting increases the rate of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06interest accruing on such Subordinated Debt;
(jii) Indebtedness incurred by Holdings increases the amount of any scheduled installment of principal or interest, or shortens the date on which any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger such installment or any Disposition permitted hereunder, in each case, constituting indemnification obligations principal or obligations in respect of purchase price (including earn-outs) or other similar adjustmentsinterest becomes due;
(kiii) Indebtedness consisting shortens the final maturity date of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunderSubordinated Debt;
(liv) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with increases the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative CreditSubordinated Debt;
(v) Indebtedness of amends any financial or other covenant contained in any document or instrument evidencing any Subordinated Debt in a manner which is more onerous to the Borrower or any of its Restricted Subsidiaries that is a Borrower, such Loan Party that complies with clauses (a)or such Subsidiary or which requires the Borrower, (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default such Loan Party or Event of Default (limited in connection with Indebtedness incurred such Subsidiary to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrenceimprove its financial performance;
(iivi) if such Indebtedness is secured on a junior basis provides for the payment of additional fees or the increase in right of security with existing fees; and/or
(vii) otherwise could reasonably be expected to be adverse to the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as interests of the date of such incurrence Administrative Agent or the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of IndebtednessLenders.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 3 contracts
Sources: Credit Agreement (Chesapeake Lodging Trust), Credit Agreement (Chesapeake Lodging Trust), Credit Agreement (Chesapeake Lodging Trust)
Indebtedness. Create, incur, assume No Restricted Subsidiary will in any manner owe or suffer to exist any Indebtedness, be liable for Indebtedness except:
(a) Indebtedness of any Loan Party under owed by the Loan Documents (including any Restricted Subsidiaries to the Borrower or unsecured Indebtedness incurred pursuant owed by the Restricted Subsidiaries to Section 2.14 or 2.15)a wholly-owned Restricted Subsidiary;
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed the Restricted Subsidiaries for plugging and abandonment bonds issued by third parties or for letters of credit issued in place thereof which are required by regulatory authorities in the area of operations, and Indebtedness of the Restricted Subsidiaries for other bonds or letters of credit which are required by such regulatory authorities with respect to any Restricted Subsidiary that is not a Loan Party shall be unsecured other normal oil and subordinated to the Obligations pursuant to the Intercompany Notegas operations;
(c) Guarantees by Acquired Debt which meets the Borrower following requirements: (i) the documentation evidencing such Indebtedness shall contain no terms, conditions or defaults (other than pricing and any Restricted Subsidiary in respect the grant of Indebtedness of the Borrower or any Restricted Subsidiary otherwise a Lien which is permitted hereunder; provided that (Aunder this Agreement) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated which are more favorable to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as third party creditor in any material respect than those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted this Agreement are to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding Lenders and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issuedincurred, (B) no Event of Default shall exist or result therefrom have occurred and be continuing hereunder;
(other than in connection with a Limited Condition Transaction where the standard shall be no Default d) Reserved;
(e) Indebtedness under Swap Contracts permitted under Section 8.01(a7.10; and
(f) or 8.01(f)other Indebtedness; provided, at the time of incurrence thereof, after giving pro forma effect thereto, the Restricted Subsidiaries’ Consolidated Indebtedness (excluding Indebtedness described in clause (a) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g7.01) shall not exceed the greater of (x) $9,750,000 and (y) 1565% of the Restricted Subsidiaries’ Consolidated EBITDA Capital. As used herein, “Restricted Subsidiaries’ Consolidated Indebtedness means, on a consolidated basis, the aggregate outstanding principal amount of Indebtedness of the Borrower determined at the time of such incurrence Restricted Subsidiaries, and “Restricted Subsidiaries’ Consolidated Capital” means, on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect toconsolidated basis, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting sum of (i) the financing of insurance premiums or Restricted Subsidiaries’ Consolidated Indebtedness plus (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankersSubsidiaries’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (Shareholders’ Equity as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of IndebtednessRestricted Subsidiaries’ most recent balance sheet.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 3 contracts
Sources: Term Loan Agreement (Questar Corp), 364 Day Revolving Credit Agreement (Questar Corp), 364 Day Revolving Credit Agreement (Questar Corp)
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding existing on the Closing Date and listed date hereof set forth on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofdate hereof; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant subject to the Intercompany NoteSubordination Agreement;
(ci) Guarantees by Holdings, the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any of the Restricted Subsidiaries otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Guaranty and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (Cii) any Guarantee Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a would have been permitted as an Investment by such Loan Party shall only be permitted to the extent constituting an Investment permitted by in such Restricted Subsidiary under Section 7.02(c)(iii7.02(c);
(d) Indebtedness of the Borrower or any of the Restricted Subsidiary Subsidiaries owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany NoteSubordination Agreement;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any and the Restricted Subsidiary prior to or within 270 days after Subsidiaries financing the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding construction, repair, replacement or improvement and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and transactions, and, in each case, any Permitted Refinancing thereof; provided that the aggregate principal amount of such Attributable IndebtednessIndebtedness at any one time outstanding incurred pursuant to this clause (e) shall not exceed the greater of $50,000,000 and 1.75% of Total Assets, in each case determined at the time of incurrence;
(f) Indebtedness in respect of Swap Contracts designed to hedge against Holdings’, the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the date hereof, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary (other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the date hereof) and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 7.01(p) and, in each case, any Permitted Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary incurred or assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that is secured only by Liens permitted under Section 7.01(p) (iand any Permitted Refinancing of the foregoing) solely in and so long as the case aggregate principal amount of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or and all Indebtedness resulting from any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding pursuant to clause (g)(ii) does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis50,000,000;
(h) Term Loan Refinancing Debt;
(i) Indebtedness representing deferred compensation to employees of Holdings or any of the Borrower and its Restricted Subsidiaries incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.06;
(jk) Indebtedness incurred by Holdings the Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of obligations of Holdings or any of its the Borrower and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Original Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(mn) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount that at the any time of, and after giving effect to, the incurrence thereof, would outstanding not to exceed the greater of $22,750,000 100,000,000 and 353.25% of Consolidated EBITDATotal Assets, in each case determined at the time of incurrence; provided that a maximum of the greater of $25,000,000 and 1.00% of Total Assets in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties, in each case determined at the time of incurrence;
(no) 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;
(op) Indebtedness incurred by the Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qi) letters of credit issued in currencies not available hereunder Indebtedness in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed $375,000,000 at any time outstanding under the face ABL Facilities and (ii) the amount of such Letter obligations in respect of Creditany Secured Hedge Agreement and any Secured Cash Management Agreement (in each case, as defined in the ABL Credit Agreement) at any time outstanding and not incurred in violation of Section 7.03(f) and, in respect of clauses (i) and (ii), any Permitted Refinancing thereof;
(s) [Reserved];
(t) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (t) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness25,000,000;
(u) Indebtedness incurred in reliance on the Cumulative CreditPermitted Ratio Debt and any Permitted Refinancing thereof;
(v) Indebtedness of incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to the Borrower or any of its the Restricted Subsidiaries that is a Loan Party that complies with clauses Subsidiaries;
(a), (cw) and (d) (as applicable) Indebtedness in respect of letters of credit issued for the account of any of the Applicable Requirements, Subsidiaries of Holdings to finance the purchase of inventory so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(ax) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, unsecured and (y) the aggregate principal amount of such Indebtedness shall does not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount $50,000,000 at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)time;
(x) in the case of Holdings, Qualified Holding Company Debt; and
(y) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w(x) above. Notwithstanding the foregoing, no Restricted Subsidiary that is a Non-Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Guarantor. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, plus the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP. Notwithstanding anything to the contrary contained in this Agreement, Indebtedness incurred pursuant to the ABL Facilities (and any Permitted Refinancing thereof) may only be incurred pursuant to Section 7.03(r);.
Appears in 2 contracts
Sources: Credit Agreement (Chinos Holdings, Inc.), Credit Agreement (J Crew Group Inc)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding on the Closing First Amendment Effective Date and listed on in Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness among the Borrower and any Subsidiary of the Borrower outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness of the Borrower or any Loan Party Subsidiary Guarantor owed to any Restricted Subsidiary that is not a Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary of the Borrower in respect of Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation Obligation, Incremental Equivalent Debt or Permitted Ratio Debt shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) if such Guaranty is by the Borrower or any Guarantee by a Loan Party Subsidiary Guarantor in respect of Indebtedness of a Restricted Subsidiary that is not a Loan Party Subsidiary Guarantor, such Guaranty shall only be permitted to the extent constituting an constitute a Restricted Investment permitted by Section 7.02(c)(iii7.06 or a Permitted Investment (other than under clause (1) of the definition of “Permitted Investments”);
(d) Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower owing to any Loan Party the Borrower or any other Restricted Subsidiary (of the Borrower or issued or transferred to any direct or indirect parent of a Loan Party the Borrower which is substantially contemporaneously transferred to a Loan Party the Borrower or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, Borrower to the extent constituting an a Restricted Investment permitted by Section 7.02(c)(iii)7.06 or a Permitted Investment; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of the Borrower or any Loan Party Subsidiary Guarantor owed to any Restricted Subsidiary that is not a Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary of the Borrower prior to or within 270 two hundred seventy (270) days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of $13,000,000 20,000,000 and 2020.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)EBITDA, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) any Sale Leaseback Transaction and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against Holdings’, the Borrower’s or any Restricted Subsidiary’s of its Subsidiaries’ exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower (i) assumed or incurred (including Acquired Indebtedness) in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (iii) solely incurred to finance a Permitted Acquisition and, in the case of assumed Indebtednessclauses (i) and (ii), such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) of any such Indebtedness, in each case, not exceed in the aggregate at any time outstanding the greater of $20,000,000 and 20.0% of Consolidated EBITDA determined at the time of incurrence; provided that after giving Pro Forma Effect to such Permitted Acquisition and the assumption or incurrence of such Indebtedness, as applicableIndebtedness incurred or assumed pursuant to this clause (g), the aggregate amount of Consolidated Total Net Rent Adjusted Leverage Ratio does not exceed 5.25:1.00. provided that (1) any such Indebtedness incurred (but not assumed) does not mature or have scheduled amortization or payments of principal (other than customary “AHYDO catch-up payments”, customary offers to repurchase and prepayment events upon a change of control, asset sale or event of loss and a customary acceleration right after an event of default) prior to the date that is 91 days following the then Latest Maturity Date at the time such Indebtedness is incurred and (2) all such Indebtedness incurred by Non-Loan Parties, together with all Permitted Ratio Debt incurred by Non-Loan Parties, does not exceed in the aggregate at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 25,000,000 and 2525.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00EBITDA, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower (and any direct or indirect parent thereof) or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests or other equity-based awards of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment expressly permitted hereunderunder this Agreement;
(l) Cash Management Obligations obligations under Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(m) Indebtedness in an aggregate which, when aggregated with the principal amount that at the time ofof all other Indebtedness incurred pursuant to this clause (m) and then outstanding, and after giving effect to, the incurrence thereof, would does not exceed the greater of $22,750,000 25,000,000 and 3525.0% of Consolidated EBITDAEBITDA (in each case determined at the time of incurrence or assumption, it being understood that any Indebtedness incurred pursuant to this Section 7.03(m) shall cease to be deemed incurred or outstanding for purposes of this Section 7.03(m) but shall be deemed incurred for the purposes of this covenant from and after the first date on which the Borrower or such Subsidiary of the Borrower could have incurred such Indebtedness under Section 7.03(s) without reliance on this Section 7.03(m));
(n) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, incurred in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000[Reserved];
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) [Reserved];
(u) Indebtedness incurred by of a Restricted Subsidiary that is a nonNon-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (u) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 15,000,000 and 1515.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time date of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) incurrence or issuance, it being understood that any Indebtedness incurred in pursuant to this Section 7.03(u) shall cease to be deemed incurred or outstanding for purposes of this Section 7.03(u) but shall be deemed incurred or issued for the purposes of this covenant from and after the first date on which the Borrower or such Subsidiary could have incurred such Indebtedness under Section 7.03(s) without reliance on the Cumulative Creditthis Section 7.03(u));
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence[Reserved];
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: First Amendment to Credit Agreement (Portillo's Inc.), First Amendment to Credit Agreement (Portillo's Inc.)
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding existing on the Closing Date and listed date hereof set forth on Schedule 7.03(b9.3(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofdate hereof; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant subject to the Intercompany NoteSubordination Agreement;
(ci) Guarantees by the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any of the Restricted Subsidiaries otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 9.3(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 9.3); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth hereinin the Guaranty, and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness Indebtedness, and (Cii) any Guarantee Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a would have been permitted as an Investment by such Loan Party shall only be permitted to the extent constituting an Investment permitted by in such Restricted Subsidiary under Section 7.02(c)(iii9.2(c);
(d) Indebtedness of the Borrower or any of the Restricted Subsidiary Subsidiaries owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)9.2; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (yi) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with Intercompany Subordination Agreement and (ii) in the terms event of any such Indebtedness in respect of the Intercompany Notesale, transfer or assignment of Current Asset Collateral, such Indebtedness shall be duly noted on the books and records of the Loan Parties as being owing in respect of Current Asset Collateral;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any and the Restricted Subsidiary prior to or within 270 days after Subsidiaries financing the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding construction, repair, replacement or improvement and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and transactions, and, in each case, any Permitted Refinancing thereof; provided that the aggregate principal amount of such Attributable IndebtednessIndebtedness at any one time outstanding incurred pursuant to this clause (e) shall not exceed the greater of $50,000,000 and 1.75% of Total Assets, in each case determined at the time of incurrence;
(f) Indebtedness in respect of Swap Contracts designed to hedge against Holdings’, the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of the Borrower and its Restricted Subsidiaries incurred in the ordinary course of business;
(ih) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.069.6;
(ji) Indebtedness incurred by Holdings the Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kj) Indebtedness consisting of obligations of Holdings or any of its the Borrower and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lk) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or thereof;
(l) Indebtedness of the honoring by Borrower and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding not to exceed the greater of $100,000,000 and 3.25% of Total Assets, in each case determined at the time of incurrence; provided that a bank or other financial institution maximum of a check, draft or similar instrument drawn against insufficient funds the greater of $25,000,000 and 1.00% of Total Assets in the ordinary course aggregate principal amount of business, so long as such Indebtedness is extinguished within 10 Business Days may be incurred by Non-Loan Parties, in each case determined at the time of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(on) Indebtedness incurred by the Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(po) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qi) letters of credit issued in currencies not available hereunder Indebtedness in an aggregate principal amount not to exceed $1,475,000,000 at any time outstanding under the Term Facility and (ii) the amount of obligations in respect of (ii)(A) obligations under Secured Hedge Agreements and (B) Cash Management Obligations (in the case of each of the foregoing clauses (A) and (B), as defined in the Term Facility Credit Agreement) at any time outstanding and not to exceed $5,000,000incurred in violation of Section 9.3(f), in each case and, in respect of clauses (i) and (ii), any Permitted Refinancing thereof;
(i) Indebtedness in respect of the Senior Notes (including any guarantees thereof) and (ii) any Permitted Refinancing thereof;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (r) and then outstanding for all such Persons taken togetheroutstanding, does not exceed $25,000,000;
(i) other unsecured Indebtedness of the greater Borrower or any Restricted Subsidiary, so long as (A) the Payment Conditions shall have been satisfied after giving effect thereto and (B) the maturity date and Weighted Average Life to Maturity of $9,750,000 and 15% of Consolidated EBITDA such Indebtedness is at least six (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined 6) months after the Latest Maturity Date at the time of incurrenceincurrence of such Indebtedness and (ii) other Indebtedness that is secured and subordinated, provided that such Indebtedness (A) is not secured by any Current Asset Collateral, (B) is subject to an intercreditor agreement containing terms that are at least as favorable to the Secured Parties as those contained in the Intercreditor Agreement and (C) has a maturity date and Weighted Average Life to Maturity that is at least six (6) months after the Latest Maturity Date at the time of incurrence of such Indebtedness (and any Permitted Refinancing thereof);
(t) Credit Agreement Refinancing Indebtedness[reserved];
(u) Indebtedness incurred in reliance on respect of letters of credit issued for the Cumulative Credit;
(v) Indebtedness account of any of the Borrower or any Subsidiaries of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) Holdings to finance the purchase of the Applicable Requirements, Inventory so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(ax) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, unsecured and (y) the aggregate principal amount of such Indebtedness shall does not exceed an amount $50,000,000 at any time;
(v) Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the date hereof, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary (other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the date hereof) and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 9.1(p) and, in each case, any Permitted Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary incurred or assumed in connection with any Permitted Acquisition that is secured only by Liens permitted under Section 9.1(p) (and any Permitted Refinancing of the foregoing) and so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to clause (v)(ii) does not exceed $50,000,000; provided that Indebtedness incurred under clause (i)(B) or clause (ii) of this paragraph (v) that is secured by assets of a type that would otherwise constitute Current Asset Collateral shall not exceed an aggregate amount so long as on outstanding of $25,000,000 and as any such assets shall have been and at all times be segregated from, and not commingled with, Current Asset Collateral, with reasonably satisfactory evidence of compliance with the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) foregoing to be provided to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other InvestmentAdministrative Agent promptly upon request; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.and
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(v) above. Notwithstanding the foregoing, no Restricted Subsidiary that is a Non-Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Guarantor. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, plus the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 9.3. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP.
Appears in 2 contracts
Sources: Credit Agreement (Chinos Holdings, Inc.), Credit Agreement (J Crew Group Inc)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of Holdings, the Company and any Loan Party of its Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi)(x) Indebtedness outstanding on the Closing Date date hereof and listed on Schedule 7.03(b) and (y) any Permitted Refinancing thereof (to the extent (A) such Permitted Refinancing is incurred by the Person who is the obligor of the Indebtedness subject to such Permitted Refinancing, (B) such Permitted Refinancing, if incurred by a Person who is not a Loan Party, is in respect of Indebtedness originally incurred by a Person who is not a Loan Party, or (C) such incurrence is otherwise permitted under this Section 7.03) and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany NoteDate;
(c) Guarantees by Holdings, the Borrower Company and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness otherwise permitted hereunder of the Borrower Company or any Restricted Subsidiary otherwise to the extent constituting an Investment permitted hereunderunder Section 7.02; provided that (A) no Guarantee by any Restricted Subsidiary of the Senior Subordinated Notes or any Indebtedness constituting a junior lien financing or Specified other Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth hereinin the Guarantee and Security Agreement, (B) 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 (as reasonably determined by the Borrower) to the Lenders (in the reasonable good faith determination of the Company) as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of may not Guarantee Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted unless such Loan Party could have incurred such Indebtedness or such Guarantee is subordinated to the Obligations on the terms set forth in Section 5.1(b) of the Guarantee and Security Agreement;
(d) Indebtedness of the Company or any Restricted Subsidiary owing to the Company or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) that, all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms set forth in Section 5.1(b) of the Intercompany NoteGuarantee and Security Agreement;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding construction, repair, replacement or improvement, and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtednessany Indebtedness set forth in the immediately preceding clause (i); provided that the aggregate principal amount of all Indebtedness permitted under this Section 7.03(e) shall not exceed $50,000,000 at any time outstanding;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower Company or any Restricted Subsidiary (i) assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunderAcquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment (ii) incurred to finance a Permitted Acquisition, in each case, that is secured only by the assets or business (including any Equity Interests) acquired in the applicable Permitted Acquisition and so long as both immediately prior and after giving effect thereto, (A) no Event of Default shall exist or result therefrom, (B) the Company and the Restricted Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.10, such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such Indebtedness had been assumed or incurred as of the first day of the fiscal period covered thereby and evidenced by a certificate from the Chief Financial Officer of the Company demonstrating such compliance calculation in reasonable detail, (C) the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this paragraph (g) (together with the aggregate principal amount of Indebtedness incurred pursuant to Section 7.03(h)(y)) does not exceed $150,000,000, and (D) the aggregate principal amount of Indebtedness pursuant to this clause (g) and clause (h) below assumed by Restricted Subsidiaries that are not Loan Parties in connection with or incurred by Restricted Subsidiaries that are not Loan Parties to finance Permitted Acquisitions of Persons that do not become Loan Parties and all Indebtedness resulting from any Permitted Refinancing thereof shall not exceed (iiI) after giving Pro Forma Effect with respect to any such Permitted Acquisition and the incurrence Acquisition, 65% of such Indebtedness, as applicable, the aggregate amount of consideration paid in respect thereof pursuant to Section 7.02(i)(B), and (II) with respect to all such Permitted Acquisitions, (a) $175,000,000 for the period from the Closing Date to the first anniversary of the Closing Date, (b) $200,000,000 for the period from the Closing Date to the second anniversary of the Closing Date and (c) $250,000,000 for the period from the Closing Date to the Maturity Date with respect to the Term Loans;
(h) (i) Indebtedness of the Company and the Restricted Subsidiaries (A) assumed in connection with any Permitted Acquisition; provided that such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00incurred in contemplation of such Permitted Acquisition, or (B) incurred to finance a Permitted Acquisition and (ii) any Permitted Refinancing of the foregoing; provided, in each case determined at the time of that such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (ii)t) is unsecured, (Au) such Indebtedness does not mature both immediately prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issuedand after giving effect thereto, (B1) no Event of Default shall exist or result therefrom and (2) the Company and the Restricted Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.10, such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such Indebtedness had been assumed or incurred as of the first day of the fiscal period covered thereby and evidenced by a certificate from the Chief Financial Officer of the Company demonstrating such compliance calculation in reasonable detail, (v) subject to clause (y) below, matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the Maturity Date of the Term Loans (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemptions provisions satisfying the requirement of clause (w) hereof), (w) subject to clause (y) below, has terms and conditions (other than interest rate and other pricing terms, redemption and prepayment premiums and subordination terms) which, when taken as a whole, are not materially less favorable to the Lenders (in connection the reasonable good faith determination of the Company) than the terms and conditions of the Senior Subordinated Note Indenture as of the Closing Date; provided that the Company shall deliver to the Administrative Agent, at least five Business Days prior to the incurrence of such Indebtedness, a certificate of a Responsible Officer, together with a Limited Condition Transaction where reasonably detailed description of the standard shall be no Default under Section 8.01(amaterial terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Company has determined in good faith that such terms and conditions satisfy the foregoing requirement; (x) subject to clause (y) below, with respect to such Indebtedness described in the immediately preceding clause (B), is incurred by the Company or 8.01(f)) and a Subsidiary that is a Loan Party; (Cy) the aggregate principal amount of such Indebtedness incurred pursuant to clause (B) and all Indebtedness resulting from any Permitted Refinancing thereof, in each case which Indebtedness or Refinancing Indebtedness would otherwise not be permitted by clauses (v), (w) or (x) above, at any time outstanding pursuant to this paragraph (h) (together with the aggregate principal amount of such Indebtedness incurred pursuant to Section 7.03(g) and all Indebtedness resulting from any Permitted Refinancing thereof) does not exceed $150,000,000, and (z) the aggregate principal amount of Indebtedness pursuant to clause (g) above and this clause (h) assumed by Restricted Subsidiaries that are non-not Loan Parties in connection with or incurred pursuant by Restricted Subsidiaries that are not Loan Parties to this Section 7.03(g) finance Permitted Acquisitions of Persons that do not become Loan Parties and all Indebtedness resulting from any Permitted Refinancing thereof shall not exceed (I) with respect to any such Permitted Acquisition, 65% of the greater aggregate amount of consideration paid in respect thereof pursuant to Section 7.02(i)(B), and (xII) with respect to all such Permitted Acquisitions, (a) $9,750,000 175,000,000 for the period from the Closing Date to the first anniversary of the Closing Date, (b) $200,000,000 for the period from the Closing Date to the second anniversary of the Closing Date and (yc) 15% of Consolidated EBITDA of $250,000,000 for the Borrower determined at period from the time of such incurrence on a Pro Forma BasisClosing Date to the Maturity Date with respect to the Term Loans;
(hi) Indebtedness representing deferred compensation to employees of Holdings or any of its the Company and the Restricted Subsidiaries incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries Loan Party to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(jk) Indebtedness incurred by Holdings the Company or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of (i) obligations of Holdings Holdings, the Company or any of its the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunderhereunder or (ii) unsecured Indebtedness at any time outstanding that is owed to the seller of a business in a Permitted Acquisition to the extent constituting consideration for such Permitted Acquisition, provided that (x) such Indebtedness shall not mature or amortize any principal prior to the date that is 91 days after the Maturity Date with respect to the Term Loans, (y) unless, as of the last day of the immediately preceding Test Period (after giving Pro Forma Effect to the incurrence of such Indebtedness) the Total Leverage Ratio is less than 4.00:1.00, the aggregate amount of such Indebtedness shall not exceed $25,000,000 outstanding at any time and (z) such Indebtedness shall not be incurred in contemplation of the transfer by such seller to one or more financial institutions;
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in each case in connection with deposit accounts incurred in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with cash management activities;
(mn) Indebtedness in an aggregate principal amount that not to exceed $200,000,000 at the any time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDAoutstanding;
(no) Indebtedness consisting of (ia) the financing of insurance premiums with the providers of such insurance or their affiliates or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Borrower Company or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower Company or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with any Existing Notes not tendered and purchased on the principal amount of all other Indebtedness incurred Closing Date pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrenceExisting Note Indenture;
(t) Credit Agreement Indebtedness in respect of the Senior Subordinated Notes and any Permitted Refinancing Indebtednessthereof;
(u) Indebtedness incurred in reliance on the Cumulative CreditForeign Jurisdiction Deposits;
(v) Indebtedness of Holdings represented by the Borrower obligations of Holdings to make payments with respect to the cancellation or any repurchase of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) common stock or stock options or warrants in respect of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred its common stock granted to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtednessmanagement investors; provided that:that any payments with respect to such obligations shall be subject to Section 7.06;
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (yw) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay constituting Indebtedness, Pro Forma Effect shall be given to such repayment judgments, decrees, attachments or awards not constituting an Event of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Default under Section 7.03(v8.01(h);
(x) to the extent constituting Indebtedness, Indebtedness in respect of the Holdings PIK Preferred;
(y) Indebtedness resulting from an Investment permitted by clauses (e)(i), (m) or (p) of Section 7.02; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(y) above.
Appears in 2 contracts
Sources: Credit Agreement (Readers Digest Association Inc), Credit Agreement (Direct Holdings Libraries Inc.)
Indebtedness. Create(a) Neither Holdings nor the Borrower will, nor will they permit any Restricted Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(ai) Indebtedness of any Loan Party created under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15);Documents,
(b) (xii) Indebtedness outstanding on in respect of the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date Existing Senior Notes and any Permitted Refinancing thereof,
(iii) Indebtedness existing on the Closing Date not to exceed $2,500,000 and other Indebtedness existing on the Closing Date set forth in Schedule 6.01 and, in each case, any Permitted Refinancing thereof,
(iv) Indebtedness of Holdings owed to any Restricted Subsidiary and of any Restricted Subsidiary owed to Holdings or any other Restricted Subsidiary; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant on terms reasonably satisfactory to the Intercompany Note;Administrative Agent; provided, further, that Indebtedness owed to any Captive Insurance Subsidiary shall only be subordinated to the extent permitted by applicable laws or regulations,
(cv) Guarantees by the Borrower and Holdings of Indebtedness of any Restricted Subsidiary in respect and by any Restricted Subsidiary of Indebtedness of the Borrower Holdings or any other Restricted Subsidiary otherwise permitted hereunderSubsidiary; provided that (A) no Guarantee the Indebtedness so Guaranteed is permitted by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth hereinthis Section 6.01, (B) if Guarantees permitted under this clause (v) shall be subordinated to the Obligations of Holdings or the applicable Restricted Subsidiary to the same extent and on the same terms as the Indebtedness being so Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party except in the case of Foreign Subsidiaries that provide Guarantees of Indebtedness of a other Foreign Subsidiaries, no Restricted Subsidiary that shall Guarantee any Indebtedness unless it is not a Subsidiary Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);Party,
(dvi) Indebtedness (including Attributable Indebtedness) of the Borrower Holdings or any Restricted Subsidiary owing incurred to finance the acquisition, construction or improvement of any Loan Party fixed or capital assets, including Capital Lease Obligations, and any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party Indebtedness assumed by Holdings or any Restricted Subsidiary in connection with the acquisition of any such assets or secured by a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, Lien on any such assets prior to the extent constituting an Investment permitted by Section 7.02(c)(iii)acquisition thereof, and Permitted Refinancings thereof; provided that (A) such Indebtedness (other than Permitted Refinancings) is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of Indebtedness permitted by this clause (vi) shall not (except as permitted by the definition of “Permitted Refinancing”) exceed at any time outstanding the greater of (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement $87,500,000 and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 202.5% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at Total Assets as of the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;incurrence,
(fvii) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(gx) Indebtedness of the Borrower Holdings or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition and not created in contemplation thereof or other Investment not prohibited hereunder(y) Permitted Debt incurred to finance a Permitted Acquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the assumption or incurrence of such Indebtedness, as applicableIndebtedness incurred or assumed pursuant to this clause (vii):
(A) if such Indebtedness ranks pari passu in right of security with the Obligations, the aggregate amount of such Indebtedness at any time outstanding First Lien Net Leverage Ratio does not exceed 3.50:1.00,
(B) if such Indebtedness ranks junior in right of security with the sum of Obligations, the Secured Net Leverage Ratio does not exceed 4.50:1.00, or
(xC) if such Indebtedness is unsecured, the greater of $16,250,000 Total Net Leverage Ratio does not exceed 5.75:1.00, and 25% of Consolidated EBITDA (determined in each case, subject to compliance with the Financial Covenant on a Pro Forma Basis and, in accordance with Section 1.09the case of clauses (x) plus and (y) additional indebtedness so long as of this clause (vii), any Permitted Refinancing of any such Indebtedness; provided that any such Indebtedness of a Non-Loan Party does not exceed in the Consolidated aggregate at any time outstanding, together with any Indebtedness incurred by a Non-Loan Party pursuant to clause (xvi) of this Section 6.01, the greater of $70,000,000 and 2.0% of Total Net Leverage Ratio is not greater than 4.25:1:00Assets, in each case determined at the such time of incurrence;
(viii) Indebtedness owed to any Person (including obligations in respect of letters of credit for the benefit of such assumption Person) providing workers’ compensation, health, disability or incurrenceother employee benefits or property, on a Pro Forma Basis casualty or liability insurance pursuant to reimbursement or indemnification obligations to such Person, in accordance each case incurred in the ordinary course of business,
(ix) Indebtedness of Holdings or any Restricted Subsidiary in respect of performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar obligations, in each case provided in the ordinary course of business,
(x) Indebtedness of any Loan Party pursuant to Swap Agreements permitted by Section 6.07,
(xi) with Section 1.09respect to Holdings, Qualified Holdings Discount Debt; provided that, in other than with respect to any additional principal amounts resulting from the case accrual of clause (ii)pay-in-kind interest, (A) such Indebtedness does not mature prior may only be issued or incurred to the date extent that is after giving effect to the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding incurrence of such additional Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;, the Total Net Leverage Ratio does not exceed (x) prior to March 31, 2019, 6.25 to 1.00 and (y) from and after March 31, 2019, 6.00 to 1.00 and (B) no Default has occurred and is continuing or would result therefrom,
(hxii) Indebtedness representing deferred compensation to employees of Holdings or any of its and the Restricted Subsidiaries incurred in the ordinary course of business;,
(ixiii) Indebtedness consisting in respect of promissory notes issued to physicians, consultants, employees or directors or former employees, consultants or directors in connection with repurchases of Equity Interests permitted by Section 6.08(a)(iii),
(xiv) Indebtedness of any Foreign Subsidiary or any Non-Loan Party, collectively, in an amount not to exceed, together with any Indebtedness incurred by a Non-Loan Party pursuant to clause (vii) of this Section 6.01, $87,500,000 at any time outstanding,
(xv) Refinancing Debt Securities, the Net Proceeds of which are applied to prepay Term Loans in connection with Section 2.11 and any Permitted Refinancing thereof,
(xvi) (a) Permitted Debt, provided that (i) (x) if such Indebtedness is secured by Liens ranking pari passu with the Liens securing the Obligations, the First Lien Net Leverage Ratio does not exceed 3.50:1.00, (y) if such Indebtedness is secured by Liens ranking junior to the Liens securing the Obligations, the Secured Net Leverage Ratio does not exceed 4.50:1.00, and (z) if such Indebtedness is unsecured, the Total Net Leverage Ratio does not exceed 5.75:1.00, in each case, determined on a Pro Forma Basis after giving effect to such assumption or incurrence and the use of proceeds thereof; and any Permitted Refinancing thereof and (ii) in each case, subject to compliance with the Financial Covenant on a Pro Forma Basis; and (b) other Permitted Debt in an aggregate principal amount pursuant to this subclause (b), when aggregated with the Free and Clear Usage Amount at such time, not to exceed the sum of (i) $100,000,000 plus (ii) the principal amount of any voluntary prepayments of Term Loans or Revolving Loans, to the extent accompanied by a permanent reduction in the Revolving Commitments, and any Permitted Refinancing thereof,
(xvii) the incurrence by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five (5) Business Days,
(xviii) the incurrence of Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or capital stock of Holdings or any Restricted Subsidiary,
(xix) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business,
(xx) Indebtedness of Holdings or a Restricted Subsidiary in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for 10 Business Days or less,
(xxi) Indebtedness in the amount of Net Proceeds actually received by Holdings from the issuance by Holdings of any Equity Interests (or capital contribution in respect thereof) after the Closing Date other than pursuant to the Cure Right or to the extent Otherwise Applied, and
(xxii) the incurrence or issuance by Holdings or any of its incurrence;
(m) Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not to exceed the greater of $22,750,000 210,000,000 and 356.0% of Consolidated EBITDA;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined Total Assets at the time of incurrence;.
(tb) Credit Agreement Refinancing Indebtedness;
For purposes of determining compliance with Section 6.01, in the event that an item of Indebtedness (u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a)portion thereof) at any time, (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment whether at the time of incurrence or upon the application of all or a portion of the proceeds thereof or subsequently, meets the criteria of more than one of the categories of permitted Indebtedness described in Section 6.01(a)(i) through (yxxi) above, the Interest Coverage Ratio Borrower, in its sole discretion, will classify and may subsequently reclassify such item of Indebtedness (determined on a Pro Forma Basisor any portion thereof) would not in any one or more of the types of Indebtedness described in 6.01(a)(i) through (xxi) above and will only be less than (1) 2.00:1.00 or (2) required to include the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation amount and type of such Permitted Acquisition or other InvestmentIndebtedness in such of the above clauses as determined by the Borrower at such time; provided that (A) Indebtedness that originally reduced the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 Free and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined Clear Usage Amount at the time of incurrence may not be reclassified. The Borrower will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in 6.01(a)(i) through (Bxxi) above.
(c) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness, the dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a term loan that is not subordinated foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in right of payment to the Loan Documents and that is secured by a Lien effect on the Collateral that ranks pari passu in right date of security with the Term Loanssuch extension, the Term Loans replacement, refunding, refinancing, renewal or defeasance, such dollar-denominated restriction shall be subject deemed not to have been exceeded so long as the “most favored nation” pricing adjustment (if applicable) set forth in principal amount of such refinancing Indebtedness does not exceed the proviso to Section 2.14(e)(iii) as if principal amount of such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of being extended, replaced, refunded, refinanced, renewed or defeased, plus the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum aggregate amount of Loans available thereunder shall be assumed fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (Bincluding OID) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to in connection with such repayment of Indebtednessrefinancing.
(wd) Any Permitted Refinancings The accrual of interest, the accretion or amortization of OID, the payment of interest in the form of additional Indebtedness with the same terms, shall not be deemed to be an incurrence of Indebtedness incurred pursuant to for purposes of this Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);6.01.
Appears in 2 contracts
Sources: Credit Agreement (Select Medical Corp), Credit Agreement (Select Medical Corp)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, exceptother than:
(a) Indebtedness of any Loan Party the Parent Borrower and the Restricted Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding existing on the Specified Date; provided that any Indebtedness (other than Indebtedness refinanced on the Closing Date in connection with the Transactions) that is in excess of (x) $5,000,000 individually or (y) $10,000,000 in the aggregate (when taken together with all other Indebtedness outstanding in reliance on this clause (b) that is not set forth on Schedule 7.03(b)) shall only be permitted under this clause (b) to the extent that such Indebtedness is and listed set forth on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness (other than the Parent Borrower Obligor Cash Management Note) of any Loan Party owed to any Restricted Subsidiary Person that is not a U.S. Loan Party shall be unsecured and subordinated to the Obligations pursuant to an intercompany note reasonably satisfactory to the Intercompany NoteAdministrative Agent;
(c) Guarantees by the Parent Borrower and or any of its Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries otherwise permitted hereunder (except that a Restricted Subsidiary that is not a U.S. Loan Party may not, by virtue of this Section 7.03(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee Guaranty of the Obligations substantially on the terms set forth herein, in the U.S. Guaranty and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee Guaranty shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness; provided that, in any event, any Guaranty of any Permitted Additional Notes shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the New Senior Notes Indentures on the Closing Date;
(Cd) any Guarantee by a Loan Party of Indebtedness of a the Parent Borrower or any of its Restricted Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a U.S. Loan Party (other than the Parent Borrower Obligor Cash Management Note) shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with an intercompany note reasonably satisfactory to the terms of the Intercompany NoteAdministrative Agent;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and construction, repair, replacement or improvement, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(mtransactions, and (iii) Indebtedness arising under Capitalized Leases other than those in effect on the Specified Date hereof or entered into pursuant to subclauses (i) and (ii) of this clause (e) and, in the case of clauses (i), (ii) and (iii), any Permitted Refinancing thereof; provided that not more than $150,000,000 in aggregate principal amount of such Attributable IndebtednessIndebtedness incurred pursuant to this paragraph (e) shall be outstanding at any time;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) [Reserved]
(h) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; Acquisition: provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such acquisition, and any Permitted Acquisition or other Investment or Refinancing of any of the foregoing and so long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding pursuant to this paragraph (h) does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00250,000,000, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(hi) [Reserved];
(j) Indebtedness representing deferred compensation to employees of Holdings the Parent Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(ik) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses Controlled Investment Affiliates or former spouses Immediate Family Members to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.06;
(jl) Indebtedness incurred by Holdings arising from agreements of the Parent Borrower or any a Restricted Subsidiary providing for indemnification, adjustment of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger purchase price or any Disposition permitted hereundersimilar obligations, in each case, constituting indemnification 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; provided, however, that such Indebtedness is not reflected on the balance sheet (other than by application of FASB Interpretation No. 45 as a result of an amendment to an obligation in existence on the Closing Date) of the Parent Borrower or any Restricted Subsidiary (contingent obligations or obligations referred to in respect a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of purchase price this clause (including earn-outs) or other similar adjustmentsl));
(km) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder[Reserved];
(ln) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(mo) Indebtedness in an aggregate principal amount that at the any time of, and after giving effect to, the incurrence thereof, would outstanding not to exceed the greater of $22,750,000 and 35% of Consolidated EBITDA1,000,000,000;
(np) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(oq) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of businessbusiness or consistent with past practice, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pr) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qs) letters Indebtedness of credit issued CCOH and its Restricted Subsidiaries, the proceeds of which are solely used to refinance the CCU Term Note; provided that the Parent Borrower subsequently applies all of the Net Cash Proceeds from such repayment of the CCU Term Note to prepayment of Loans in currencies not available hereunder the order specified in Section 2.05(b)(v) with respect to mandatory prepayments under Section 2.05(b)(iii).
(t) Indebtedness under the ABL Facilities and any Permitted Refinancing thereof in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed at any time outstanding the face amount sum of (x) $1,000,000,000 minus the Tranche A Term Loan Backstop Amount, plus (y) on and after such Letter of Credit;
(s) time as CCOH and its wholly-owned Restricted Subsidiaries which are Material Domestic Subsidiaries but not Excluded Subsidiaries shall become U.S. Subsidiary Guarantors hereunder and otherwise comply with Section 6.11 and additional Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the thereunder not to exceed an aggregate principal amount of $500,000,000, plus (z) the aggregate amount of all other Indebtedness incurred principal payments of Tranche A Term Loans (except any mandatory prepayment of Tranche A Term Loans pursuant to Section 2.05(b)(ii)); provided that the aggregate amount of additional Indebtedness under this Section 7.03(sclause (y) and then outstanding for all such Persons taken together, does shall not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing IndebtednessTranche A Term Loan Backstop Amount;
(u) (i) Indebtedness incurred and Guarantees by U.S. Guarantors in reliance on respect of the Cumulative CreditNew Senior Notes in an aggregate principal amount not to exceed $2,310,000,000 plus the PIK Interest Amount and (ii) any Permitted Refinancing thereof;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence[Reserved];
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w(u) above and (x) through (dd) below;
(x) Guarantees incurred in the ordinary course of business in respect of obligations not constituting Indebtedness to suppliers, customers, franchisees, lessors and licensees;
(y) Indebtedness incurred in the ordinary course of business in respect of obligations of the Parent Borrower or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services;
(z) Indebtedness in respect of (i) Permitted Additional Notes to the extent the Net Cash Proceeds therefrom are immediately after the receipt thereof, used to prepay the Term Loans in accordance with Section 2.05(b) and (ii) any Permitted Refinancing of the foregoing;
(aa) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(bb) Indebtedness consisting of obligations of the Parent Borrower and its Restricted Subsidiaries under deferred compensation to employees or other similar arrangements incurred by such Person in connection with the Transactions, any Permitted Acquisition or any other Investment expressly permitted hereunder;
(cc) Indebtedness incurred by a Securitization Entity in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to Holdings or any of its Subsidiaries or the Parent Borrower or any of its Subsidiaries (other than another Securitization Entity);; and
(dd) Indebtedness of any Non-Loan Party that is Restricted Subsidiary in an amount not to exceed $400,000,000 at any one time outstanding. Notwithstanding the foregoing, no Restricted Subsidiary that is not a U.S. Loan Party will guarantee any Indebtedness for borrowed money of a U.S. Loan Party unless such Restricted Subsidiary becomes a U.S. Subsidiary Guarantor. In addition, notwithstanding the foregoing, (i) Restricted Subsidiaries that are not U.S. Loan Parties may not incur Indebtedness pursuant to, without duplication, the first paragraph of this Section and clauses (g), (h) and (o) of this Section in an aggregate combined principal amount at any time outstanding in excess of $500,000,000 in each case determined at the time of incurrence and (ii) until the Existing Notes Condition shall have been satisfied, (A) the Parent Borrower shall not, and shall not permit any Restricted Subsidiary to, create, incur, assume or suffer to exist any Guarantee of the Existing Notes and (B) all Indebtedness (other than the Parent Borrower Obligor Cash Management Note) owed to the Parent Borrower by any Subsidiary Guarantor shall be unsecured and subordinated to the Obligations pursuant to an intercompany note reasonably satisfactory to the Administrative Agent. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased plus the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Parent Borrower dated such date prepared in accordance with GAAP.
Appears in 2 contracts
Sources: Credit Agreement (Clear Channel Communications Inc), Credit Agreement (C C Media Holdings Inc)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under (i) the Loan Documents, (ii) the Senior Notes Documents in an aggregate principal amount not to exceed $1,500,000,000 and, in the case of this clause (including ii), any Indebtedness incurred pursuant Permitted Refinancing thereof and (iii) the Opco Senior Notes Documents in an aggregate principal amount not to Section 2.14 or 2.15exceed $1,000,000,000 and, in the case of this clause (iii), any Permitted Refinancing thereof;
(b) (xi) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any Permitted Refinancing thereofrefinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note and (y) all such intercompany Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder; provided that (A) no Guarantee by of any Restricted Subsidiary of 5 5/8% Senior Notes, Opco Senior Notes or any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, herein and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured evidenced by an Intercompany Note and any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party is subordinated in right of payment to the Obligations pursuant Loans (for the avoidance of doubt, any such Indebtedness owing to subordination terms substantially consistent with a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms of the Intercompany Notesuch Indebtedness expressly provide otherwise);
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 365 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 205.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Total Assets, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and outstanding, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and (iii) any Permitted Refinancing of such Attributable Indebtednessany of the foregoing;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, so long as such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or Acquisition, and any Permitted Refinancing thereof or (ii) thereof; provided that after giving Pro Forma Effect pro forma effect to such Permitted Acquisition and the incurrence assumption of such Indebtedness, as applicable, the aggregate amount of such Indebtedness does not exceed (x) $100,000,000 at any time outstanding does not exceed plus (y) any additional amount of such Indebtedness so long (i) if such Indebtedness is secured on a junior basis to the sum of (x) Facilities, the greater of $16,250,000 and 25% of Consolidated EBITDA (Total Net Leverage Ratio determined on a Pro Forma Basis in accordance is no greater than 6.15 to 1.00, (ii) if such Indebtedness is secured on a pari passu basis with Section 1.09) plus (y) additional indebtedness so long as the Facilities, the Consolidated Total First Lien Net Leverage Ratio determined on a Pro Forma Basis is no greater than 3.75 to 1.00 or (iii) if such Indebtedness is unsecured, the Fixed Charge Coverage Ratio on a consolidated basis for the Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom); provided that any such Indebtedness incurred by a Restricted Subsidiary that is not greater than 4.25:1:00a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding 4.25% of Total Assets, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower (or any direct or indirect parent thereof) or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment expressly permitted hereunder;
(l) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(m) Indebtedness of the Borrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of $22,750,000 800,000,000 and 354.0% of Consolidated EBITDATotal Assets at any time outstanding plus (y) 200% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests, Designated Equity Contributions or sales of Equity Interests to the Borrower or any of its Subsidiaries) of the Borrower or any direct or indirect parent of the Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Borrower that has not been applied to incur debt pursuant to this clause (m)(y), to make Restricted Payments pursuant to Section 7.06 (other than pursuant to Section 7.06(h)(y)), to make Investments pursuant to clause 7.02(n), (v), (w), (y) or (z) or to make prepayments of subordinated indebtedness pursuant to Section 7.13 (other than 7.13(a)(iv)(y));
(n) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder Indebtedness incurred on (x) a pari passu basis with the Facilities or (y) junior to the Facilities in an aggregate principal amount, when aggregated with the amount of Incremental Term Loans and Incremental Revolving Credit Commitments pursuant to Section 2.14(d)(v)(A) and Section 2.14(d)(v)(B), not to exceed $1,500,000,000; provided that such Indebtedness shall (A) subject to the Permitted Earlier Maturity Indebtedness Exception, in the case of clause (x) above, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of clause (y) above, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred, (B) subject to the Permitted Earlier Maturity Indebtedness Exception, in the case of clause (x) above, have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities and, in the case of clause (y) above, shall not be subject to scheduled amortization prior to maturity, (C) if such Indebtedness is incurred or guaranteed on a secured basis by a Loan Party, be subject to the Junior Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be (x) in the form of debt securities and (y) subject to the First Lien Intercreditor Agreement and (D) have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) (provided that a certificate of the Borrower as to the satisfaction of the conditions described in this clause (D) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (D), shall be conclusive unless the Administrative Agent notifies the Borrower within such five (5) Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)); provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding not to exceed $5,000,0004.25% of Total Assets, in each case determined at the time of incurrence;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) [Reserved];
(v) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (v) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 and 1510% of Consolidated EBITDA Foreign Subsidiary Total Assets;
(w) unsecured Indebtedness of the Borrower or any Restricted Subsidiary, so long as the Fixed Charge Coverage Ratio on a consolidated basis for the Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, determined on a Pro Forma Basis pro forma basis (including a pro forma application of the net proceeds therefrom), as if such Indebtedness had been incurred and the application of proceeds therefrom had occurred at the beginning of such four-quarter period and without duplication, Permitted Refinancings of such Indebtedness; provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), 7.03(q) or 7.03(s), does not exceed in accordance with Section 1.09)the aggregate at any time outstanding, 4.25% of Total Assets, in each case determined at the time of incurrence;
(tx) Credit Agreement Refinancing Indebtedness;Indebtedness arising from Permitted Intercompany Activities; and
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w(x) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (x) above, the Borrower shall, in its sole discretion, classify or later divide or classify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents, any Senior Notes Documents and any Opco Senior Notes Documents and, in each case, any Permitted Refinancing thereof, will at all times be deemed to be outstanding in reliance only on the exception in Section 7.03(a);.
Appears in 2 contracts
Sources: Credit Agreement (Hilton Worldwide Holdings Inc.), Credit Agreement (Hilton Worldwide Holdings Inc.)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under (i) the Loan Documents, (ii) the Senior Notes Documents in an aggregate principal amount not to exceed $1,500,000,000 and, in the case of this clause (including ii), any Indebtedness incurred pursuant Permitted Refinancing thereof and (iii) the Opco Senior Notes Documents in an aggregate principal amount not to Section 2.14 or 2.15exceed $1,000,000,000 and, in the case of this clause (iii), any Permitted Refinancing thereof;
(b) (xi) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any Permitted Refinancing thereofrefinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note and (y) all such intercompany Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder; provided that (A) no Guarantee by of any Restricted Subsidiary of 5 5/8% Senior Notes, Opco Senior Notes or any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, herein and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured evidenced by an Intercompany Note and any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party is subordinated in right of payment to the Obligations pursuant Loans (for the avoidance of doubt, any such Indebtedness owing to subordination terms substantially consistent with a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms of the Intercompany Notesuch Indebtedness expressly provide otherwise);
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 365 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 205.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Total Assets, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and outstanding, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and (iii) any Permitted Refinancing of such Attributable Indebtednessany of the foregoing;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, so long as such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or Acquisition, and any Permitted Refinancing thereof or (ii) thereof; provided that after giving Pro Forma Effect pro forma effect to such Permitted Acquisition and the incurrence assumption of such Indebtedness, as applicable, the aggregate amount of such Indebtedness does not exceed (x) $100,000,000 at any time outstanding does not exceed plus (y) any additional amount of such Indebtedness so long (i) if such Indebtedness is secured on a junior basis to the sum of (x) Facilities, the greater of $16,250,000 and 25% of Consolidated EBITDA (Total Net Leverage Ratio determined on a Pro Forma Basis in accordance is no greater than 6.15 to 1.00, (ii) if such Indebtedness is secured on a pari passu basis with Section 1.09) plus (y) additional indebtedness so long as the Facilities, the Consolidated Total First Lien Net Leverage Ratio determined on a Pro Forma Basis is no greater than 3.75 to 1.00 or (iii) if such Indebtedness is unsecured, the Fixed Charge Coverage Ratio on a consolidated basis for the Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom); provided that any such Indebtedness incurred by a Restricted Subsidiary that is not greater than 4.25:1:00a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding 4.25% of Total Assets, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower (or any direct or indirect parent thereof) or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment expressly permitted hereunder;
(l) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(m) Indebtedness of the Borrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of $22,750,000 800,000,000 and 354.0% of Consolidated EBITDATotal Assets at any time outstanding plus (y) 200% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests, Designated Equity Contributions or sales of Equity Interests to the Borrower or any of its Subsidiaries) of the Borrower or any direct or indirect parent of the Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Borrower that has not been applied to incur debt pursuant to this clause (m)(y), to make Restricted Payments pursuant to Section 7.06 (other than pursuant to Section 7.06(h)(y)), to make Investments pursuant to clause 7.02(n), (v), (w), (y) or (z) or to make prepayments of subordinated indebtedness pursuant to Section 7.13 (other than 7.13(a)(iv)(y));
(n) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder Indebtedness incurred on (x) a pari passu basis with the Facilities or (y) junior to the Facilities in an aggregate principal amount, when aggregated with the amount of Incremental Term Loans and Incremental Revolving Credit Commitments pursuant to Section 2.14(d)(v)(A) and Section 2.14(d)(v)(B), not to exceed $1,500,000,000; provided that such Indebtedness shall (A) subject to the Permitted Earlier Maturity Indebtedness Exception, in the case of clause (x) above, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of clause (y) above, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred, (B) subject to the Permitted Earlier Maturity Indebtedness Exception, in the case of clause (x) above, have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities and, in the case of clause (y) above, shall not be subject to scheduled amortization prior to maturity, (C) if such Indebtedness is incurred or guaranteed on a secured basis by a Loan Party, be subject to the Junior Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be (x) in the form of debt securities and (y) subject to the First Lien Intercreditor Agreement and (D) have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) (provided that a certificate of the Borrower as to the satisfaction of the conditions described in this clause (D) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (D), shall be conclusive unless the Administrative Agent notifies the Borrower within such five (5) Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)); provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding not to exceed $5,000,0004.25% of Total Assets, in each case determined at the time of incurrence;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) [Reserved];
(v) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (v) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 and 1510% of Consolidated EBITDA Foreign Subsidiary Total Assets;
(w) unsecured Indebtedness of the Borrower or any Restricted Subsidiary, so long as the Fixed Charge Coverage Ratio on a consolidated basis for the Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, determined on a Pro Forma Basis pro forma basis (including a pro forma application of the net proceeds therefrom), as if such Indebtedness had been incurred and the application of proceeds therefrom had occurred at the beginning of such four-quarter period and without duplication, Permitted Refinancings of such Indebtedness; provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), 7.03(q) or 7.03(s), does not exceed in accordance with Section 1.09)the aggregate at any time outstanding, 4.25% of Total Assets, in each case determined at the time of incurrence;
(tx) Credit Agreement Refinancing Indebtedness;Indebtedness arising from Permitted Intercompany Activities; and
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w(x) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (x) above, the Borrower shall, in its sole discretion, classify or later divide or classify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents, any Senior Notes Documents and any Opco Senior Notes Documents and, in each case, any Permitted Refinancing thereof, will at all times be deemed to be outstanding in reliance only on the exception in Section 7.03(a);.
Appears in 2 contracts
Sources: Credit Agreement (Hilton Worldwide Holdings Inc.), Credit Agreement (Hilton Worldwide Holdings Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, exceptother than:
(a) Indebtedness of any Loan Party the Parent Borrower and the Restricted Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding existing on the Specified Date; provided that any Indebtedness (other than Indebtedness refinanced on the Closing Date and listed in connection with the Transactions) that is in excess of (x) $5,000,000 individually or (y) $10,000,000 in the aggregate (when taken together with all other Indebtedness outstanding in reliance on this clause (b) that is not set forth on Schedule 7.03(b)) shall only be permitted under this clause (b) to the extent that such Indebtedness is set forth on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness (other than the Parent Borrower Obligor Cash Management Note) of any Loan Party owed to any Restricted Subsidiary Person that is not a U.S. Loan Party shall be unsecured and subordinated to the Obligations pursuant to an intercompany note reasonably satisfactory to the Intercompany NoteAdministrative Agent;
(c) Guarantees by the Parent Borrower and or any of its Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries otherwise permitted hereunder (except that a Restricted Subsidiary that is not a U.S. Loan Party may not, by virtue of this Section 7.03(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Junior Financing, any Permitted Credit Facilities Refinancing Indebtedness, any Permitted Alternative Incremental Facilities Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation any Permitted Debt Exchange Notes shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee Guaranty of the Obligations substantially on the terms set forth herein, in the U.S. Guaranty and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee Guaranty shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness; provided that, in any event, any Guaranty of any Permitted Additional Notes shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the New Senior Notes Indenture on the Closing Date;
(Cd) any Guarantee by a Loan Party of Indebtedness of a the Parent Borrower or any of its Restricted Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a U.S. Loan Party (other than the Parent Borrower Obligor Cash Management Note) shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with an intercompany note reasonably satisfactory to the terms of the Intercompany NoteAdministrative Agent;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and construction, repair, replacement or improvement, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(mtransactions, and (iii) Indebtedness arising under Capitalized Leases other than those in effect on the Specified Date or entered into pursuant to subclauses (i) and (ii) of this clause (e) and, in the case of clauses (i), (ii) and (iii), any Permitted Refinancing thereof; provided that not more than $150,000,000 in aggregate principal amount of such Attributable IndebtednessIndebtedness incurred pursuant to this paragraph (e) shall be outstanding at any time;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) (i) Indebtedness of the Parent Borrower in the form of one or more series of senior unsecured notes or senior subordinated notes (collectively, “Permitted Unsecured Notes”) and/or one or more series of senior secured notes that are secured by all or a portion of the Collateral provided by the U.S. Loan Parties on a pari passu or junior basis with the Loans and other Obligations (such senior secured notes, the “Permitted Senior Secured Notes”), so long as, within five Business Days after the receipt of such Net Cash Proceeds, the Parent Borrower makes a prepayment of Term Loans and/or Revolving Credit Loans (with, in the case of Revolving Credit Loans, a concomitant permanent reduction in the Revolving Credit Commitments) pursuant to Section 2.05(b)(vii), in an aggregate amount equal to 100% of the Net Cash Proceeds of such Indebtedness; provided that (a) immediately prior and after giving effect thereto, no Default or Event of Default shall have occurred and is continuing, (b) the stated final maturity of such Indebtedness is not earlier than 91 days after the Latest Maturity Date for the Class or Classes of Loans being repaid or Commitments being reduced with the proceeds thereof, and such stated final maturity is not subject to any conditions that could result in such stated final maturity occurring on a date that precedes such 91st day (it being understood that acceleration or mandatory repayment, prepayment, redemption or repurchase of such Indebtedness upon the occurrence of an event of default, a change in control, an event of loss or an asset disposition shall not be deemed to constitute a change in the stated final maturity thereof), (c) such Indebtedness is not required to be repaid, prepaid, redeemed, repurchased or defeased, whether on one or more fixed dates, upon the occurrence of one or more events or at the option of any holder thereof (except, in each case, upon the occurrence of an event of default, a change in control, an event of loss or an asset disposition) prior to the date that is 91 days after such Latest Maturity Date for the Class of Loans being repaid or Commitments being reduced with the proceeds thereof, provided that, notwithstanding the foregoing, in the case of Term Loans scheduled amortization payments (however denominated, including scheduled offers to repurchase) of such Indebtedness shall be permitted so long as the Weighted Average Life to Maturity of such Indebtedness shall be longer than the remaining Weighted Average Life to Maturity of the Class or Classes of Loans being repaid or Commitments being reduced with the proceeds thereof, (d) such Indebtedness shall not be an obligation (including pursuant to a Guarantee) of any Person other than the Parent Borrower and the U.S. Subsidiary Guarantors (or any Restricted other Subsidiary that becomes a guarantor of the Obligations on terms substantially similar to the Guarantee); provided that any Person who subsequently becomes a guarantor of such Indebtedness shall also become a guarantor of the Obligations on terms substantially similar to the Guarantee, (e) if such Indebtedness is secured, (i) such Indebtedness shall not be secured by any assets or property other than all or a portion of the Collateral of the U.S. Loan Parties (or any other Subsidiary that becomes a guarantor of the Obligations), (ii) so long as the Administrative Agent is a party to the Intercreditor Agreement (or any other intercreditor agreement referred to in Section 7.01(z) or otherwise), the secured parties under such Indebtedness, or a trustee, collateral agent, security agent or similar agent on their behalf, shall have become a party to the Intercreditor Agreement (or such other intercreditor agreement) and (iii) all security therefor shall be granted pursuant to agreements substantially similar to the Collateral Documents or as customary under applicable Law (provided that such agreements may exclude from the grant of Liens thereunder assets that are not excluded from the grant of Liens under the Collateral Documents), and the secured parties thereunder, or a trustee, collateral agent, security agent or similar agent on their behalf, shall have become a party to the First Lien Intercreditor Agreement, to the extent such Liens rank pari passu to the Liens securing the Obligations, or the Second Lien Intercreditor Agreement, to the extent such Liens are junior in priority to the Liens securing the Obligations (and such intercreditor agreement shall have been executed and delivered by each other Person contemplated by the terms thereof to be a party thereto) and (f) such Indebtedness shall not contain a maintenance financial covenant that is at any time during the term of this Agreement materially more restrictive to the Parent Borrower than the covenant set forth in Section 7.14 except to the extent the Parent Borrower shall also be required to comply during such time with such maintenance financial covenant hereunder (which requirement to so comply shall not require the consent of any Lender or Agent hereunder) (such permitted Indebtedness incurred pursuant to this Section 7.03(g) being referred to as “Permitted Credit Facilities Refinancing Indebtedness”) and (ii) any Permitted Refinancing thereof so long as the conditions set forth in clauses (a) through (f) above shall also have been satisfied;
(h) Indebtedness assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; Acquisition: provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such acquisition, and any Permitted Acquisition or other Investment or Refinancing of any of the foregoing and so long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding pursuant to this paragraph (h) does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00250,000,000, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(ti) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(vi) Indebtedness of the Parent Borrower or any in the form of its Restricted Subsidiaries Permitted Unsecured Notes and/or Permitted Senior Secured Notes; provided that (A) at the time such Indebtedness is a Loan Party that complies with clauses incurred (aand after giving effect thereto), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default shall exist, (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(aB) and (f) and at the time any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured incurred (after giving effect thereto), the Parent Borrower shall be in pro forma compliance with the covenant set forth in Section 7.14 for the Test Period then last ended calculated on a pari passu pro forma basis for such Permitted Alternative Incremental Facilities Indebtedness in right accordance with Section 1.10 (and a certificate from the Chief Financial Officer of security the Parent Borrower demonstrating compliance with such Section calculated in reasonable detail shall be provided to the ObligationsAdministrative Agent), (C) the aggregate amount of Indebtedness incurred under this Section 7.03(i) shall not exceed (I) the sum of (x) the Initial Incremental Amount plus (y) the excess, if any, of (a) 0.65 times Consolidated EBITDA of the Parent Borrower for the Test Period then last ended prior to the date of determination and calculated on a pro forma basis in accordance with Section 1.10 over (b) the Initial Incremental Amount plus (z) the aggregate amount of principal of Term Loans prepaid pursuant to Sections 2.05(b)(i) and 2.05(b)(iii) since the Closing Date that have not been refinanced with Indebtedness under this Agreement minus (II) the aggregate amount of Incremental Term Loans and the Revolving Commitment Increases, in each case incurred under Section 2.14, (D) the stated final maturity of such Indebtedness shall not exceed be earlier than 91 days after the Maturity Date with respect to the Tranche B Term Loans (without giving effect to any prior Extensions thereof), and such stated final maturity shall not be subject to any conditions that could result in such stated final maturity occurring on a date that precedes such 91st day after the Maturity Date with respect to the Tranche B Term Loans (without giving effect to any prior Extensions thereof) (it being understood that acceleration or mandatory repayment, prepayment, redemption or repurchase of such Indebtedness upon the occurrence of an amount event of default, a change in control, an event of loss or an asset disposition shall not be deemed to constitute a change in the stated final maturity thereof), (E) such Indebtedness shall not be required to be repaid, prepaid, redeemed, repurchased or defeased, whether on one or more fixed dates, upon the occurrence of one or more events or at the option of any holder thereof (except, in each case, upon the occurrence of an event of default, a change in control, an event of loss or an asset disposition) prior to the 91st day after the Maturity Date with respect to the Tranche B Term Loans (without giving effect to any prior Extensions thereof), provided that, notwithstanding the foregoing, scheduled amortization payments (however denominated, including scheduled offers to repurchase) of such Indebtedness shall be permitted so long as on and as the Weighted Average Life to Maturity of such Indebtedness shall be longer than the remaining Weighted Average Life to Maturity of the Tranche B Term Loans (without giving effect to any prior Extensions thereof), (F) such Indebtedness shall not be an obligation (including pursuant to a Guarantee) of any Person other than the Parent Borrower and the U.S. Subsidiary Guarantors (or any other Subsidiary that becomes a guarantor of the Obligations on terms substantially similar to the Guarantee); provided that any Person who subsequently becomes a guarantor of such Indebtedness shall also become a guarantor of the Obligations on terms substantially similar to the Guarantee, (G) the proceeds of such Indebtedness shall be used for any purpose not prohibited by this Agreement; provided that (i) to the extent such proceeds are being used to refinance Retained Existing Notes, such refinancing occurs no earlier than the final maturity date of such incurrence Retained Existing Notes, and (ii) any amount of such Indebtedness in excess of the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to Initial Incremental Amount may be used (x) 3.75:1.00 only to refinance Retained Existing Notes on their final maturity date or (y) to if, after the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately Restatement Date but no more than nine months prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of incurrence of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunderIndebtedness, the greater Parent Borrower shall have repaid any Retained Existing Notes on their final maturity date (other than with proceeds of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Incremental Term Loans, Revolving Commitment Increases or Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09)Alternative Incremental Facilities Indebtedness, in each case determined at incurred other than under the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Initial Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(vAmount), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent of the amount so repaid, for working capital and other general corporate purposes (except where such Retained Existing Notes were refinanced with the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v7.03(b);
, in which case the proceeds of such Indebtedness shall be used to permanently repay or prepay such Indebtedness), (H) if such Indebtedness is secured, (x) such Indebtedness shall not be secured by any assets or property other than all premiums or a portion of the Collateral of the U.S. Loan Parties (if anyor any other Subsidiary that becomes a guarantor of the Obligations), interest (including post-petition interesty) so long as the Administrative Agent is a party to the Intercreditor Agreement (or any other intercreditor agreement referred to in Section 7.01(z) or otherwise), feesthe secured parties under such Indebtedness, expensesor a trustee, charges collateral agent, security agent or similar agent on their behalf, shall have become a party to the Intercreditor Agreement (or such other intercreditor agreement) and additional (z) all security therefor shall be granted pursuant to agreements substantially similar to the Collateral Documents or contingent interest as customary under applicable Law (provided that such agreements may exclude from the grant of Liens thereunder assets that are not excluded from the grant of Liens under the Collateral Documents), and the secured parties thereunder, or a trustee, collateral agent, security agent or similar agent on obligations described their behalf, shall have become a party to the First Lien Intercreditor Agreement, to the extent such Liens rank pari passu to the Liens securing the Obligations, or the Second Lien Intercreditor Agreement, to the extent such Liens are junior in Sections 7.03(apriority to the Liens securing the Obligations (and such intercreditor agreement shall have been executed and delivered by each other Person contemplated by the terms thereof to be a party thereto) through 7.03(w);and (I) such Indebtedness sh
Appears in 2 contracts
Sources: Credit Agreement (Clear Channel Communications Inc), Credit Agreement (Clear Channel Communications Inc)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Obligations;
(b) Indebtedness (xincluding any unused commitment in respect thereof) Indebtedness outstanding on the Closing Date and listed on in Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Secured Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation of any Loan Party shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Secured Obligations on the terms set forth herein, herein and (B) if the Indebtedness being Guaranteed is subordinated to the Secured Obligations, such Guarantee shall be subordinated to the Guarantee of the Secured Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only), provided that, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting such Indebtedness is an Investment permitted by Section 7.02(c)(iii)7.02 or consists of any part of a Permitted Reorganization or IPO Reorganization Transaction; provided further that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Collateral Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Secured Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset thereof in an aggregate amount not to exceed the greater of $13,000,000 3,750,000 and 2012.5% of Trailing Four-Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)EBITDA, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Secured Hedge Obligations and other Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary (i) assumed or incurred in connection with any Permitted Acquisition or other similar Investment not prohibited hereunderpermitted hereunder and any Permitted Refinancing thereof; provided that (ix) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other similar Investment permitted hereunder or any Permitted Refinancing thereof and (y) the obligors with respect to such Indebtedness are limited to the Persons acquired in such Permitted Acquisition or Investment or (ii) incurred to finance any Permitted Acquisition or Investment permitted hereunder (including earn-out obligations, Indebtedness incurred to finance the payment thereof and seller notes); provided, that after giving Pro Forma Effect pro forma effect to such Permitted Acquisition or Investment permitted hereunder and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness incurred pursuant to this clause (ii) does not exceed at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 4,500,000 and 2515.0% of Trailing Four Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00EBITDA, in each case case, determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA as of the Borrower determined at the time applicable date of such incurrence on a Pro Forma Basisincurrence;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former managers, officers, managersdirectors, consultantsadvisors, directors and service providers, consultants or employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in connection with the Transactions, a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price adjustments or other similar adjustments (including earn-outs) or other similar adjustmentsouts and obligations in respect of transaction tax benefits);
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries 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;
(l) (i) Secured Cash Management Obligations and Obligations, (ii) other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management Cash Management Services and similar arrangements in the ordinary course of business and any Guarantees thereof or thereof, (iii) Indebtedness resulting from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of businessbusiness and solely with respect to each incurrence pursuant to this clause (iii), so long as such Indebtedness is extinguished within 10 Business Days of its incurrence, and (iv) endorsement of instruments or other payment items for deposit in the ordinary course of business;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 10,000,000 and 3533.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of incurrence;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) to extent constituting Indebtedness, obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case case, in the ordinary course of business or consistent with past practicepractice or to the extent required by Laws or pursuant to any statutory filing;
(q) letters of credit in an aggregate face amount at any time outstanding not to exceed the greater of $3,000,000 and 10.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of incurrence consisting of (i) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding or (ii) documentary or commercial letters of credit not to exceed $5,000,000issued hereunder;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Restricted Subsidiary that is not a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s7.03(u) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 5,250,000 and 1517.5% of Trailing Four Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)EBITDA, in each case determined at as of the time date of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings and Limited Originator Recourse) to the Borrower or any of its the Restricted Subsidiaries Subsidiaries; provided, that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness at any time outstanding in connection therewith shall not exceed $15,000,000;
(w) [reserved];
(x) [reserved];
(y) unsecured Indebtedness in an amount so equal to the lesser of 100% of the net cash proceeds received by Holdings (or any direct or indirect parent thereof) since immediately after the Closing Date from the issuance or sale of Equity Interests of Holdings (or any direct or indirect parent thereof) or cash contributed to the capital of Holdings (or any direct or indirect parent thereof) (in each case, other than proceeds of Disqualified Equity Interests or sales of Equity Interests to Holdings (or any direct or indirect parent thereof) or any of its Subsidiaries) to the extent such net cash proceeds or cash have been contributed to the Borrower and have not been applied pursuant to Section 7.02, 7.06 or 7.13 and do not constitute Cure Amounts;
(z) (i) Indebtedness in respect of Other Term Loans and Other Notes incurred or issued in accordance with Section 2.14 and (ii) Permitted Refinancings thereof;
(aa) Indebtedness incurred by the Borrower as a result of the exchange of Term Loans assigned to the Borrower pursuant to Section 10.07(k), as long as on such Indebtedness would be a Permitted Refinancing of such Term Loans;
(bb) obligations in respect of Disqualified Equity Interests (x) issued to and held by the Borrower, Holdings or any Restricted Subsidiary (to the extent permitted by Section 7.02) or (y) in an amount not to exceed the greater of $1,200,000 and 4.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio incurrence;
(determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(icc) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent intercompany Indebtedness incurred in connection with a Permitted Acquisition Reorganization or other IPO Reorganization Transaction, so long as such intercompany Indebtedness constitutes an Investment permitted hereunderpursuant to Section 7.02(j); and
(dd) Indebtedness in respect of aircraft or related equipment financing in an amount not to exceed $20,000,000 at any time outstanding (together with any amounts incurred under any Aircraft Trust Arrangement); provided, the greater of that, (I) 3.75:1.00 and any such Indebtedness that constitutes Pari Passu Secured Obligations shall be subject to the separate agreement among the Lenders entered into on the Closing Date or a Parity Intercreditor Agreement, as applicable, (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if any such Indebtedness that is incurred pursuant to Section 7.03(a), Section 7.03(s), Section 7.03(t), Section 7.03(u), Section 7.03(z) or Section 7.03(aa) and is secured by the Collateral on a junior basis shall be subject to a Junior Intercreditor Agreement, and (III) any such Indebtedness that constitutes Pari Passu Secured Obligations or which is secured by the Collateral on a junior basis shall be junior in right of security payment to the Revolving Credit Facility to the extent set forth in such agreement among Lenders or such Intercreditor Agreement. For purposes of determining compliance with any Dollar-denominated restriction on the Obligationsincurrence of Indebtedness, the aggregate Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09)was incurred, in each the case determined at of term debt, or first committed, in the time case of incurrence and (B) revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, Refinance, renew or defease other Indebtedness denominated in a term loan that is not subordinated foreign currency, and such extension, replacement, refunding, Refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in right of payment to the Loan Documents and that is secured by a Lien effect on the Collateral that ranks pari passu in right date of security with the Term Loanssuch extension, the Term Loans replacement, refunding, Refinancing, renewal or defeasance, such Dollar-denominated restriction shall be subject deemed not to have been exceeded so long as the “most favored nation” pricing adjustment (if applicable) set forth in principal amount of such Refinancing Indebtedness does not exceed the proviso to Section 2.14(e)(iii) as if principal amount of such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of being extended, replaced, refunded, Refinanced, renewed or defeased, plus the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum aggregate amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtednessfees, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all underwriting discounts, premiums (if any), interest including tender premiums) and other costs and expenses (including OID) incurred in connection with such Refinancing. Interest (including post-petition interest), the accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and premiums (if any), fees, expenses, charges and additional or contingent interest on obligations shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in Sections 7.03(a) through 7.03(w7.03(dd);, the Borrower shall, in its sole discretion, divide or classify or later divide or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents on the Closing Date will be deemed to be incurred in reliance on the exception in Section 7.03(a).
Appears in 2 contracts
Sources: Credit Agreement (AEVEX Corp.), Credit Agreement (AEVEX Corp.)
Indebtedness. Create(a) The Company will not permit any Subsidiary to be liable for the New Bonds or any other Material Indebtedness (other than (x) Indebtedness referred to in clauses (i), (ii) and (iii) of paragraph (b) below, (y) Guarantees by Foreign Subsidiaries of Material Indebtedness of other Foreign Subsidiaries and (z) Material Indebtedness of Foreign Subsidiaries and which Indebtedness is not Guaranteed by any Domestic Subsidiary), whether as a primary obligor or under any Guarantee, unless such Subsidiary (i) shall be a party to and a Guarantor under the Guarantee Agreement or (ii) if the Guarantee Agreement shall have been terminated as provided in Section 11.16, shall have executed and delivered a Guarantee of the Obligations satisfactory in form and substance to the Administrative Agent. The Company will not permit any such Material Indebtedness to contain any provision requiring, contingently or otherwise, that any Subsidiary guarantee any obligations thereunder (other than any provision requiring Guarantees by Foreign Subsidiaries of Material Indebtedness of other Foreign Subsidiaries) unless this Agreement shall have been amended to incorporate such provision, mutatis mutandis, into the appropriate Article herein.
(b) The Company will not, and will not permit any Subsidiary to, create, incur, assume or suffer permit to exist any IndebtednessIndebtedness under any Securitization, except:
(a) or any Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15);
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth hereinan Excluded Subsidiary, (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;than:
(i) Indebtedness consisting of promissory notes issued by Holdings under the 2003 Securitization or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06other receivables Securitization;
(jii) Indebtedness incurred by Holdings or of Excluded Subsidiaries (other than any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsSecuritization Entity) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of exceeding $22,750,000 and 35% of Consolidated EBITDA;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount 400,000,000 at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrenceoutstanding;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on incurred by Pharmerica and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred its subsidiaries in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are nonPharmerica Spin-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of IndebtednessOff.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Credit Agreement (Amerisourcebergen Corp), Credit Agreement (Amerisourcebergen Corp)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) Indebtedness (xi) Indebtedness outstanding on the Original Closing Date and listed on in Schedule 7.03(b) hereto and any Permitted Refinancing refinancing thereof and (yii) intercompany Indebtedness outstanding on the Original Closing Date and any Permitted Refinancing refinancing thereof, of which any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that any all such intercompany Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, herein and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the an Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of $13,000,000 50,000,000 and 201.75% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Total Assets, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunderAcquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or Acquisition, and any Permitted Refinancing thereof or (ii) thereof; provided further that, after giving Pro Forma Effect pro forma effect to such Permitted Acquisition and the incurrence assumption of such Indebtedness, as applicable, the aggregate amount of such Indebtedness does not exceed (x) $50,000,000 at any time outstanding does not exceed plus (y) any additional amount of such Indebtedness so long as the sum of (x) Total Leverage Ratio is no greater than 5.50:1.00 and, if such Indebtedness is secured, the Secured Leverage Ratio is no greater of $16,250,000 and 25% of Consolidated EBITDA (than 3.75:1.00, in each case determined on a Pro Forma Basis Basis; provided that in accordance with Section 1.09) plus the case of clause (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio ), any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(s), does not exceed in the aggregate at any time outstanding the greater than 4.25:1:00of $50,000,000 and 1.75% of Total Assets, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 100,000,000 and 353.75% of Consolidated EBITDATotal Assets; provided that the aggregate principal amount of Indebtedness outstanding in reliance on this clause (m) in respect of which the primary obligor or a guarantor is a Restricted Subsidiary that is not a Loan Party shall not exceed in the aggregate at any time outstanding the greater of $50,000,000 and 1.75% of Total Assets, in each case determined at the time of incurrence;
(n) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters Indebtedness in respect of credit issued in currencies not available hereunder in an aggregate amount at the (x) Unsecured High Yield Notes (including any time outstanding not to exceed $5,000,000guarantees by the Guarantors thereof) and Permitted Refinancing thereof and (y) Secured High Yield Notes (including any guarantees by the Guarantors thereof) and Permitted Refinancing thereof;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (u) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 50,000,000 and 1510.0% of Consolidated EBITDA Total Assets (determined on excluding, solely when calculating Total Assets for purposes of this Section 7.3(u), the assets of any Person that is not a Pro Forma Basis in accordance with Section 1.09Foreign Subsidiary), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(uv) Indebtedness incurred by a Securitization Subsidiary in reliance on the Cumulative Credit;
a Qualified Securitization Financing that is not recourse (vexcept for Standard Securitization Undertakings and Limited Originator Recourse) Indebtedness of to the Borrower or any of its the Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such IndebtednessSubsidiaries; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.and
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(v) above. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, plus the aggregate amount of fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including OID) incurred in connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP.
Appears in 2 contracts
Sources: Credit Agreement (APX Group Holdings, Inc.), Credit Agreement (APX Group Holdings, Inc.)
Indebtedness. CreateThe Borrower will not, and will not permit any Restricted Subsidiary to, incur, create, assume or suffer permit to exist any Indebtedness, except:
(a) Indebtedness for borrowed money existing on the date hereof and set forth in Schedule 6.01(a); provided, however, that such Indebtedness shall be repaid concurrently with the incurrence of any Loan Party under the Loan Documents Borrowing of the Initial Credit Event hereunder (including any "Indebtedness incurred pursuant to Section 2.14 or 2.15be Paid");
(b) (x) Indebtedness outstanding on represented by the Closing Date Notes and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on by the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Noteother Credit Documents;
(c) Guarantees Indebtedness under the Senior Subordinated Notes (as the same may be amended from time to time, without increasing the committed amount thereunder, except as otherwise permitted by the Borrower this Section) and any Restricted Subsidiary in respect of Refinancing Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary with respect thereto in an aggregate principal amount on the date of any Incurrence that, when added to all other Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation Incurred pursuant to this clause and then outstanding, shall be permitted unless such guaranteeing party shall have also provided a Guarantee not exceed the sum of the Obligations on then outstanding Indebtedness under the terms set forth herein, (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Senior Subordinated Notes;
(d) Indebtedness (i) of the Borrower to any wholly owned Restricted Subsidiary or to any Guarantor and (ii) of any Restricted Subsidiary to the Borrower or any wholly owned Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany NoteSubsidiary;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred represented by the Borrower Guarantees of Indebtedness Incurred pursuant to clause (c) (provided, that any Guarantee with respect to the Senior Subordinated Notes will be subordinated to the same extent as the Senior Subordinated Notes) or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA clause (determined on a Pro Forma Basis in accordance with Section 1.09d), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed relating to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest ratesCapital Lease Obligations, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business Sale/Leaseback Transactions and not for speculative purposes and Guarantees thereofPermitted Purchase Money Liens; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided provided, that (i) solely in with respect to Capital Lease Obligations, Indebtedness relating to Purchase Money Liens and Unrestricted Sale/Leaseback Transactions, either (A) the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount Incurrence of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 relating to Capital Expenditures, Unrestricted Sale/Leaseback Transactions and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Permitted Purchase Money Liens would be permitted pursuant to Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, 6.08 in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that fiscal year in which it is the Latest Maturity DateIncurred, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall does not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount $10,000,000 at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);one time; and
Appears in 2 contracts
Sources: Credit Agreement (Hudson Respiratory Care Inc), Credit Agreement (Hudson Respiratory Care Inc)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Permitted Subordinated Indebtedness;
(b) Indebtedness of any the Loan Party Parties under the Loan Documents (including any and, until the Spin-Off occurs, Indebtedness incurred pursuant to Section 2.14 or 2.15the Existing FNIS Credit Agreement);
(bc) (xi) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) 7.03 and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on in respect of the Closing Date Senior Notes and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(cd) Guarantees by the Borrower and any a Restricted Subsidiary Company in respect of Indebtedness of the Borrower or any another Restricted Subsidiary Company otherwise permitted hereunder; provided that (Ax) no Guarantee by any Restricted Subsidiary of any Senior Note or any Permitted Subordinated Indebtedness constituting a junior lien financing (or Specified Junior Financing Obligation any Permitted Refinancing thereof) shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Subsidiary Guarantee in accordance with Section 6.12 and (By) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness;
(Ce) any Guarantee by a Loan Party of Indebtedness of a Restricted Company that constitutes an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party shall only must be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and expressly subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable IndebtednessLoan Party, it being understood that such Loan Party may make payments thereon unless an Event of Default has occurred and is continuing;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided by the Like-Kind-Exchange Companies in connection with “1031 exchange” transactions under Section 1031 of the Code (or regulations promulgated thereunder, including Revenue Procedure 2000-37) that any such Guarantees by Loan Parties is limited in recourse to the properties (real or personal) which are the subject of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to “1031 exchange” transactions (collectively, the extent constituting an Investment permitted by Section 7.02(c)(iii“Specified Non-Recourse Indebtedness” );
(g) subject to the Specified Debt Test, Indebtedness of Foreign Restricted Subsidiaries of the Borrower or any Borrower;
(h) subject to the Specified Debt Test, Indebtedness of a Restricted Subsidiary Company assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is and not incurred in contemplation of such Permitted Acquisition or other Investment or thereof, and any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basisthereof;
(hi) Indebtedness incurred by any Restricted Company representing deferred compensation to employees of Holdings or any of its a Restricted Subsidiaries Company incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings any Restricted Company to future, present or former directors, officers, members of management, employees or consultants of the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, heirs, family members, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings the Borrower permitted by Section 7.067.06(c);
(jk) Indebtedness incurred by Holdings or any of its a Restricted Subsidiaries Company in a Permitted Acquisition, any other Investment permitted hereunder, merger Acquisition or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries Company under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceAcquisitions;
(m) Indebtedness (including intercompany Indebtedness among the Restricted Companies) in an aggregate principal amount that at respect of the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDACash Management Practices;
(n) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations of a Restricted Company contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of bid, performance, bidstay, customs, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its a Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretoCompany, in each case in the ordinary course of business or consistent with past practice;
(p) Guarantees by the Borrower of Indebtedness permitted under this Section 7.03;
(q) letters Indebtedness in respect of credit issued Swap Contracts entered into in currencies the ordinary course of business and not available hereunder for speculative purposes;
(r) Indebtedness incurred in connection with a receivables securitization transaction involving the Restricted Companies and a Securitization Vehicle (a “Securitization Financing” ); provided that (i) the Net Cash Proceeds of such Indebtedness are applied to prepay the Term Loans pursuant to Section 2.05(b), (ii) such Indebtedness when incurred shall not exceed 100% of the cost or fair market value, whichever is lower, of the property being acquired on the date of acquisition, (iii) such Indebtedness is created and any Lien attaches to such property concurrently with or within forty-five (45) days of the acquisition thereof, and (iv) such Lien does not at any time encumber any property other than the property financed by such Indebtedness;
(i) Attributable Indebtedness and purchase money obligations (including obligations in respect of mortgage, industrial revenue bond, industrial development bond and similar financings), in each case of the Borrower or a Restricted Subsidiary to finance the purchase, repair or improvement of fixed or capital assets within the limitations set forth in Section 7.01(p) and any Permitted Refinancing thereof, provided that the aggregate principal amount of all such Indebtedness under this clause (i) shall not exceed $35,000,000 at any time outstanding and (ii) Indebtedness secured by Liens permitted under Sections 7.01(e)(ii), 7.01(f) or 7.01(r);
(t) subject to the Specified Debt Test, other Indebtedness of Restricted Companies in an aggregate principal amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 350,000,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;Shareholders’ Equity; and
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w)(t) above;
Appears in 2 contracts
Sources: Credit Agreement (Lender Processing Services, Inc.), Credit Agreement (Lender Processing Services, Inc.)
Indebtedness. CreateEach Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(a) (i) Indebtedness of any Loan Party created under the Loan Documents (including with respect to Specified Refinancing Debt), (ii) Indebtedness of the Loan Parties evidenced by Refinancing Notes and any Permitted Refinancing Indebtedness incurred pursuant to Section 2.14 or 2.15)in respect thereof and (iii) Indebtedness of the Loan Parties evidenced by Refinancing Loans and any Permitted Refinancing Indebtedness in respect thereof;
(b) (x) Indebtedness outstanding existing on the Closing Date date hereof and listed on set forth in Schedule 7.03(b) 6.01 and any Permitted Refinancing thereof Indebtedness in respect thereof;
(c) Indebtedness among Holdings and its Subsidiaries (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofincluding between or among Subsidiaries); provided that any such intercompany Indebtedness Indebtedness, individually, of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, Subsidiary in excess of $5,000,000 must be expressly subordinated to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent Obligations in accordance with the terms of the Security Agreement and Global Intercompany Note, within thirty (y30) all days of the incurrence of such Indebtedness or such later date as the Administrative Agent may agree in its sole discretion;
(d) Guarantees by the Parent Borrower of Indebtedness of any Loan Party owed to Subsidiary and by any Restricted Subsidiary of Indebtedness of the Parent Borrower or any other Subsidiary; provided that is not a Loan Party (i) Guarantees by the Parent Borrower or any Restricted Subsidiary of Indebtedness of any Unrestricted Subsidiary shall be unsecured and subject to compliance with Section 6.04 (other than clause (e) thereof), (ii) Guarantees permitted under this clause (d) shall be subordinated to the Obligations of the applicable Restricted Subsidiary to the same extent and on terms not materially less favorable to the Lenders as the Indebtedness so Guaranteed is subordinated to the Obligations and (iii) no Indebtedness under the Permitted Ratio Debt, Incremental Equivalent Debt, Refinancing Notes or any Refinancing Loans or any Permitted Refinancing Indebtedness in respect thereof shall be Guaranteed by any Restricted Subsidiary unless such Restricted Subsidiary is a Loan Party that has Guaranteed the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Notea Guaranty;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Parent Borrower or any Restricted Subsidiary incurred to finance the acquisition, lease, construction, replacement, repair or improvement of any assets or other Investments permitted hereunder (including rolling stock), including Capital Lease Obligations, mortgage financings, purchase money indebtedness (including any industrial revenue bonds, industrial development bonds and similar financings); provided that, (A) such Indebtedness is incurred prior to or within 270 two hundred seventy (270) days after such acquisition or lease or the acquisition, completion of such construction, repair, replacement, lease repair or improvements of improvement and (B) the applicable asset in an aggregate amount of Indebtedness permitted pursuant to this clause (e)(i) of this Section 6.01 shall not to exceed the greater of $13,000,000 35,000,000 and 2038.00% of Consolidated Adjusted EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence of such Indebtedness (together with any Permitted Refinancings thereofcalculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period on or prior to the date of determination) at any time outstanding outstanding, and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable IndebtednessIndebtedness in respect thereof;
(f) Indebtedness arising in respect of connection with Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereofAgreements permitted by Section 6.13; provided that any such Guarantees by any Loan Parties Party of such Indebtedness of Restricted Subsidiaries that are not Loan Parties any Unrestricted Subsidiary shall only be permitted subject to the extent constituting an Investment permitted by compliance with Section 7.02(c)(iii)6.04;
(g) (i) Indebtedness of the Borrower or any Person that becomes a Restricted Subsidiary after the date hereof (including any Indebtedness assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunderthe acquisition of a Restricted Subsidiary); provided that (iA) solely in the case no Event of assumed IndebtednessDefault has occurred and is continuing or would result therefrom, (B) such Indebtedness exists at the time such Person becomes a Restricted Subsidiary and is not incurred created in contemplation of or in connection with such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or Person becoming a Restricted Subsidiary and (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (xC) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis Parent Borrower is in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrencecompliance, on a Pro Forma Basis in accordance Basis, with Section 1.09; provided that, in the case of clause Financial Covenant and (ii), (A) such any Permitted Refinancing Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basisrespect thereof;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) workers compensation claims, health, disability or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations employee benefits, unemployment insurance and other Indebtedness social security laws or regulations or property, casualty or liability insurance and premiums related thereto, self-insurance obligations, obligations in respect of netting servicesbids, automatic clearinghouse arrangementstenders, overdraft protectionstrade contracts, employee credit card programs governmental contracts and other cash management leases, statutory obligations, customs, surety, stay, appeal and performance bonds, and performance and completion guarantees and similar arrangements in obligations incurred by the ordinary course of business and Parent Borrower or any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangementsRestricted Subsidiary, in each case, in the ordinary course of business;
(oi) to the extent constituting Indebtedness, 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 the real property of the Parent Borrower or any Restricted Subsidiary;
(j) to the extent constituting Indebtedness, customary indemnification and purchase price adjustments or similar obligations (including earn-outs) incurred or assumed in connection with Investments and Dispositions otherwise permitted hereunder;
(k) to the extent constituting Indebtedness, unfunded pension fund and other employee benefit plan obligations and liabilities to the extent they are permitted to remain unfunded under applicable Law;
(l) to the extent constituting Indebtedness, deferred compensation or similar arrangements payable to future, present or former directors, officers, employees, members of management or consultants of the Parent Borrower and the Restricted Subsidiaries;
(m) Indebtedness incurred in respect of repurchase agreements constituting Cash Equivalents;
(n) Indebtedness consisting of promissory notes (or similar evidences of indebtedness) issued by the Parent Borrower or any Restricted Subsidiary to any stockholder of any Parent Company or to future, present or former directors, officers, members of management, employees or consultants of any Parent Company, the Parent Borrower or any of its Subsidiaries or their respective estates, executors, administrators, heirs, family members, legatees, distributees, spouses or former spouses, domestic partners or former domestic partners to finance the purchase or redemption of Equity Interests of the Parent Borrower or any Parent Company permitted by Section 6.06;
(o) cash management obligations and Indebtedness incurred by the Parent Borrower or any Restricted Subsidiaries Subsidiary in respect of letters of creditnetting services, bank guaranteesoverdraft protections, bankers’ acceptancescommercial credit cards, warehouse receipts stored value cards, purchasing cards and treasury management services, automated clearing-house arrangements, employee credit card programs, controlled disbursement, ACH transactions, return items, interstate deposit network services, dealer incentive, supplier finance or similar instruments issued programs, Society for Worldwide Interbank Financial Telecommunication transfers, cash pooling and operational foreign exchange management and similar arrangements, in each case entered into in the ordinary course of business in connection with cash management, including among the Parent Borrower and its Restricted Subsidiaries, and deposit accounts;
(p) (i) Indebtedness consisting of the financing of insurance premiums and (ii) take-or-pay obligations constituting Indebtedness of the Parent Borrower or created any Restricted Subsidiary, in each case, entered into in the ordinary course of business;
(q) Indebtedness incurred by a Loan Party with respect to letters of credit (other than Letters of Credit issued pursuant to this Agreement); provided that (i) upon the drawing of any such letters of credit or the incurrence of such Indebtedness, including such obligations are reimbursed within thirty (30) days following such drawing or incurrence and (ii) the aggregate outstanding face amount of all such letters of credit or bank guarantees does not exceed $35,000,000 at any time;
(r) obligations, contingent or otherwise, for the payment of money under any non-compete, consulting or similar agreement entered into with the seller of a Target or any other similar arrangements providing for the deferred payment of the purchase price for an acquisition permitted hereby;
(s) Indebtedness of the type described in clause (e) of the definition of “Indebtedness” to the extent the related Lien is permitted under Section 6.02;
(t) other Indebtedness of the Parent Borrower and its Restricted Subsidiaries; provided that the aggregate principal amount of Indebtedness permitted by this clause (t) shall not exceed the greater of $35,000,000 and 38.00% of Adjusted EBITDA (determined at the time of incurrence of such Indebtedness (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period on or prior to the date of determination) at any time outstanding;
(u) unsecured Indebtedness in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any Restricted Subsidiary to pay the deferred purchase price of its Restricted Subsidiaries goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case connection with open accounts extended by suppliers on customary trade terms in the ordinary course of business or consistent with past practice;
(q) letters of credit issued and not in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated connection with the principal amount borrowing of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Creditmoney;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a are not Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited Parties in connection with Indebtedness incurred an aggregate amount outstanding not to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of $20,000,000 and 22.00% of Adjusted EBITDA (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment determined at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount incurrence of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period on or prior to the date of determination) in the aggregate provided such Indebtedness is no more than either (xi) 4.00:1.00 unsecured or (yii) secured by only the Equity Interests in or assets of any Restricted Subsidiaries that are not a Subsidiary Loan Party;
(w) to the extent incurred constituting Indebtedness, Guarantees in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater ordinary course of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as business of the date obligations of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereundersuppliers, the greater of (I) 4.25:1.00 customers, franchisees and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA licensees of the Parent Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)its Subsidiaries;
(x) all premiums Indebtedness in connection with Permitted Sale-Leaseback Transactions;
(if anyy) Indebtedness in respect of (i) one or more series of notes issued by any of the Borrowers that are either (x) senior or subordinated and unsecured or (y) secured by Liens on the Collateral ranking junior to or pari passu with the Liens securing the Obligations, in each case, issued in a public offering, Rule 144A or other private placement in lieu of the foregoing (and any Registered Equivalent Notes issued in exchange therefor), interest and (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aii) through 7.03(w);loans made to any of the Borrowers that are either
Appears in 2 contracts
Sources: Credit Agreement (Krispy Kreme, Inc.), Credit Agreement (Krispy Kreme, Inc.)
Indebtedness. CreateNone of the Borrower and the Restricted Subsidiaries shall directly or indirectly create, incur, assume or suffer to exist any Indebtedness, except:
(a) (i)(A) Indebtedness of any Loan Party under the Loan Documents and Secured Loan Document Hedge Obligations and (including B) Indebtedness constituting SDB Revolving Obligations, the revolving commitments in respect of which shall not exceed an aggregate outstanding principal amount of $100,000,000 at any Indebtedness time, and (ii) Term Obligations the loans in respect of which shall not exceed an aggregate outstanding principal amount at any time of the sum of (A) $1,725,000,000 plus (B) the Permitted Incremental Availability Amount; provided that Term Obligations shall (x) be subject to the Collateral Agency and Intercreditor Agreement, (y) not be incurred pursuant to Section 2.14 by a non-Loan Party or 2.15)guaranteed by a Person that is not a Guarantor unless such Person also guarantees the Obligations and (z) not be secured by assets that do not constitute Collateral;
(b) (xi) Indebtedness outstanding on the Closing Third Amendment Effective Date and listed on Schedule 7.03(b7.3(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Third Amendment Effective Date and any Permitted Refinancing refinancing thereof, of which any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder; provided that (Ai) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, herein and (Bii) if the Indebtedness being Guaranteed guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.2; provided that (x) no all such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the an Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset in an aggregate amount not to exceed the greater of (x) $13,000,000 70,000,000 and 20(y) 35% of LTM Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09after giving effect to any concurrent Investments), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and outstanding, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m7.5(l), and (iii) and any Permitted Refinancing of such Attributable Indebtednessany of the foregoing;
(f) Indebtedness in respect of Swap Contracts Hedging Transactions designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities other commodity pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary that is a Loan Party incurred or assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunderAcquisition, and any Permitted Refinancing thereof; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect pro forma effect to such Permitted Acquisition and the incurrence or assumption of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum greater of (xi) the greater of $16,250,000 70,000,000 and 25(ii) 35% of LTM Consolidated EBITDA EBITDA; provided, further, that any Indebtedness incurred (determined on a Pro Forma Basis in accordance with Section 1.09but not assumed) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(gclause (g) shall not exceed be subject to the greater requirements included in the first proviso under the definition of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis“Permitted Ratio Debt”;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower (or any direct or indirect parent thereof) or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors directors, and employees, their respective estates, spouses spouses, or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.067.6;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other connection with an Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment Investments expressly permitted hereunder;
(l) Cash Management Obligations cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(m) Indebtedness of the Borrower or any of its Restricted Subsidiaries, in an aggregate principal amount at any time outstanding that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of (i) $22,750,000 95,000,000 and 35(ii) 45% of LTM Consolidated EBITDAEBITDA at such time (after giving effect to any concurrent Investments), together with any Permitted Refinancing thereof;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability disability, or other employee benefits or property, casualty or liability insurance or self-insurance insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within thirty (30) days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal appeal, and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower and/or any 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 its Restricted Subsidiaries that is a Loan Party that complies with clauses (asuch notes), (c) and (d) (as applicable) of the Applicable Requirementsjunior secured or unsecured “mezzanine” loans or notes or senior unsecured or subordinated loans or notes, so long as no Default in each case, pursuant to an indenture, interim agreement, loan agreement, syndicated credit agreement, note purchase agreement or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) otherwise and any other Default or Event extensions, renewals, refinancings and replacements thereof, including in the case of Default that is a condition to any such notes, any Registered Equivalent Notes (the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness“Incremental Equivalent Debt”); provided that:
that (i) if any such Indebtedness Incremental Equivalent Debt that is secured shall not be secured by any property or assets of Holdings, the Borrower or any Restricted Subsidiary other than the Collateral securing the Obligations, (ii) in the case of Incremental Equivalent Debt secured on a pari passu in right of security basis with the ObligationsLoans (“Incremental Equivalent First Lien Debt”), have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Term Loans (without giving effect to any prior payments that would otherwise modify such Weighted Average Life to Maturity) and, in the case of Incremental Equivalent Debt that is secured on a junior lien basis with the Loans or is unsecured (“Incremental Equivalent Junior Lien Debt”), shall not be subject to scheduled amortization prior to maturity; provided that the foregoing requirements of this clause (ii) shall not apply to the extent such Indebtedness constitutes Extendable Bridge Loans (as defined in the Term Credit Agreement as of the Third Amendment Effective Date) or any facility in respect thereof, (iii) in the case of Incremental Equivalent First Lien Debt, have a maturity date that is after the Revolving Commitment Termination Date at the time such Indebtedness is incurred, and in the case of Incremental Equivalent Junior Lien Debt, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date (as defined in the Term Credit Agreement as of the Third Amendment Effective Date) at the time such Indebtedness is incurred; provided that the foregoing requirements of this clause (iii) shall not apply to the extent such Indebtedness constitutes Extendable Bridge Loans (as defined in the Term Credit Agreement as of the Third Amendment Effective Date) or any facility in respect thereof, (iv) the aggregate outstanding principal amount of all Incremental Equivalent Debt incurred in accordance with this Section 7.3(q), together with the aggregate principal amount of such Indebtedness all Incremental Commitments shall not exceed an amount so long the Permitted Incremental Availability Amount, (v) the security agreements, if applicable, relating to such Indebtedness are substantially the same as on and the Collateral Documents (with such differences as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) reasonably satisfactory to the extent incurred in connection with a Permitted Acquisition or Administrative Agent), (vi) such Indebtedness is not guaranteed by any Person other Investment permitted hereunderthan the Guarantors, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iivii) if such Indebtedness Incremental Equivalent Debt is secured on a junior basis in right of security with the Obligationssecured, the aggregate principal amount Other Debt Representative acting on behalf of the holders of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) have become party to the extent incurred Collateral Agency and Intercreditor Agreement and/or Junior Lien Intercreditor Agreement, as applicable, (viii) in connection with a Permitted Acquisition or other Investment permitted hereunderthe case of Incremental Equivalent First Lien Debt in the form of term loans, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment MFN Protection (if applicable) set forth as defined in the proviso to Section 2.14(e)(iiiTerm Credit Agreement on the date hereof) as if such Indebtedness were an Permitted Incremental Term Loan incurred thereunder. For purposes Loans, (ix) after giving effect to incurrence of Incremental Equivalent Debt, no Event of Default shall exist and be continuing or would immediately result from incurrence of such Incremental Equivalent Debt or from the application of the calculations proceeds therefrom; provided that if the proceeds of such Incremental Equivalent Debt are being used to finance a Permitted Acquisition, Investment, or irrevocable repayment, repurchase or redemption, there shall be no requirement to satisfy any or all conditions set forth in this clause (ix) except that the requirement that no Event of Default under Section 7.03(v8.1(a), (Ab), (g) or (i) with respect to any Revolving Credit Commitments, a borrowing the Borrower shall have occurred and be continuing or would exist after giving effect to the incurrence of such Incremental Equivalent Debt shall not be omitted or waived without the consent of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay IndebtednessRequired Lenders, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if anyexcept as otherwise set forth in this Section 7.3(q), interest the terms and conditions of such Incremental Equivalent Debt shall be customary as of the date of incurrence of such Incremental Equivalent Debt and (including post-petition interestxi) subject to clauses (ii), (iii) and (viii) above, the amortization, pricing, rate floors, discounts, fees, expensespremiums, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w)optional prepayment and redemptions provisions applicable to such Incremental Equivalent Debt shall be determined by the Borrower and the holders of such Incremental Equivalent Debt, together with any Permitted Refinancing thereof;
Appears in 2 contracts
Sources: Revolving Credit Agreement (WaterBridge Infrastructure LLC), Revolving Credit Agreement (WaterBridge Infrastructure LLC)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents The Senior Notes (including any Indebtedness incurred guarantees thereof by the Subsidiary Guarantors) issued on the Closing Date in an aggregate principal amount of $625,000,000, the exchange notes and related exchange guarantees to be issued by the Subsidiary Guarantors in exchange for such Senior Notes pursuant to Section 2.14 or 2.15)the registration rights agreement entered into in connection with the issuance of such Senior Notes, and any Permitted Refinancing of the foregoing;
(b) Indebtedness of the Loan Parties under the Loan Documents;
(xc) Indebtedness of DBI and its Subsidiaries outstanding on the Closing Date date hereof and listed on Schedule 7.03(bin Section 7.03(c) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on of the Closing Date Confidential Disclosure Letter and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(cd) Guarantees by the Borrower and or any Restricted Subsidiary in respect of Indebtedness of the Borrower or any such Restricted Subsidiary otherwise permitted hereunderhereunder and to the extent permitted by Section 7.02; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the applicable Guaranty to the extent required by Section 6.12 and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination provisions of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(de) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party the Borrower or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an such Investment is permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall must be unsecured and expressly subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Notesuch Loan Party;
(e) (if) Attributable Indebtedness and other Indebtedness purchase money obligations (including Capitalized Leasesobligations in respect of mortgage, industrial revenue bond, industrial development bond, and similar financings) financing an acquisitionto finance the purchase, construction, repair, replacement, lease repair or improvement of a fixed or capital asset incurred by assets within the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset limitations set forth in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m7.01(i) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that the aggregate amount of all such Indebtedness at any such Guarantees by Loan Parties one time outstanding shall not exceed the greater of such (A) $65,000,000 and (B) 2.0% of Total Assets as of the end of the Test Period;
(g) Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to in an aggregate principal amount at any time outstanding for all such Persons taken together not exceeding the extent constituting an Investment permitted by Section 7.02(c)(iii)greater of (A) $65,000,000 and (B) 2.00% of Total Assets as of the end of the Test Period;
(gh) Indebtedness in respect of the Borrower or any Restricted Subsidiary Swap Contracts not incurred for speculative purposes;
(i) Indebtedness (other than for borrowed money) subject to Liens permitted under Section 7.01;
(j) (i) Indebtedness (not constituting Disqualified Equity Interests) assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunderAcquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) Acquisition; provided that both immediately prior and after giving Pro Forma Effect effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such any Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of incurred pursuant to this clause (iij)(i), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (Bx) no Event of Default shall exist or result therefrom therefrom, and (other than y) the Borrower and its Restricted Subsidiaries shall be in connection Pro Forma Compliance with a Limited Condition Transaction where the standard covenants set forth in Section 7.10 and the Borrower’s Total Leverage Ratio shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed greater than the greater of (x1) $9,750,000 6.50 to 1.0 as of the end of the Test Period last ended, after giving effect to such Permitted Acquisition and the assumption, incurrence or issuance of such Indebtedness and (y2) 15% of Consolidated EBITDA of the Borrower determined at Total Leverage Ratio immediately prior to the time consummation of such incurrence on a Pro Forma BasisPermitted Acquisition and (ii) any Permitted Refinancing thereof;
(hk) Indebtedness representing deferred compensation to employees of Holdings the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of businessSubsidiary;
(il) Indebtedness consisting constituting obligations for indemnification, the adjustment of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase price or redemption of Equity Interests of Holdings similar adjustments incurred under agreements for a Permitted Acquisition or any direct or indirect parent of Holdings permitted by Section 7.06Disposition;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(km) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunderAcquisitions;
(ln) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business each case in connection with cash management and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencedeposit accounts;
(mo) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not to exceed the greater of (A) $22,750,000 100,000,000 and 35(B) 3.25% of Consolidated EBITDATotal Assets as of the end of the Test Period at any time outstanding;
(np) Indebtedness consisting of (iA) the financing of insurance premiums or (iiB) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(oq) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in Subsidiary constituting reimbursement obligations with respect of to letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments credit issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within thirty (30) days following such drawing or incurrence;
(pr) obligations in respect of performancesurety, bidstay, customs and appeal and surety bonds, performance bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments credit related thereto, in each case in the ordinary course of business or consistent with past practice;
(qs) letters (i) (A) Permitted Unsecured Indebtedness to the extent the Net Cash Proceeds of credit issued such Permitted Unsecured Indebtedness are utilized within ninety (90) days of the incurrence thereof to finance a Permitted Acquisition (or if not so utilized within such time period, solely to the extent the Net Cash Proceeds of such Permitted Unsecured Indebtedness are applied to prepay Term Loans pursuant to Section 2.05(b)(iv)) and (B) Indebtedness owed to the seller of any property acquired in currencies not available hereunder a Permitted Acquisition, so long as (x) the Borrower shall be in an Pro Forma Compliance with the covenants set forth in Section 7.10, (y) if the aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Permitted Unsecured Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA clause (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (cs)(i)(A) and (ds)(i)(B) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligationsexceeds $50,000,000, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Borrower’s Total Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is shall be no more greater than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I1) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior 6.50 to 1.0 after giving effect to such Permitted Acquisition and the assumption, incurrence or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount issuance of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition and (z) no Event of Default shall have occurred and be continuing or other Investment; provided that would result therefrom, (Aii) Permitted Second Lien Indebtedness to the aggregate principal amount at any time outstanding extent the Net Cash Proceeds of such Indebtedness are utilized within ninety (90) days of Subsidiaries that the incurrence thereof to finance a Permitted Acquisition (or if not so utilized within such time period, solely to the extent the Net Cash Proceeds of such Permitted Second Lien Indebtedness are non-Loan Parties incurred applied to prepay Term Loans pursuant to this Section 7.03(v2.05(b)(iv)), so long as (x) the Borrower shall not exceed be in Pro Forma Compliance with the covenants set forth in Section 7.10, (y) the Senior Secured Leverage Ratio shall be no greater than the greater of (x1) $9,750,000 4.0 to 1.0 as of the end of the Test Period then last ended, after giving effect to such Permitted Acquisition and the assumption, incurrence or issuance of such Indebtedness and (y2) 15% the Total Leverage Ratio immediately prior to the consummation of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence such Permitted Acquisition and (Bz) provided that if such Indebtedness is a term loan that is not subordinated in right no Event of payment to the Loan Documents Default shall have occurred and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loansbe continuing or would result therefrom, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (Biii) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings Refinancing of Indebtedness incurred pursuant to clause (i) or (ii) hereof meeting the requirements of Permitted Unsecured Indebtedness or Permitted Second Lien Indebtedness, as applicable;
(t) Indebtedness in respect of (x) any bankers’ acceptance, letter of credit, warehouse receipt or similar facilities entered into in the ordinary course of business or (y) any letter of credit issued in favor of the L/C Issuer or the Swing Line Lender to support any Defaulting Lender’s participation in Letters of Credit or Swing Line Loans, respectively, as contemplated by Section 7.03(v2.03(a)(ii)(E) or 2.04(b), respectively;
(u) Indebtedness to current or former officers, directors, managers, consultants and employees, their Controlled Investment Affiliates or Immediate Family Members to finance the purchase or redemption of Equity Interests (other than Disqualified Equity Interests) of the Borrower (or any direct or indirect parent thereof) permitted by Section 7.06;
(v) (i) Permitted Subordinated Indebtedness to finance any prepayments of Indebtedness under the Loan Documents pursuant to Section 2.05(b)(iv) or 10.07(l) and (ii) any Permitted Refinancing thereof meeting the requirements of Permitted Subordinated Indebtedness;
(w) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services;
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w(w);
(y) Guarantees by the Borrower or any Restricted Subsidiary of obligations of franchisees or any of their Affiliates in an aggregate outstanding amount not to exceed the greater of (A) $30,000,000 and (B) 1.0% of Total Assets as of the end of the Test Period at any time outstanding;
(z) the Subordinated Note; and
(aa) Permitted Unsecured Refinancing Debt, Permitted First Priority Refinancing Debt and Permitted Second Priority Refinancing Debt, in each case of a Loan Party. Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount, and the payment of interest or dividends in the form of additional Indebtedness shall in each case not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Dunkin' Brands Group, Inc.), Credit Agreement (Dunkin' Brands Group, Inc.)
Indebtedness. Create(a) The Borrower will not permit any of its Restricted Subsidiaries (other than (i) a Credit Party or (ii) TWE and the consolidated Subsidiaries of TWE) to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(ai) with respect to all such Restricted Subsidiaries that are also Subsidiaries of Time Warner, Indebtedness of up to an aggregate principal amount of $650,000,000 at any one time outstanding;
(ii) with respect to all such Restricted Subsidiaries that are also Subsidiaries of America Online, Indebtedness of up to an aggregate principal amount of $350,000,000 at any one time outstanding;
(iii) Indebtedness of any Loan Party under such Restricted Subsidiary to the Loan Documents (including Borrower or any Indebtedness incurred pursuant to Section 2.14 or 2.15)Subsidiary;
(biv) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that Guarantee Obligations of any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated with respect to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any wholly owned Restricted Subsidiary;
(v) Indebtedness of any such Restricted Subsidiary otherwise permitted hereunderincurred to finance the acquisition, construction or improvement of any property, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such property or secured by a Lien on any such property prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that the aggregate principal amount of Indebtedness permitted by this clause (Av) no Guarantee by with respect to any Restricted Subsidiary such property shall not exceed 110% of the purchase price for, or the cost of construction or improvement of, such property;
(vi) Indebtedness of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of Person that becomes a Restricted Subsidiary that is not a Loan Party shall only be permitted to after the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)date hereof; provided that (x) no such Indebtedness owed to exists at the time such Person becomes a Loan Party shall be evidenced by Subsidiary and is not created in contemplation of or in connection with such Person becoming a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement Subsidiary and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Datenot, directly or indirectly, have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price recourse (including earn-outsby way of setoff) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in any asset thereof other than to the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed Person so acquired and its Subsidiaries and the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness assets of the Borrower or any of Person so acquired and its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such IndebtednessSubsidiaries; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);and
Appears in 2 contracts
Sources: Credit Agreement (Aol Time Warner Inc), Credit Agreement (Aol Time Warner Inc)
Indebtedness. CreateThe Company will not and will not permit any Restricted Subsidiary to create, issue, incur, assume assume, become liable in respect of or suffer to exist any Indebtedness, exceptexist:
(a) any Indebtedness pursuant to any Receivables Transaction, except for Indebtedness pursuant to a Receivables Transaction that is (i) nonrecourse with respect to the Company and its Restricted Subsidiaries (other than any Receivables Subsidiary and to any Equity Interests of such Receivables Subsidiary (and the proceeds thereof)) and (ii) in an aggregate principal amount at the most recent date on which any such Indebtedness is incurred not exceeding the greater of (x) $400,000,000 or (y) 15% of Adjusted Consolidated Total Assets as of the last day of the then most recently ended fiscal quarter of the Company immediately on or prior to such incurrence date; or
(b) any Indebtedness of any Loan Party under of the Loan Documents Restricted Subsidiaries other than:
(including i) Indebtedness of any Indebtedness incurred Receivables Subsidiary pursuant to any Receivables Transaction permitted under Section 2.14 or 2.1510.6(a);
(bii) (x) any Indebtedness outstanding of any Restricted Subsidiary existing on the Closing Date date of this Agreement and listed set forth on Schedule 7.03(b) 10.6 and any Permitted Refinancing refinancing thereof; provided that the then outstanding principal amount thereof is not increased and the weighted average maturity thereof is not decreased;
(yiii) intercompany any Indebtedness outstanding on of any Restricted Subsidiary which is a Subsidiary Guarantor, so long as such Restricted Subsidiary has complied with the Closing Date and requirements of Section 9.8 in respect of its Subsidiary Guarantee;
(iv) any Permitted Refinancing thereofIndebtedness of any Restricted Subsidiary owed to the Company or any other Restricted Subsidiary; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party Guarantor shall only be permitted pursuant to this Section 10.6(b)(iv) to the extent constituting an Investment permitted by owed to the Company or another Subsidiary Guarantor;
(v) any Indebtedness arising in respect of Capital Leases or purchase money obligations incurred in accordance with Section 7.02(c)(iii10.5(f);
(dvi) any other Indebtedness of Restricted Subsidiaries; provided that such Indebtedness, taken together with Indebtedness of the Borrower Company and Indebtedness or other obligations permitted to be secured pursuant to Section 10.5(o) of this Agreement, shall not at the most recent date on which any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset obligation was incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and 400,000,000 or (y) 15% of Adjusted Consolidated EBITDA Total Assets as of the Borrower determined at last day of the time then most recently ended fiscal quarter of the Company immediately on or prior to such incurrence on a Pro Forma Basisdate;
(hvii) (A) Indebtedness representing deferred compensation to employees of Holdings the Joint Venture and its Subsidiaries under the ▇▇▇▇▇▇▇ Credit Agreement (or any Permitted JV Refinancing Indebtedness in respect thereof) in each case in a principal amount not to exceed $350,000,000 at any time and (B) other Indebtedness of its Restricted Subsidiaries incurred in joint ventures of the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings Company or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, an aggregate principal amount for all such joint ventures not to exceed $100,000,000 at any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;time; and
(kviii) Indebtedness consisting of obligations any Restricted Subsidiary of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness the Company in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in connection with deposit accounts in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Private Shelf Agreement (Henry Schein Inc), Private Shelf Agreement (Henry Schein Inc)
Indebtedness. Create, incur, assume or suffer to exist Incur any Indebtedness, except:
(a) Indebtedness of GBT, any Loan Party Borrower and any of their Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15Sections 2.14, 2.15 and 2.17);
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note[Reserved];
(c) Indebtedness existing on the Restatement Date (x) with an individual value not in excess of $10,000,000 or (y) listed on Schedule 7.03(c) and in each case of the foregoing clauses (x) and (y), any Permitted Refinancing Indebtedness thereof;
(d) Guarantees by the of GBT, any Borrower and any their Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower GBT or any Restricted Subsidiary of its Subsidiaries otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (Bi) if the Indebtedness being Guaranteed guaranteed is subordinated in right of payment to the Obligations, such Guarantee Guarantees shall be subordinated in right of payment to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (Cii) any no Guarantee by a Loan Party of Indebtedness of a any Restricted Subsidiary that is not of any Indebtedness for borrowed money of a Loan Party shall only be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations;
(e) Indebtedness of GBT, any Borrower or any Restricted Subsidiary (i) owing to GBT, any Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party pursuant to this clause (i) shall be subject to the Subordinated Intercompany Note or (ii) owing to any Parent Entity that is not a Loan Party or any other direct or indirect shareholder of such a Parent Entity or GBT; provided that all such Indebtedness pursuant to this clause (ii) shall be unsecured and subordinated in right of payment to the Obligations pursuant on terms reasonably acceptable to subordination terms substantially consistent with the terms Administrative Agent and shall mature no earlier than 91 days following the Latest Maturity Date (as in effect on the date of the Intercompany Noteincurrence of such Indebtedness);
(ef) (i) Attributable Indebtedness Capitalized Lease Obligations, Purchase Money Obligations and other Indebtedness (including Capitalized Leases) financing an the acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to assets; provided that (x) such Indebtedness is Incurred concurrently with or within 270 two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA improvement, (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereofy) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and acquire the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity Equity Interests of any Term Loan outstanding at the time such Indebtedness is incurred or issuedPerson, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (Cz) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(gclause (i) (when aggregated with the amount of Permitted Refinancing Indebtedness pursuant to clause (ii) in respect of such Indebtedness then outstanding), measured at the time of Incurrence and after giving pro forma effect thereto and the use of the proceeds thereof, shall not not, except as contemplated by the definition of “Permitted Refinancing Indebtedness”, exceed the greater of (xa) $9,750,000 65,000,000 and (yb) 15% of Consolidated EBITDA of GBT and its Restricted Subsidiaries for the Borrower determined at Test Period most recently ended on or prior to the time date such Indebtedness is Incurred (measured as of such incurrence date) based upon the Section 6.01 Financials most recently delivered on a Pro Forma Basisor prior to such date, and (ii) any Permitted Refinancing Indebtedness Incurred to Refinance such Indebtedness;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(jg) Indebtedness incurred by Holdings GBT or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kh) Indebtedness consisting in respect of obligations Swap Contracts incurred in the ordinary course of Holdings business and not for speculative purposes;
(i) Indebtedness assumed after the Restatement Date in connection with any Permitted Acquisition (or similar Investment not prohibited hereunder); provided that (A) the only obligors with respect to any Indebtedness Incurred pursuant to this clause (i) shall be those Persons who were obligors of such Indebtedness prior to such Permitted Acquisition or Investment (or in the case of a purchase of assets not constituting Equity Interests, the purchaser of such assets), (B) such Indebtedness was not created in contemplation of such Permitted Acquisition or Investment and (C) to the extent such Indebtedness is secured by a Lien on any assets or property of GBT, any Borrower or any of its Restricted Subsidiaries under Subsidiary, it shall be subject to any applicable limitations set forth in Section 7.01(n);
(i) Indebtedness representing deferred compensation to officers, directors, partners, managers, employees, consultants, independent contractors or other service providers of GBT, any Borrower or any Restricted Subsidiary Incurred in the ordinary course of business; and (ii) to the extent constituting Indebtedness, other similar arrangements incurred Incurred by such Person Persons in connection with Permitted Acquisitions or any other Investment expressly permitted hereunderunder Section 7.02 (other than Section 7.02(f) and Section 7.02(cc);
(k) [reserved];
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of promissory notes issued by any Loan Party or Restricted Subsidiary to future, present or former officers, directors, partners, managers, employees, consultants, independent contractors or other service providers (ior their respective Immediate Family Members) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangementsGBT, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the any Borrower or any Restricted Subsidiary to finance the retirement, acquisition, repurchase, purchase or redemption of its Restricted Subsidiaries in respect Equity Interests of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretoGBT, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrenceby Section 7.06;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Amendment No. 2 (Global Business Travel Group, Inc.), Amendment No. 1 (Global Business Travel Group, Inc.)
Indebtedness. CreateThe Borrower will not, incurand will not permit any Restricted Subsidiary to, assume directly or suffer to exist indirectly, incur any Indebtedness except the following (each of the following, “Permitted Indebtedness, except:”):
(a) Indebtedness of the Borrower and any Loan Party Guarantor under the ABL Facility (including reimbursement obligations with regard to letters of credit) incurred pursuant to this clause (a) in an aggregate principal amount at any time outstanding not to exceed $50,000,000;
(b) Indebtedness of the Borrower and any Guarantor incurred under this Agreement and the other Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.152.04 and Section 2.19 hereof);
(b) (xc) Indebtedness of the Borrower and the Restricted Subsidiaries listed on Schedule 6.01 to the extent outstanding on the Closing Date and listed on Schedule 7.03(b(other than Indebtedness referred to in clauses (a) and any Permitted Refinancing thereof and (yb) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iiiabove);
(d) Indebtedness in respect of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but onlyHedge Contracts, in the case of Indebtedness of a non-Loan Party owing to a Loan Partyincluding, to the extent constituting an Investment permitted by Section 7.02(c)(iii)without limitation, Permitted Commodity Hedge Agreements and Permitted Interest Rate Hedge Agreements; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Hedge Contracts are designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities other commodity pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties the purpose of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)speculation;
(ge) Indebtedness of the Borrower owed to a Restricted Subsidiary and Indebtedness of any Restricted Subsidiary owed to the Borrower or any other Restricted Subsidiary; provided, that (i) upon any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or such Indebtedness being owed to any Person other than the Borrower or a Restricted Subsidiary, the Borrower or such Restricted Subsidiary, as applicable, shall be deemed to have incurred Indebtedness not permitted by this clause (e) and (ii) with respect to Foreign Subsidiaries, all such Indebtedness is (A) evidenced by a master intercompany note, in form and substance reasonably satisfactory to Agent (the “Intercompany Note”), and, if owed to a Loan Party, shall be subject to a first priority perfected Lien in favor of Administrative Agent pursuant to the Loan Documents, and (B) unsecured and subordinated in right of payment to the payment in full of the Obligations pursuant to the terms of the Intercompany Note;
(f) Indebtedness in respect of bid, letters of credit, performance or surety bonds issued for the account of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business, including Guarantees or obligations of the Borrower or any Restricted Subsidiary with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(ig) Purchase Money Indebtedness consisting of promissory notes issued incurred by Holdings the Borrower or any Restricted Subsidiary (other than the HNZ Group), and Refinancing Indebtedness thereof, in an aggregate amount not to exceed at any time outstanding the greater of its (a) $20,000,000 and (b) 5% of the aggregate net book value of the Aircraft owned by the Borrower and the Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06Subsidiaries;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(lh) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or (i) 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 businessbusiness or (ii) in respect of netting services, so long as automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts; provided, that such Indebtedness is extinguished within 10 five Business Days of its incurrence;
(mi) Indebtedness arising in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater connection with endorsement of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, instruments for deposit in the ordinary course of business;
(oj) Refinancing Indebtedness with respect to Indebtedness incurred pursuant to clause (c) above or this clause (j);
(k) Indebtedness incurred by Foreign Subsidiaries in an aggregate principal amount not to exceed $15,000,000 as long as (i) no Loan Parties (A) provides any Guarantee or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (B) is directly or indirectly liable (as a guarantor or otherwise) for such Indebtedness; (ii) the Borrower or incurrence of which will not result in any recourse against any of the assets of any Loan Party and (iii) no default with respect to which would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of any Loan Party to declare pursuant to the express terms governing such Indebtedness a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Restricted Subsidiaries stated maturity;
(l) Indebtedness issued to insurance companies, or their affiliates, to finance insurance premiums payable to such insurance companies in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created connection with insurance policies purchased by a Loan Party in the ordinary course of business;
(m) Junior Indebtedness to the extent that, including at the time such Indebtedness is incurred, the Consolidated Net Total Leverage Ratio determined on a pro forma basis giving effect to such incurrence and the application of the proceeds thereof, would not exceed 3.50 to 1.0;
(n) Indebtedness of the Borrower or any Restricted Subsidiary (other than the HNZ Group) in an aggregate amount not to exceed $25,000,000 in aggregate principal amount at any time outstanding;
(i) Indebtedness (in the form of (x) one or more series of notes which may be unsecured or secured on a junior Lien basis with the Loans or (y) one or more series of loans which may be unsecured or secured on a junior Lien basis with respect to the Loans) incurred by the Borrower at any time in an aggregate principal amount not exceeding the sum of (1) the Incremental Amount available at such time plus (2) any amounts so long as immediately after giving effect to the establishment of such Indebtedness utilizing this clause (2) and the use of proceeds of the Indebtedness thereunder, the pro forma Consolidated Net Total Leverage Ratio is not greater than 2.00 to 1.00; provided that (A) for purposes of the foregoing clause (2), the Net Proceeds of such Indebtedness shall not be netted for purposes of such calculation of the Consolidated Net Total Leverage Ratio, (B) amounts may be established or incurred utilizing clause (2) above prior to utilizing clause (1) above (it being understood that any portion of any Indebtedness incurred in reliance on clause (1) may be reclassified, as the Borrower may elect from time to time, as incurred under clause (2) if the Borrower meets the applicable leverage ratio under clause (2) at such time on a pro forma basis, (C) such Indebtedness shall not mature or have any scheduled amortization and is not subject to mandatory redemption, repurchase, prepayment or sinking fund obligation prior to the date that is 91 days after the Latest Maturity Date at the time such Indebtedness is incurred (other than customary offers to repurchase upon a change of control, asset sale or casualty event and customary acceleration rights after an event of default), (D) as of the date of the incurrence of such Indebtedness, the weighted average life to maturity of such Indebtedness shall not be shorter than that of the Loans, (E) no Restricted Subsidiary is a guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Guarantor, (F) if secured, such Indebtedness shall not be secured by any Liens on any property or assets that are not part of the Collateral, (G) if secured or subordinated to the Obligations, such Indebtedness shall be subject to an intercreditor or subordination agreement (as applicable) in form and substance reasonably satisfactory to the Administrative Agent and Collateral Agent, (H) all other terms and conditions of such Indebtedness (excluding pricing, fees, rate floors and optional prepayment or redemption terms) shall be substantially identical to, or not materially more favorable, taken as a whole, (as reasonably determined by the Borrower) to the lenders or holders providing such Incremental Equivalent Debt than, the terms applicable to the existing Loans unless such more favorable terms are also added to the Loan Documents for the benefit of the Lenders (except for covenants or other provisions applicable only to periods after the Maturity Date, it being understood that to the extent that any financial maintenance covenant is added for the benefit of any Incremental Equivalent Debt, no consent from the Administrative Agent or any Lender shall be required to the extent that such covenant shall also apply for the benefit of the Loans), except, in the case of Incremental Equivalent Debt in the form of notes, such terms and conditions reflect market terms and conditions at the time of such incurrence or issuance (as reasonably determined by the Borrower), (I) if secured on a pari passu basis with the Loans, if the initial yield on such Indebtedness (as determined by the Administrative Agent to be equal to the sum of (x) the margin above the Adjusted LIBO Rate on such Indebtedness and (y) if such Indebtedness is incurred at a discount or the Lenders making the same receive a fee directly or indirectly from the Borrower or any Subsidiary for providing such Indebtedness, the amount of such OID divided by the lesser of (1) the average life to maturity of such Indebtedness and (2) four) exceeds the applicable margin then in effect for Eurocurrency Loans by more than 50 basis points, then the applicable margin then in effect for Loans shall automatically be increased by such excess, effective upon the incurrence of such Indebtedness; provided that, to the extent any portion of the Yield Differential is attributable to a higher “LIBOR floor” being applicable to such Indebtedness, such floor shall only be included in the calculation of the Yield Differential to the extent such floor is greater than the higher of the Adjusted LIBO Rate in effect for an Interest Period of three months’ duration at such time and the “LIBOR floor” applicable to the initial Loans, and, with respect to such excess, the “LIBOR floor” applicable to the outstanding Loans shall be increased to an amount not to exceed the “LIBOR floor” applicable to such Indebtedness prior to any increase in the applicable margin applicable to such Loans then outstanding, (J) immediately prior to and after the incurrence of any Incremental Equivalent Debt, no Default or Event of Default shall have occurred and be continuing, and (K) the proceeds of such Incremental Equivalent Debt shall be used solely for the purposes permitted for Incremental Loans set forth in Section 5.11 (such Indebtedness incurred pursuant to this clause (i) being referred to as “Incremental Equivalent Debt”) and (ii) any Refinancing Indebtedness 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 such Incremental Equivalent Debt which itself would be permitted pursuant to reimbursement-type obligations regarding workers compensation claimsthis Section 6.01;
(p) obligations Attributable Indebtedness in respect of performance, bid, appeal connection with Sale and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder Leaseback Transactions in an aggregate amount at any time outstanding not to exceed $5,000,000;
(rq) Guarantees of Indebtedness supported of a partnership or joint venture (other than an Unrestricted Subsidiary) by a Letter of Creditthe Borrower or any Guarantor provided that (x) such guarantee is unsecured, in a principal amount not to exceed the face amount of (y) such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, guarantee does not exceed the greater proportion of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) such Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) equal to the Borrower’s or Guarantor’s proportionate equity ownership of such partnership or joint venture and (dz) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall at any time outstanding does not exceed an amount so long as on and as $5,000,000 outstanding; and
(r) unsecured Indebtedness of the date of such incurrence Borrower or any Restricted Subsidiary (other than the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(iHNZ Group) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior credit card agreements in an aggregate amount not to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount $3,000,000 at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtednesstime.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Term Loan Credit Agreement (PHI Group, Inc./De), Term Loan Credit Agreement (Phi Inc)
Indebtedness. CreateThe Company will not, and will not permit any Subsidiary to, create, issue, incur, assume assume, become liable in respect of or suffer to exist any Indebtedness, exceptexist:
(a) any Indebtedness pursuant to any Receivables Transaction, except for Indebtedness pursuant to a Receivables Transaction that is (i) nonrecourse with respect to the Company and its Subsidiaries (other than any Receivables Subsidiary and to any Equity Interests of such Receivables Subsidiary (and the proceeds thereof)) and (ii) in an aggregate principal amount at the most recent date on which any such Indebtedness is incurred not exceeding 15% of Consolidated Total Assets as of the last day of the then most recently ended fiscal quarter of the Company immediately on or prior to such incurrence date; or
(b) any Indebtedness of any Loan Party under of the Loan Documents Subsidiaries other than:
(including i) Indebtedness of any Indebtedness incurred Receivables Subsidiary pursuant to any Receivables Transaction permitted under Section 2.14 or 2.1510.6(a);
(bii) (x) any Indebtedness outstanding of any Subsidiary existing on the Closing Restatement Date and listed set forth on Schedule 7.03(b) 10.6 and any Permitted Refinancing refinancing thereof; provided that the then outstanding principal amount thereof is not increased and the weighted average maturity thereof is not decreased;
(yiii) intercompany any Indebtedness outstanding on of any Subsidiary which is a Subsidiary Guarantor, so long as such Subsidiary has complied with the Closing Date and requirements of Section 9.8 in respect of its Subsidiary Guarantee;
(iv) any Permitted Refinancing thereofIndebtedness of any Subsidiary owed to the Company or any other Subsidiary; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party Guarantor shall only be permitted pursuant to this Section 10.6(b)(iv) to the extent constituting an Investment permitted by owed to the Company or another Subsidiary Guarantor;
(v) any Indebtedness arising in respect of Capital Leases or purchase money obligations incurred in accordance with Section 7.02(c)(iii10.5(f);
(dvi) any other Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)Subsidiaries; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to not at the Administrative Agent in accordance with the terms of the Security Agreement and (y) all most recent date on which any such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset was incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and 600,000,000 or (y) 1510% of Consolidated EBITDA Total Assets as of the Borrower determined at last day of the time then most recently ended fiscal quarter of the Company immediately on or prior to such incurrence on a Pro Forma Basisdate;
(hvii) Indebtedness representing deferred compensation to employees of Holdings or any Subsidiary of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness Company in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in connection with deposit accounts in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;; and
(mviii) Indebtedness any Guarantee Obligation of the Company in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater respect of $22,750,000 and 35% of Consolidated EBITDA;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect Subsidiary under clause (vii) hereof up to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount 300,000,000 at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtednessoutstanding.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Master Note Purchase Agreement, Master Note Purchase Agreement (Henry Schein Inc)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) in Section 7.03 of the Confidential Disclosure Letter and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof, of which any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that any all such intercompany Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing Guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, herein and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the an Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of $13,000,000 50,000,000 and 202.00% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Total Assets, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunderAcquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or Acquisition, and any Permitted Refinancing thereof or (ii) thereof; provided further that, after giving Pro Forma Effect pro forma effect to such Permitted Acquisition and the incurrence assumption of such Indebtedness, as applicable, the aggregate amount of such Indebtedness does not exceed (x) $35,000,000 at any time outstanding does not exceed plus (y) any additional amount of such Indebtedness so long as the sum of (x) Total Leverage Ratio is no greater than 5.85:1.00 and, if such Indebtedness is secured, the Secured Leverage Ratio is no greater of $16,250,000 and 25% of Consolidated EBITDA (than 4.00:1.00, in each case determined on a Pro Forma Basis Basis; provided that in accordance with Section 1.09) plus the case of clause (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio ), any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(s), does not exceed in the aggregate at any time outstanding the greater than 4.25:1:00of $50,000,000 and 2.00% of Total Assets, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 125,000,000 and 355.00% of Consolidated EBITDATotal Assets;
(n) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters Indebtedness in respect of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
the 2020 Notes and the 2021 Notes (r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)including, in each case determined at case, any guarantees by the time of incurrence;
(tGuarantors thereof) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09)and, in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loanscase, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)Refinancing thereof;
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Credit Agreement (Prestige Brands Holdings, Inc.), Form 8 K
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) The Parent shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness of any Loan Party under the Loan Documents (including Acquired Debt); provided, however, that the Parent and any of its Restricted Subsidiaries may Incur Indebtedness incurred pursuant (including Acquired Debt) if the Fixed Charge Coverage Ratio of the Parent and its Restricted Subsidiaries (on a consolidated basis) for the Parent’s most recently ended four full Fiscal Quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred would have been at least 2.0 to Section 2.14 or 2.151.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom);, as if the additional Indebtedness had been Incurred at the beginning of such four-quarter period.
(b) (xSection 7.3(a) Indebtedness outstanding on shall not prohibit the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness Incurrence of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to of the Obligations pursuant to the Intercompany Note;following items (collectively, “Permitted Debt”):
(ci) Guarantees the Incurrence by the Parent, the Borrower and any Restricted of the Subsidiary Guarantors of Indebtedness (and Guaranties in respect of Indebtedness of of) under the Borrower Senior Credit Facilities and under one or any Restricted Subsidiary otherwise permitted hereunder; provided that more other Debt Facilities (Aeach, an “Incremental Facility”) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate principal amount at any one time outstanding under this Section 7.3(b)(i) not to exceed the greater of (i) $13,000,000 1,650,000.000 and 20(ii) the sum of $500,000,000 and 25% of the Parent’s Consolidated EBITDA Tangible Assets; provided that each term loan Incremental Facility (determined on each an “Incremental Term Facility”) shall be a Pro Forma Basis Permitted Incremental Facility;
(ii) the Incurrence by the Parent and its Restricted Subsidiaries of the Existing Indebtedness;
(iii) the Incurrence of Indebtedness represented by the Senior Notes and any Guaranties of such Indebtedness by the Borrower or a Subsidiary Guarantor;
(iv) the Incurrence by the Parent or any of its Restricted Subsidiaries of Indebtedness represented by Capitalized Lease Obligations, mortgage financings, industrial revenue bonds, purchase money obligations or other Indebtedness, in accordance with Section 1.09)each case, Incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Parent or any of its Restricted Subsidiaries, in each case determined at whether through the time direct purchase of incurrence such assets or through the purchase of Equity Interests of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness Incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (together with any Permitted Refinancings thereofiv), not to exceed the greater of (i) at any time outstanding $300,000,000 and (ii) Attributable Indebtedness arising out 10% of sale-leaseback transactions permitted by Section 7.05(m) and the Parent’s Consolidated Tangible Assets at any Permitted Refinancing of such Attributable Indebtednesstime outstanding;
(fv) the Incurrence by the Parent or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in respect exchange for, or the net proceeds of Swap Contracts designed which are used to hedge against renew, refund, refinance, replace, defease or discharge, in whole or in part, any Indebtedness (other than intercompany Indebtedness) that was permitted to be Incurred under Section 7.3(a) or Section 7.3(b)(ii), (iii), this clause (v) or (x);
(vi) the Borrower’s Incurrence by the Parent or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Parent and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Borrower is the obligor on such Indebtedness and the payee is not a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Term Loan Obligations then due;
(B) if a Guarantor is the obligor on such Indebtedness and the payee is not the Borrower or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Term Loan Obligations then due; and
(C) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being beneficially held by a Person other than the Parent or a Restricted Subsidiary of the Parent or (2) any sale or other transfer of any such Indebtedness to a Person that is not either the Parent or a Restricted Subsidiary of the Parent will be deemed, in each case, to constitute an Incurrence (as of the date of such issuance, sale or transfer) of such Indebtedness by the Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this Section 7.3(b)(vi);
(vii) the issuance by any of the Parent’s exposure Restricted Subsidiaries to interest ratesthe Parent or to any of its Restricted Subsidiaries of shares of Preferred Stock; provided, foreign exchange rates however, that:
(A) any subsequent issuance or commodities pricing risks incurred transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Parent or a Restricted Subsidiary of the Parent; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Parent or a Restricted Subsidiary of the Parent, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this Section 7.3(b)(vii);
(viii) the Incurrence by the Parent or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that purposes;
(ix) any such Guarantees by Loan Parties Guaranty of such Indebtedness of the Parent or a Restricted Subsidiaries that are not Loan Parties shall only be permitted Subsidiary to the extent constituting an Investment that the Guarantied Indebtedness was permitted to be incurred by another provision of this Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; 7.3, provided that (i) solely in if the case of assumed IndebtednessIndebtedness being Guarantied is subordinated or pari passu with the Term Loan Obligations, any such Indebtedness is not incurred in contemplation of such Permitted Acquisition Guaranty must be subordinated or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtednesspari passu, as applicable, to the aggregate amount of such same extent as the Indebtedness at any time outstanding does not exceed the sum of Guarantied;
(x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma BasisPermitted Acquisition Indebtedness;
(hxi) Indebtedness representing deferred in respect of workers’ compensation claims, public liability insurance, unemployment insurance, property, casualty or liability insurance, self-insurance obligations or completion, performance, bid performance, appeal or surety bonds in the ordinary course of business, including Guaranties (not for borrowed money) or obligations with respect to employees letters of Holdings credit supporting such workers’ compensation claims, public liability insurance, unemployment insurance, property, casualty or liability insurance, self-insurance obligations or completion, performance, bid performance, appeal or surety bonds;
(xii) the Incurrence by the Parent or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or 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, so long as provided, however, that such Indebtedness is extinguished within 10 five Business Days of its incurrenceIncurrence;
(mxiii) Indebtedness in an aggregate principal amount that at of the time of, and after giving effect to, the incurrence thereof, would not exceed the greater Parent or any of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness its Restricted Subsidiaries 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 businesspremiums;
(oxiv) Indebtedness incurred by of the Borrower Parent or any of its Restricted Subsidiaries in respect of letters of creditTreasury Management Arrangements, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created 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;; and
(pxv) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided the Incurrence by the Borrower Parent or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder additional Indebtedness in an aggregate principal amount at any time outstanding not outstanding, including all Permitted Refinancing Indebtedness Incurred to exceed $5,000,000;
renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (r) Indebtedness supported by a Letter of Creditxv), in a principal amount not to exceed the face amount greater of (A) $150,000,000 and (B) 5.0% of the Parent’s Consolidated Tangible Assets determined as of the date of such Letter of Credit;Incurrence.
(sc) For purposes of determining compliance with this Section 7.3, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt described in Sections 7.3(b)(i) through (xv) above, or is entitled to be Incurred pursuant to Section 7.3(a), the Parent will be permitted to divide and classify such item of Indebtedness, Disqualified Stock or Preferred Stock, as applicable, on the date of its Incurrence, or later re-divide and reclassify all or a portion of such item of Indebtedness, Disqualified Stock or Preferred Stock, as applicable, in any manner that complies with this Section 7.3. Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party whichunder Debt Facilities (including the Senior Credit Facilities, when aggregated but excluding the Senior Notes and any Guaranties of Indebtedness under the Senior Notes) outstanding on the Funding Date will be deemed to have been Incurred on such date in reliance of Section 7.3(b)(i) and not Section 7.3(a) or Section 7.3(b)(ii), and may not later be reclassified. The accrual of interest or Preferred Stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the principal amount same terms, the reclassification of all other Preferred Stock as Indebtedness incurred pursuant due to a change in accounting principles, and the payment of dividends on Preferred Stock or Disqualified Stock in the form of additional shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an Incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)7.3; provided, in each case determined at such case, that the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred amount thereof is included in reliance on the Cumulative Credit;
(v) Indebtedness Fixed Charges of the Borrower Parent as accrued. Further, the reclassification of any lease or other liability of the Parent or any of its Restricted Subsidiaries as Indebtedness due to a change of accounting principles after the Funding Date will not be deemed an Incurrence of Indebtedness for purposes of this covenant. In addition, for purposes of determining any particular amount of Indebtedness under this covenant, Guaranties or Liens supporting Indebtedness otherwise included in the determination of such particular amount shall not be included so long as incurred by a Person that is a Loan Party that complies with clauses (a), (c) and could have Incurred such Indebtedness.
(d) (as applicable) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Applicable Requirements, so long as no Default or Event Incurrence of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency Exchange Rate in effect on the date such Indebtedness shall not exceed an amount so long as on and as was Incurred, in the case of term Indebtedness, or first committed, in the date case of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other InvestmentIndebtedness; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a term loan that is not subordinated foreign currency, and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency Exchange Rate in right of payment to the Loan Documents and that is secured by a Lien effect on the Collateral that ranks pari passu in right date of security with the Term Loanssuch refinancing, the Term Loans such U.S. dollar-dominated restriction shall be subject deemed not to have been exceeded so long as the “most favored nation” pricing adjustment (if applicable) set forth in principal amount of such refinancing Indebtedness does not exceed the proviso to Section 2.14(e)(iii) as if principal amount of such Indebtedness were an Incremental Term Loan incurred thereunderbeing refinanced. For purposes Notwithstanding any other provision of the calculations in this Section 7.03(v)7.3, (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder Indebtedness that the Parent or any Restricted Subsidiary may Incur pursuant to this Section 7.3 shall not be deemed to be exceeded solely as a result of fluctuations in Exchange Rates or currency values. The principal amount of any Permitted Refinancing Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be assumed and (B) calculated based on the currency Exchange Rate applicable to the extent currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the proceeds date of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtednessrefinancing.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Senior Secured Term Loan Agreement (Paragon Offshore PLC), Senior Secured Term Loan Agreement (Paragon Offshore Ltd.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)[reserved];
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany NoteSecured Obligations;
(c) Indebtedness (i) outstanding on the Closing Date; provided, that any such Indebtedness having an individual outstanding principal amount in excess of $10,000,000 shall be listed on Schedule 7.03 and (ii) any Specified Permitted Refinancing thereof;
(d) Guarantees by the Borrower and or any Restricted Subsidiary in respect of Indebtedness of the Borrower or any another Restricted Subsidiary otherwise permitted hereunder; provided provided, that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(de) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting that constitutes an Investment permitted by Section 7.02(c)(iii)7.02; provided provided, that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall must be unsecured and expressly subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Notesuch Loan Party, it being understood that such Loan Party may make payments thereon unless an Event of Default has occurred and is continuing;
(ef) [reserved];
(ig) Attributable Indebtedness of Foreign Subsidiaries that are Restricted Subsidiaries of the Borrower in an aggregate principal amount not to exceed the greater of (x) $65,000,000 and other (y) 50.0% of Consolidated EBITDA as of the last day of the most recently ended Test Period;
(h) Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred Persons that are acquired by the Borrower or any Restricted Subsidiary prior to or within 270 days after merged into the acquisitionBorrower or a Subsidiary in a Permitted Acquisition or other permitted Investment in accordance with the terms of this Agreement or that is assumed by the Borrower or any Subsidiary in connection with such Permitted Acquisition or other permitted Investment so long as the Borrower is in compliance, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance Basis, with Section 1.09), in each case determined at the time of incurrence 7.08(a) (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of assuming such Indebtedness of Restricted Subsidiaries is First Lien Debt); provided, that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basispermitted Investment;
(hi) Indebtedness incurred by the Borrower or any Restricted Subsidiary representing deferred compensation to employees of Holdings or any of its a Restricted Subsidiaries Company incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any Restricted Subsidiary to future, present or former directors, officers, members of management, employees or consultants of the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, heirs, family members, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06;
(jk) (i) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisitionconnection with the Transactions, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) any acquisition or other Investment permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Equity Interests or any other Investment, and (ii) Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar adjustmentsinstruments securing the performance of the Borrower or any such Restricted Subsidiary pursuant to any such agreement;
(kl) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries Subsidiary under deferred compensation or other similar arrangements (including seller notes) incurred by such Person in connection with Permitted Acquisitions or any other permitted Investment permitted hereunder;(including the Transactions); ▇▇▇▇:\98106221\28\78831.0005
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other connection with intercompany cash management arrangements and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds related activities in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness in connection with Cash Management Services;
(o) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations of the Borrower or any Restricted Subsidiary contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims[reserved];
(pq) obligations in respect of bid, performance, bidstay, customs, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretoSubsidiary, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Guarantees by the Loan Parties of Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Creditotherwise permitted under this Section 7.03;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with in respect of Swap Contracts entered into in the principal amount ordinary course of all other Indebtedness incurred pursuant to this Section 7.03(s) business and then outstanding not for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrencespeculative purposes;
(t) Credit Agreement Refinancing IndebtednessIndebtedness consisting of obligations owing under any customer or supplier incentive, supply, license or similar agreements entered into in the ordinary course of business;
(u) Indebtedness incurred customer deposits and advance payments received in reliance on the Cumulative Creditordinary course of business from customers for goods and services purchased in the ordinary course of business;
(v) Indebtedness in respect of Receivables Facility and any Specified Permitted Refinancing thereof;
(i) Attributable Indebtedness and purchase money obligations, in each case of the Borrower or any of its a Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred Subsidiary to finance a Limited Condition Transactionthe purchase, to Defaults repair or Events improvement of Default under Sections 8.01(a) and (f) and any other Default fixed or Event of Default capital assets within the limitations set forth in Section 7.01(p); provided, that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of all such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to clause (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(vw) shall not exceed the greater of (x) $9,750,000 65,000,000 and (y) 1550.0% of Consolidated EBITDA as of the last day of the most recently ended Test Period, and any Specified Permitted Refinancing of the Indebtedness referred to in this clause (i) and (ii) Indebtedness secured by ▇▇▇▇▇ permitted under Section 7.01(e), 7.01(f), or 7.01(r);
(i) other Indebtedness in an aggregate principal amount not to exceed the greater of (x) $97,500,000 and (y) 75.0% of Consolidated EBITDA as of the last day of the most recently ended Test Period and (ii) any Specified Permitted Refinancing thereof;
(y) Indebtedness of the Borrower and/or any Restricted Subsidiary incurred in connection with any Sale and Lease-Back Transaction permitted pursuant to Section 7.05;
(determined z) other Indebtedness (“Ratio Debt”):
(i) so long as on a Pro Forma Basis as of the most recently ended Test Period:
(A) in accordance with Section 1.09)the case any First Lien Debt, in each case determined at the time of incurrence and First Lien Leverage Ratio does not exceed 2.95:1.00,
(B) in the case of Junior Lien Debt, the Secured Leverage Ratio does not exceed 3.70:1.00; or
(C) in the case of Indebtedness that is not secured by the Collateral, the Total Leverage Ratio does not exceed 3.95:1.00; ▇▇▇▇:\98106221\28\78831.0005 provided that (I) if such Ratio Debt is issued or incurred by any Loan Party and consists of third party Indebtedness for borrowed money, other than with respect to (x) Customary Bridge Loans, (y) Customary Term A Loans, and/or (z) revolving loans and/or commitments, (X) the final maturity date of such Indebtedness is a term loan that is not subordinated in right of payment to no earlier than the Latest Term Loan Documents and that is secured by a Lien Maturity Date on the Collateral that ranks pari passu in right date of security with the issuance or incurrence thereof and (Y) the Weighted Average Life to Maturity applicable to such Indebtedness is no shorter than the Weighted Average Life to Maturity of the then-existing Term Loans, (II) notwithstanding the foregoing clause (I), the Loan Parties may incur Ratio Debt that is otherwise subject to clause (I) above and has (x) a final maturity date that is earlier than the Latest Term Loan Maturity Date and/or (y) a Weighted Average Life to Maturity that is shorter than the Weighted Average Life to Maturity of the then-existing Term Loans shall be subject in an aggregate outstanding principal amount not to exceed the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v)Inside Maturity Amount, (AIII) with respect to any Revolving Credit CommitmentsRatio Debt that constitutes MFN Indebtedness, a borrowing the Initial Term Loans shall benefit from the MFN Provision and (IV) the aggregate outstanding principal amount of Ratio Debt incurred by Restricted Subsidiaries that are not Loan Parties in reliance on this Section 7.03(z) shall not, at any time, exceed an amount equal to the greater of $65,000,000 and 50.0% of Consolidated EBITDA as of the maximum amount last day of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.most recently ended Test Period; and
(wii) Any any Specified Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)Refinancing thereof;
(xaa) all premiums (if any), interest (including post-petition interest), fees, expenses, charges Incremental Equivalent Debt and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w)any Specified Permitted Refinancing thereof;
Appears in 2 contracts
Sources: Credit and Guaranty Agreement (System1, Inc.), Credit and Guaranty Agreement (System1, Inc.)
Indebtedness. CreateBorrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer guaranty or otherwise become or remain directly or indirectly liable with respect to exist any IndebtednessIndebtedness for borrowed money (including in the form of Disqualified Stock), exceptexcept for:
(a) Permitted Debt of a Loan Party and any Guarantees of a Loan Party in respect thereof; provided that any Permitted Debt shall (i) not be secured other than as permitted by clause (1) of the definition of Permitted Liens and (ii) not be subject to or benefit from any Guarantee by any Person that does not also Guarantee the Obligations; provided, further, that any Permitted Debt (other than any EETC Obligations, which may be senior or superpriority in right of payments from the EETC Collateral to the Obligations) shall be pari passu in right of payment with the Obligations;
(b) Junior Lien Indebtedness of the Loan Parties and any Guarantees of a Loan Party under in respect thereof; provided that either (i) such Junior Lien Indebtedness is Permitted Refinancing Indebtedness in respect of Permitted Debt, (ii) the Loan Documents aggregate amount of any such Junior Lien Indebtedness shall not exceed an aggregate principal amount of $5 million at any time outstanding or (including iii) such Junior Lien Indebtedness is Permitted Refinancing Indebtedness in respect of any Indebtedness incurred pursuant to Section 2.14 clause (i) or 2.15);
(bii) above (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and or any successive Permitted Refinancing thereof and Indebtedness); provided, further, that any Junior Lien Indebtedness shall not be secured other than as permitted by clause (y2) intercompany Indebtedness outstanding on of the Closing Date and any definition of Permitted Refinancing thereofLiens; provided further that any in the event such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loans, then the related Guarantee shall be subordinated in right of payment to the Loans or the Guarantees guaranteeing the Loans, as the case may be;
(c) [reserved];
(d) unsecured Indebtedness of the Loan Documents and Parties that is secured Permitted Refinancing Indebtedness in respect of either Permitted Debt or Junior Lien Indebtedness (or any successive Permitted Refinancing Indebtedness) and any Guarantees of a Loan Party in respect of any of the foregoing; provided that (i) such Indebtedness shall not be subject to or benefit from any Guarantee by a Lien on any Person that does not also Guarantee the Collateral that ranks Obligations, (ii) such Indebtedness shall be pari passu in right of security payment with the Term Obligations or subordinated in right of payment with the Obligations, with any such subordinated obligation on terms reasonably satisfactory to the Administrative Agent and (iii) in the event such Indebtedness being Guaranteed is subordinated in right of payment to the Loans, then the Term Loans related Guarantee shall be subject subordinated in right of payment to the “most favored nation” pricing adjustment (if applicable) set forth in Loans or the proviso to Section 2.14(e)(iii) Guarantees guaranteeing the Loans, as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)case may be;
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Credit Agreement (Wheels Up Experience Inc.), Credit Agreement (Wheels Up Experience Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) the Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness of any Loan Party under the Loan Documents (including Acquired Indebtedness) or issue any Indebtedness incurred pursuant shares of Disqualified Stock and the Borrower will not permit any of its Restricted Subsidiaries to Section 2.14 or 2.15);
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and issue any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofshares of Preferred Stock; provided provided, however, that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in respect of Indebtedness each case if the Fixed Charge Coverage Ratio of the Borrower and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing such Disqualified Stock or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall Preferred Stock is issued would have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms been at least as favorable (as reasonably determined by the Borrower) 2.00 to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (1.00 determined on a Pro Forma Basis in accordance with Section 1.09(including a pro forma application of the net proceeds therefrom), in each as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case determined may be, and the application of proceeds therefrom had occurred at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing beginning of such Attributable four-quarter period; provided, further, that the aggregate amount of Indebtedness (including Acquired Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed that may be Incurred and Disqualified Stock or Preferred Stock that may be issued pursuant to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees foregoing by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness Guarantors of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) Loans shall not exceed the greater of (x) $9,750,000 500,000,000 and (y) 1526.0% of Four Quarter Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officersIncurrence, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any one time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Creditoutstanding, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis (such Indebtedness Incurred and Disqualified Stock and Preferred Stock issued, “Ratio Debt”).
(b) In addition, the following shall be permitted (collectively, the “Permitted Debt”):
(1) the Incurrence by the Borrower or its Restricted Subsidiaries of (i) (x) Indebtedness arising under the Loan Documents including any refinancing thereof in accordance with Section 1.09)2.19, in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(vy) Indebtedness of the Borrower Loan Parties evidenced by Refinancing Notes and any Permitted Refinancing thereof (or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (csuccessive Permitted Refinancings thereof) and (dz) (as applicable) Indebtedness of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) Loan Parties evidenced by Incremental Equivalent Debt and any other Default Permitted Refinancing thereof (or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligationssuccessive Permitted Refinancings thereof), the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on the ABL Credit Agreement and Guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) equal to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (Iface amount thereof) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior up to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the an aggregate principal amount of such Indebtedness shall not to exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any one time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed outstanding, the greater of (x) $9,750,000 1,400,000,000 and (y) 15% of Consolidated EBITDA the Borrowing Base as of the date of such Incurrence;
(2) the Incurrence by the Borrower and the Guarantors of Indebtedness represented by (determined on a Pro Forma Basis in accordance with Section 1.09)A) the Closing Date Senior Secured Notes and the Guarantees thereof, in each case determined at the time of incurrence as applicable (and any exchange notes and Guarantees thereof) and (B) provided that if such Indebtedness is a term loan that is not subordinated the Senior Notes (other than the Closing Date Senior Secured Notes), and in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loanseach case, the Term Loans shall be subject to the “most favored nation” pricing adjustment Guarantees thereof, as applicable (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to and any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed exchange notes and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(vGuarantees thereof);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Credit Agreement (CommScope Holding Company, Inc.), Term Loan Credit Agreement (CommScope Holding Company, Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, exceptother than:
(a) Indebtedness of any Loan Party the Parent Borrower and the Restricted Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding existing on the Specified Date; provided that any Indebtedness (other than Indebtedness refinanced on the Closing Date and listed in connection with the Transactions) that is in excess of (x) $5,000,000 individually or (y) $10,000,000 in the aggregate (when taken together with all other Indebtedness outstanding in reliance on this clause (b) that is not set forth on Schedule 7.03(b)) shall only be permitted under this clause (b) to the extent that such Indebtedness is set forth on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date hereof and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness (other than the Parent Borrower Obligor Cash Management Note) of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an intercompany note reasonably satisfactory to the Intercompany NoteAdministrative Agent;
(c) Guarantees by the Parent Borrower and or any of its Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee Guaranty of the Obligations substantially on the terms set forth herein, in the Guaranty and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee Guaranty shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness; provided that, in any event, any Guaranty of the New Senior Notes or Permitted Additional Notes shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the New Senior Notes Indenture on the Closing Date;
(Cd) any Guarantee by a Loan Party of Indebtedness of a the Parent Borrower or any of its Restricted Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party (other than the Parent Borrower Obligor Cash Management Note) shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with an intercompany note reasonably satisfactory to the terms of the Intercompany NoteAdministrative Agent;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and construction, repair, replacement or improvement, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(mtransactions, and (iii) Indebtedness arising under Capitalized Leases other than those in effect on the Specified Date or entered into pursuant to subclauses (i) and (ii) of this clause (e) and, in the case of clauses (i), (ii) and (iii), any Permitted Refinancing thereof; provided that not more than $150,000,000 in aggregate principal amount of such Attributable IndebtednessIndebtedness incurred pursuant to this paragraph (e) shall be outstanding at any time;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) [Reserved]
(h) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; Acquisition: provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such acquisition, and any Permitted Acquisition or other Investment or Refinancing of any of the foregoing and so long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding pursuant to this paragraph (h) does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00250,000,000, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(hi) [Reserved];
(j) Indebtedness representing deferred compensation to employees of Holdings the Parent Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(ik) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses Controlled Investment Affiliates or former spouses Immediate Family Members to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.06;
(jl) Indebtedness incurred by Holdings arising from agreements of the Parent Borrower or any a Restricted Subsidiary providing for indemnification, adjustment of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger purchase price or any Disposition permitted hereundersimilar obligations, in each case, constituting indemnification incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business or assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that such Indebtedness is not reflected on the balance sheet (other than by application of FASB Interpretation No. 45 as a result of an amendment to an obligation in existence on the Closing Date) of the Parent Borrower or any Restricted Subsidiary (contingent obligations or obligations referred to in respect a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of purchase price this clause (including earn-outs) or other similar adjustmentsl));
(km) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder[Reserved];
(ln) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(mo) Indebtedness in an aggregate principal amount that at the any time of, and after giving effect to, the incurrence thereof, would outstanding not to exceed the greater of $22,750,000 and 35% of Consolidated EBITDA1,000,000,000;
(np) 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;
(oq) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of businessbusiness or consistent with past practice, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pr) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qs) letters Indebtedness of credit issued in currencies not available hereunder CCOH and its Restricted Subsidiaries, the proceeds of which are solely used to refinance the CCU Term Note, provided that the Net Cash Proceeds from such repayment is applied to prepay the CF Facilities to the extent required by the CF Credit Agreement.
(t) Indebtedness under the CF Facilities and any Permitted Refinancing thereof in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face aggregate principal amount of such Letter of Creditcommitment under the CF Facilities on the Closing date plus any Incremental Loans (as defined under the CF Facilities);
(si) Indebtedness incurred and Guarantees by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with Guarantors in respect of the New Senior Notes in an aggregate principal amount of all other Indebtedness incurred pursuant not to this Section 7.03(sexceed $2,310,000,000 plus the PIK Interest Amount and (ii) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement any Permitted Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Creditthereof;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence[Reserved];
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w(u) above and (x) through (aa) below;
(x) Guarantees incurred in the ordinary course of business in respect of obligations not constituting Indebtedness to suppliers, customers, franchisees, lessors and licensees;
(y) Indebtedness incurred in the ordinary course of business in respect of obligations of the Parent Borrower or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services;
(z) Indebtedness in respect of (i) Permitted Additional Notes provided the Net Cash Proceeds therefrom are immediately after the receipt thereof, used to prepay the CF Facilities to the extent required by the CF Credit Agreement and (ii) any Permitted Refinancing of the foregoing;
(aa) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(bb) Indebtedness consisting of obligations of the Parent Borrower and its Restricted Subsidiaries under deferred compensation to employees or other similar arrangements incurred by such Person in connection with the Transactions, any Permitted Acquisition or any other Investment expressly permitted hereunder;
(cc) Indebtedness incurred by a Securitization Entity in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to Holdings or any of its Subsidiaries or the Parent Borrower or any of its Subsidiaries (other than another Securitization Entity);; and
(dd) Indebtedness of any Non-Loan Party that is a Restricted Subsidiary in an amount not to exceed $400,000,000 at any one time outstanding. Notwithstanding the foregoing, no Restricted Subsidiary that is not a Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Subsidiary Guarantor. In addition, notwithstanding the foregoing, (i) Restricted Subsidiaries that are not Loan Parties may not incur Indebtedness pursuant to, without duplication, the first paragraph of this Section and clauses (g), (h) and (o) of this Section in an aggregate combined principal amount at any time outstanding in excess of $500,000,000 in each case determined at the time of incurrence and (ii) until the Existing Notes Condition shall have been satisfied, (A) the Parent Borrower shall not, and shall not permit any Restricted Subsidiary to, create, incur, assume or suffer to exist any Guarantee of the Existing Notes and (B) all Indebtedness owed to the Parent Borrower by any Subsidiary Guarantor (other than the Parent Borrower Obligor Cash Management Note) shall be unsecured and subordinated to the Obligations pursuant to an intercompany note reasonably satisfactory to the Administrative Agent. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased plus the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Parent Borrower dated such date prepared in accordance with GAAP.
Appears in 2 contracts
Sources: Credit Agreement (CC Media Holdings Inc), Credit Agreement (C C Media Holdings Inc)
Indebtedness. Create, incur, assume or assume, guarantee, suffer to exist or otherwise become liable with respect to any Indebtedness, except:except (Indebtedness described below is herein referred to as “Permitted Indebtedness”):
(a) Indebtedness obligations (contingent or otherwise) of the Borrower or any Loan Party of the Restricted Subsidiaries existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the Loan Documents 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 (including ii) such Swap Contract does not contain any Indebtedness incurred pursuant provision exonerating the counterparty to Section 2.14 such Swap Contract from its obligation to make payments on outstanding transactions to the Borrower or 2.15the Restricted Subsidiaries (notwithstanding that the Borrower or a Restricted Subsidiary is the defaulting party);
(b) (xi) Indebtedness outstanding on of a Restricted Subsidiary of the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof Borrower owed to the Borrower or to another Restricted Subsidiary of the Borrower and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party the Borrower owed to any Restricted Subsidiary that is not Subsidiaries of the Borrower, in each case, which Indebtedness shall (A) in the case of Indebtedness owed to a Loan Party shall Party, constitute “Pledged Debt” under the Security Agreement, (B) be unsecured and subordinated on terms (including subordination terms, if owed by a Loan Party) acceptable to the Obligations pursuant to Administrative Agent and (C) be otherwise permitted under the Intercompany Noteprovisions of Section 7.03;
(c) Guarantees by Indebtedness under the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Documents;
(d) Indebtedness of the Borrower or Loan Parties under the Term Facility and any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary Permitted Refinancing Indebtedness in respect thereof (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness including Guarantees of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms Guarantor in respect of the Intercompany Note;
(esuch Indebtedness) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater sum of (i) $13,000,000 275.0 million and 20% of Consolidated EBITDA (determined ii) provided that the Borrower is in compliance on a Pro Forma Basis with the covenant set forth in accordance Section 7.15 of the Term Loan Credit Agreement (as such Term Loan Credit Agreement including, without limitation, all relevant definitions required to determine compliance with Section 1.09such covenant, is in effect on the Closing Date), in each case determined at up to an additional $50.0 million.
(e) Indebtedness outstanding on the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding date hereof and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) listed on Schedule 7.02 and any Permitted Refinancing of such Attributable IndebtednessIndebtedness in respect thereof;
(f) Indebtedness Guarantees of the Borrower or any Guarantor in respect of Swap Contracts designed to hedge against Indebtedness otherwise permitted hereunder of the Borrower’s Borrower or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Subsidiary Guarantor;
(g) Indebtedness in respect of Capital Lease Obligations, Synthetic Lease Obligations, and purchase money obligations for fixed or capital assets within the Borrower or any Restricted Subsidiary assumed or incurred limitations set forth in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (iSection 7.01(i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any and Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such IndebtednessIndebtedness in respect thereof; provided, as applicablehowever, that the aggregate amount of all such Indebtedness at any one time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis35.0 million;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Credit Agreement (Container Store Group, Inc.), Credit Agreement (Container Store Group, Inc.)
Indebtedness. Create(a) The Company will not permit any Subsidiary to be liable for the Senior Notes or any other Material Indebtedness (other than (x) Indebtedness referred to in clauses (i) and (ii) of paragraph (b) below, (y) Guarantees by Foreign Subsidiaries of Material Indebtedness of other Foreign Subsidiaries and (z) Material Indebtedness of Foreign Subsidiaries that is not Guaranteed by any Domestic Subsidiary), whether as a primary obligor or under any Guarantee, unless such Subsidiary (i) shall be a party to and a Guarantor under the Guarantee Agreement or (ii) if the Guarantee Agreement shall have been terminated as provided in Section 11.16, shall have executed and delivered a Guarantee of the Obligations satisfactory in form and substance to the Administrative Agent. The Company will not permit any such Material Indebtedness to contain any provision requiring, contingently or otherwise, that any Subsidiary guarantee any obligations thereunder (other than any provision requiring Guarantees by Foreign Subsidiaries of Material Indebtedness of other Foreign Subsidiaries) unless this Agreement shall have been amended to incorporate such provision, mutatis mutandis, into the appropriate Article herein.
(b) The Company will not, and will not permit any Subsidiary to, enter into any inventory securitization transaction, or create, incur, assume or suffer permit to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15);
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted an Excluded Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;than:
(i) Indebtedness consisting of promissory notes issued by Holdings under the Existing Securitization or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06other Securitization;
(jii) Indebtedness incurred by Holdings or any of its Restricted Excluded Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;under this Agreement; and
(kiii) Indebtedness consisting of obligations of Holdings or Excluded Subsidiaries (other than any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(lSecuritization Entity) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of exceeding $22,750,000 and 35% of Consolidated EBITDA;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount 500,000,000 at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtednessoutstanding.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Credit Agreement (Amerisourcebergen Corp), Credit Agreement (Amerisourcebergen Corp)
Indebtedness. CreateThe Borrower will not, incur, assume or suffer and will not permit any Subsidiary of the Borrower to exist incur any additional Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding existing on the Closing Effective Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany NoteEffective Date;
(ci) Guarantees by the Borrower and any Restricted Subsidiary the Loan Parties in respect of Indebtedness of the Borrower or any Restricted Subsidiary of the Loan Parties otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations Subsidiary Guaranty on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness, (Cii) any Guarantee Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that would have been permitted as an Investment by such Loan Party in such Subsidiary under Section 9.14(c) and (iii) any Guaranty by a Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)in respect of Indebtedness of a Subsidiary that is not a Loan Party;
(d) Indebtedness of the Borrower or any Restricted Subsidiary of the Subsidiaries owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)9.14; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to a subordination agreement reasonably acceptable to the Obligations pursuant to subordination terms substantially consistent with Agent and the terms of the Intercompany NoteBorrower;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized LeasesLease Obligations) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after and the Subsidiaries financing the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset acquisition, construction, repair, replacement or improvement in an aggregate principal amount pursuant to this clause (e) not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness100,000;
(f) Indebtedness in respect of Swap Contracts swap contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of incurred by the Borrower or any Restricted Subsidiary assumed or incurred of the Subsidiaries in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment expressly permitted hereunder or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00Disposition, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kh) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person Obligations in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations cash management services and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(ni) 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;
(oj) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations Obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted the Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qk) Indebtedness in respect of letters of credit issued prior to the Effective Date for the account of any of the Subsidiaries of the Borrower to finance the purchase of inventory so long as (x) such Indebtedness is unsecured and (y) the aggregate principal amount of such Indebtedness does not exceed the amount outstanding on the Effective Date;
(l) Indebtedness (other than obligations in currencies not available hereunder respect of money borrowed) in an aggregate principal amount at any time outstanding not to exceed $5,000,000;1,500,000; and
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(xm) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(l) above.
Appears in 2 contracts
Sources: Secured Debtor in Possession Term Loan Credit Agreement (Office Properties Income Trust), Secured Debtor in Possession Term Loan Credit Agreement (Office Properties Income Trust)
Indebtedness. CreateThe Borrower will not, and will not permit any Subsidiary to, directly or indirectly, create, incur, assume assume, Guarantee, or suffer otherwise become directly or indirectly liable with respect to exist any IndebtednessIndebtedness except the following, exceptprovided that in each of the following cases, both prior to and immediately after giving effect to the creation, incurrence, assumption, or Guarantee thereof or the Borrower’s or such Subsidiary’s otherwise becoming directly or indirectly liable with respect thereto, no Default or Event of Default shall exist:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (x) Other Indebtedness outstanding existing on the Closing Date date hereof and listed on set forth in Schedule 7.03(b) 5.12 and any Permitted Refinancing thereof extensions, renewals, refinancings and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that replacements of any such intercompany Indebtedness that do not increase the outstanding principal amount thereof or result in an earlier maturity date or a decreased weighted average life thereof;
(i) Indebtedness of any Loan Party Subsidiary owed to any Restricted other Subsidiary that is not a Loan Party shall be unsecured and subordinated Wholly-Owned or to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and (ii) Indebtedness of the Borrower owed to any Restricted Subsidiary Subsidiary; provided that, in respect the case of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided Guarantor that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated not owed to the ObligationsBorrower or a Guarantor that is a Wholly-Owned Subsidiary, such Guarantee Indebtedness shall be subordinated to the Guarantee obligations of the Obligations Borrower or such Guarantor under the Loan Documents on terms at least as favorable reasonably satisfactory to the Administrative Agent; provided, further, that, with respect to any Restricted Period (as reasonably determined by defined below), the Borroweraggregate amount of Restricted Intercompany Indebtedness (as defined below) to the Lenders as those contained in the subordination of incurred during such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is period shall not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)exceed $50,000,000;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to the Insurance Subsidiary in an aggregate principal amount not to exceed $60,000,000 at any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent time outstanding; provided, that no more than $35,000,000 in principal amount of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall may be evidenced secured by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany NoteLiens permitted under Section 5.13(k);
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions in connection with Swap Agreements permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness5.25;
(f) Indebtedness Guarantees of the Borrower or any Subsidiary in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed otherwise permitted by this Section 5.12;
(g) unsecured Indebtedness of the Borrower or incurred any Subsidiary (in connection with addition to any Permitted Acquisition or of the other Investment not prohibited hereunder; provided that Indebtedness permitted by this Section 5.12), provided,
(i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, in compliance with the other provisions hereof (Bincluding the restrictions contained in Section 5.13 and 5.16);
(ii) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to is on terms no more restrictive than the terms contained in this Section 7.03(gAgreement; and
(iii) shall not exceed such Indebtedness matures within one year after the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of date on which it is initially incurred, or matures after the Borrower determined at the time of such incurrence on a Pro Forma BasisMaturity Date;
(h) Indebtedness representing deferred compensation to employees of Holdings any Foreign Subsidiary, Indebtedness in respect of Capital Leases, and purchase money Indebtedness for fixed or capital assets; provided that the aggregate principal amount of all such Indebtedness shall not exceed $100,000,000 at any of its Restricted Subsidiaries incurred in the ordinary course of businessone time outstanding;
(i) Indebtedness consisting outstanding on the date hereof issued pursuant to the Senior Note Purchase Agreements (but not including any extensions, renewals, refinancings or replacements of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;such Indebtedness); and
(j) additional unsecured Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any Subsidiary (including Guarantees of its Restricted Subsidiaries in respect Indebtedness of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or joint ventures and 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;
(pthird parties) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed $100,000,000 in the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party whichaggregate at any one time outstanding. Notwithstanding the foregoing, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower will not permit the Insurance Subsidiary to directly or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a)indirectly create, (c) and (d) (as applicable) of the Applicable Requirementsincur, so long as no Default assume, Guarantee, or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults otherwise become directly or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) indirectly liable with respect to any Revolving Credit Commitments, a borrowing Indebtedness except for liabilities arising in the ordinary course of business in connection with insurance and reinsurance policies it has entered into or may enter into in the maximum amount ordinary course of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtednessbusiness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Revolving Credit Facility Agreement (Lennox International Inc), Revolving Credit Facility Agreement (Lennox International Inc)
Indebtedness. CreateNo Credit Party shall, and no Credit Party shall suffer or permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower and any Loan Party of its Restricted Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 any amendment in connection with an Incremental Facility, any Extension or 2.15Extension Offer, any Permitted Repricing Amendment or any other amendment entered into from time to time in accordance with the terms hereof);
(b) [Reserved];
(xc) Indebtedness outstanding on as of the Closing Date and listed (provided, that, any Indebtedness in excess of $20,000,000 individually shall only be permitted to the extent such Indebtedness is set forth on Schedule 7.03(b5.3(c)) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(cd) Guarantees by Guarantee Obligations of the Borrower and any its Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any of its Restricted Subsidiary Subsidiaries otherwise permitted hereunderhereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 5.3(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 5.3); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth hereinthat, (B) if the Indebtedness being Guaranteed guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness;
(Ce) any Guarantee by a Loan Party of Indebtedness of a the Borrower or any of its Restricted Subsidiaries owing to the Borrower or any other Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)5.2; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Credit Party owed to any Restricted Subsidiary Person that is not a Loan Credit Party shall be unsecured and subordinated to the Obligations pursuant subject to subordination terms substantially consistent with the terms of the Intercompany Notereasonably acceptable to Agent;
(e) (i) Attributable Indebtedness Capital Lease Obligations and other Indebtedness (including Capitalized Capital Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within one hundred and eighty (180) days after the applicable asset acquisition, construction, repair, replacement or improvement, and (ii) any Permitted Refinancing of any Indebtedness set forth in an the immediately preceding clause (i); and provided further that the aggregate principal amount of Indebtedness (including without limitation Capital Lease Obligations) under this Section 5.3(f) does not to exceed the greater of (A) $13,000,000 70,000,000 and 20(B) 13.5% of Consolidated LTM EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtednessoutstanding;
(fg) Indebtedness in respect of Swap Rate Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(gh) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunderpermitted under Section 5.2; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is was not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or and (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such assumed Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (xA) $9,750,000 70,000,000 and (yB) 1513.5% of Consolidated LTM EBITDA of the Borrower determined at the any time of such incurrence on a Pro Forma Basisoutstanding;
(hi) Indebtedness representing deferred compensation to employees of Holdings the Borrower (or any direct or indirect parent of the Borrower) and its Restricted Subsidiaries incurred in the ordinary course Ordinary Course of businessBusiness or approved by the board of directors or managers or sole member, as applicable, of the Borrower in their reasonable business judgment;
(ij) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests Stock or Stock Equivalents of Holdings or any direct or indirect parent of Holdings the Borrower permitted by Section 7.065.6 in an aggregate principal amount not to exceed the greater of (i) $25,000,000 and (ii) 5.0% of LTM EBITDA at any one time outstanding;
(jk) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting (i) indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustmentsadjustments or (ii) earn-out obligations, in the case of clause (ii), not in excess of an aggregate principal amount of the greater of (A) $50,000,000 and (B) 10.0% of LTM EBITDA at any time outstanding; provided, that, in each case, all such Indebtedness shall be secured only to the extent permitted by Section 5.1 and payable only to the extent permitted by Section 5.8(b);
(kl) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transactions and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in connection with deposit accounts incurred in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDAcourse;
(n) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-take or pay obligations contained in supply arrangements, in each case, in the ordinary course Ordinary Course of businessBusiness;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course Ordinary Course of businessBusiness, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course Ordinary Course of business or consistent with past practiceBusiness;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(si) Junior Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies (including in connection with clauses (aPermitted Acquisitions and other similar Investments permitted under Section 5.2), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event (1) on the date of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu , the Borrower shall be in right of security compliance with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio Financial Covenant (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined calculated on a Pro Forma Basis) as of the end of the most recently ended Test Period; provided that such Indebtedness may be incurred to finance an Acquisition notwithstanding the failure to comply with the applicable ratios if such Acquisition is a Limited Condition Transaction and the Borrower was in compliance with such ratios on a Pro Forma Basis on the date that a legally binding commitment was entered into with respect to such Acquisition, (2) the final maturity date of such Indebtedness shall be no more earlier (but may be later) than the date that is ninety-one (x91) 4.00:1.00 days after the final maturity date of the then outstanding Term Loans and shall have a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Term Loans, plus ninety-one (y91) days, (3) to the extent such Junior Indebtedness is secured, such Indebtedness shall not be secured by any collateral other than the Collateral and shall be subject to customary intercreditor terms to be reasonably satisfactory to Agent and the Borrower, (4) such Indebtedness shall not guaranteed by any Person that is not a Guarantor and (5) any such Indebtedness incurred pursuant to this clause (r) by a Non-Credit Party, when taken together with any Indebtedness incurred pursuant to Section 5.3(s), shall not exceed an aggregate principal amount not to exceed the greater of (A) $80,000,000 and (B) 15% of LTM EBITDA at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Credit Party, and guarantees thereof by a Non-Credit Party, in connection an aggregate principal amount not to exceed, when taken together with Indebtedness incurred by a Permitted Acquisition or other Investment permitted hereunderNon-Credit Party pursuant to Section 5.3(r) above, the greater of (Ii) 4.00:1,00 $70,000,000 and (IIii) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment 13.5% of LTM EBITDA at the any one time of incurrenceoutstanding;
(iiit) if such Incremental Equivalent Indebtedness is unsecured, (and Guarantees thereof by the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2Guarantors) to the extent permitted by and incurred in connection compliance with a Permitted Acquisition or other Investment permitted hereunder, the greater applicable provisions of Section 1.1(e);
(Iu) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred additional Indebtedness in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the an aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant not to this Section 7.03(v) shall not exceed the greater of (xi) $9,750,000 100,000,000 and (yii) 1520.0% of Consolidated LTM EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the any one time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)outstanding;
(xv) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w(x);
(w) any Indebtedness constituting an Investment permitted under Section 5.2;
(x) obligations in respect of Disqualified Stock in an amount not to exceed the greater of (i) $6,000,000 and (ii) 1.0% of LTM EBITDA at any time outstanding which is subordinated to the Obligations as to right and time of payment and as to other rights and remedies thereunder and having such other terms as are, in each case, reasonably satisfactory to Agent; and
(y) Indebtedness in connection with a judgment not constituting an Event of Default under Section 7.1(h). For purposes of determining compliance with any restriction on the incurrence of Indebtedness, the principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 5.3.
Appears in 2 contracts
Sources: Credit Agreement (R1 RCM Inc. /DE), Credit Agreement (R1 RCM Inc. /DE)
Indebtedness. CreateDirectly or indirectly, create, incur, assume or suffer guaranty, or otherwise become or remain directly or indirectly liable with respect to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Obligations;
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party Subsidiary owed to the Borrower or to any other Subsidiary, or of the Borrower owed to any Restricted Subsidiary Subsidiary; provided, that is not (i) all such Indebtedness shall be evidenced by the Intercompany Note, and, if owed to a Loan Party Party, shall be subject to a First Priority Lien pursuant to the Pledge and Security Agreement, (ii) all such Indebtedness shall be unsecured and subordinated in right of payment to the payment in full of the Obligations pursuant to the terms of the Intercompany Note, (iii) any payment by any such Subsidiary Guarantor under any guaranty of the Obligations shall result in a pro tanto reduction of the amount of any Indebtedness owed by such Subsidiary to the Borrower or to any of its Subsidiaries for whose benefit such payment is made and (iv) such Indebtedness is permitted as an Investment under Section 6.06(d);
(c) Guarantees by Unsecured Indebtedness that (i) matures after, and does not require any scheduled amortization, mandatory redemption, sinking fund obligation or other scheduled payments of principal prior to, the date which is six months after the Term Loan Maturity Date (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemptions provisions satisfying the requirement of clause (ii) hereof), (ii) has terms and conditions (other than interest rate, redemption premiums and subordination terms), taken as a whole, that are not materially less favorable to the Borrower than the terms and conditions customary at the time for high-yield senior unsecured debt securities issued in a public offering, and (iii) does not require a Subsidiary of Holdings other than the Borrower and any Restricted the Subsidiary in Guarantors to be an obligor with respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunderto such Indebtedness; provided provided, that (A1) both immediately prior and after giving effect to the incurrence thereof, (x) no Guarantee by any Restricted Subsidiary Default or Event of any Indebtedness constituting a junior lien financing Default shall exist or Specified Junior Financing Obligation result therefrom and (y) Holdings shall be permitted unless such guaranteeing party shall have also provided in compliance with the Senior Unsecured Incurrence Test (on a Guarantee of the Obligations on the terms set forth herein, (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iiipro forma basis);
(d) Indebtedness incurred by Holdings or any of its Subsidiaries arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guaranties or letters of credit, surety bonds or performance bonds securing the performance of the Borrower or any Restricted such Subsidiary owing pursuant to such agreements, in connection with Permitted Acquisitions or permitted dispositions of any Loan Party business, assets or Subsidiary of Holdings or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Noteits Subsidiaries;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisitionwhich may be deemed to exist pursuant to any guaranties, constructionperformance, repairsurety, replacementstatutory, lease appeal or improvement similar obligations incurred in the ordinary course of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtednessbusiness;
(f) Indebtedness in respect of Swap Contracts designed netting services, overdraft protections and otherwise in connection with deposit accounts;
(g) guaranties in the ordinary course of business of the obligations of suppliers, customers, franchisees, real property lessors and licensees of the Borrower and its Subsidiaries;
(h) guaranties by the Borrower of Indebtedness of a Subsidiary Guarantor or guaranties by a Subsidiary Guarantor of Indebtedness of the Borrower or another Subsidiary Guarantor with respect, in each case, to hedge against Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01; provided, that if the Borrower’s Indebtedness that is being guarantied is unsecured and/or subordinated to the Obligations, the guaranty shall also be unsecured and/or subordinated to the Obligations;
(i) Indebtedness described in Schedule 6.01 and any Permitted Refinancing thereof;
(j) Indebtedness incurred during any Fiscal Year in an amount not to exceed $25,000,000 in the aggregate which is secured by purchase money Liens or incurred with respect to Capital Leases and purchase money Indebtedness; provided, that any such Indebtedness incurred with respect to purchase money (i) shall be secured only by the asset acquired in connection with the incurrence of such Indebtedness, and (ii) shall constitute not less than 75.0% of the aggregate consideration paid with respect to such asset;
(i) Indebtedness of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Subsidiary or Indebtedness attaching to assets that are acquired by the Borrower or any Restricted Subsidiary’s exposure of its Subsidiaries, in each case after the Closing Date as the result of a Permitted Acquisition, provided, that (x) such Indebtedness existed at the time such Person became a Subsidiary or at the time such assets were acquired and, in each case, was not created in anticipation thereof and (y) such Indebtedness is not guaranteed in any respect by Holdings or any of its Subsidiaries and (ii) any Permitted Refinancing thereof; provided, that (1) the direct and contingent obligors with respect to interest ratessuch Indebtedness are not changed and (2) such Indebtedness shall not be secured by any assets other than the assets securing the Indebtedness being renewed, foreign exchange rates extended or commodities pricing risks refinanced;
(l) Indebtedness of the type described in clause (xi) of the definition thereof incurred in the ordinary course of business and not for speculative purposes and Guarantees thereofspeculation purposes; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);and
(gm) other unsecured Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted its Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount not to exceed at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness25,000,000.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Credit and Guaranty Agreement (RadNet, Inc.), Credit and Guaranty Agreement (RadNet, Inc.)
Indebtedness. Create(a) Holdings and the Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(ai) Indebtedness of any Loan Party Holdings, the Borrower and the Restricted Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 2.20, 2.21 or 2.152.24);
(b) (xii) Indebtedness (A) outstanding on the Closing Effective Date and listed on Schedule 7.03(b) 6.01 and any Permitted Refinancing thereof and (yB) that is intercompany Indebtedness among Holdings, the Borrower and/or the Restricted Subsidiaries outstanding on the Closing Date date hereof and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(ciii) Guarantees by Holdings, the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of Holdings, the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) such Guarantee is otherwise permitted by Section 6.04, (B) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Loan Document Obligations on pursuant to the terms set forth herein, Guarantee Agreement and (BC) if the Indebtedness being Guaranteed is subordinated to the Loan Document Obligations, such Guarantee shall be subordinated to the Guarantee of the Loan Document Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(div) Indebtedness of Holdings, the Borrower or of any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (Subsidiary, the Borrower or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, Holdings to the extent constituting an Investment permitted by Section 7.02(c)(iii)6.04; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed owing to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Loan Document Obligations pursuant (to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable extent any such Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) is outstanding at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is 30 days after the Latest Maturity Date, Effective Date or have a Weighted Average Life to Maturity less than such later date as the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (dAdministrative Agent may reasonably agree) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) but only to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (Iby applicable law and not giving rise to material adverse Tax consequences) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that terms (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment least as favorable to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) Lenders as those set forth in the proviso to Section 2.14(e)(iii) form of intercompany note attached as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and Exhibit H or (B) otherwise reasonably satisfactory to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)Administrative Agent;
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: First Lien Credit Agreement (First Advantage Corp), First Lien Credit Agreement (First Advantage Corp)
Indebtedness. Create(a) Neither Holdings nor the Borrower will, nor will they permit any Restricted Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15);
(bi) (x) Indebtedness outstanding on created under the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof Loan Documents and (y) intercompany Indebtedness outstanding on owing to Select Medical Holdings or its subsidiaries incurred in connection with the Closing Date Transactions,
(ii) Indebtedness in respect of the New Unsecured Notes and any Permitted Refinancing thereof,
(iii) Indebtedness existing on the Closing Date not to exceed $2,500,000 and other Indebtedness existing on the Closing Date set forth in Schedule 6.01 and, in each case, any Permitted Refinancing thereof,
(iv) Indebtedness of Holdings owed to any Restricted Subsidiary and of any Restricted Subsidiary owed to Holdings or any other Restricted Subsidiary; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant on terms reasonably satisfactory to the Intercompany Note;Administrative Agent and Indebtedness of any Restricted Subsidiary that is a Non-Loan Party owed to any Loan Party shall be subject to the cap set forth in Section 6.04(d); provided, further, that Indebtedness owed to any Captive Insurance Subsidiary shall only be subordinated to the extent permitted by applicable laws or regulations,
(cv) Guarantees by the Borrower and Holdings of Indebtedness of any Restricted Subsidiary in respect and by any Restricted Subsidiary of Indebtedness of the Borrower Holdings or any other Restricted Subsidiary otherwise permitted hereunderSubsidiary; provided that (A) no Guarantee the Indebtedness so Guaranteed is permitted by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth hereinthis Section 6.01, (B) if Guarantees permitted under this clause (v) shall be subordinated to the Obligations of Holdings or the applicable Restricted Subsidiary to the same extent and on the same terms as the Indebtedness being so Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party except in the case of Foreign Subsidiaries that provide Guarantees of Indebtedness of a other Foreign Subsidiaries, no Restricted Subsidiary that shall Guarantee any Indebtedness unless it is not a Subsidiary Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);Party,
(dvi) Indebtedness (including Attributable Indebtedness) of the Borrower Holdings or any Restricted Subsidiary owing incurred to finance the acquisition, construction or improvement of any Loan Party fixed or capital assets, including Capital Lease Obligations, and any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party Indebtedness assumed by Holdings or any Restricted Subsidiary in connection with the acquisition of any such assets or secured by a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, Lien on any such assets prior to the extent constituting an Investment permitted by Section 7.02(c)(iii)acquisition thereof, and Permitted Refinancings thereof; provided that (A) such Indebtedness (other than Permitted Refinancings) is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of Indebtedness permitted by this clause (vi) shall not (except as permitted by the definition of “Permitted Refinancing”) exceed at any time outstanding the greater of (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement $87,500,000 and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 2025.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at for the most recently ended Test Period as of the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;incurrence,
(fvii) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(gx) Indebtedness of the Borrower Holdings or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition and not created in contemplation thereof or other Investment not prohibited hereunder(y) Permitted Debt incurred to finance a Permitted Acquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the assumption or incurrence of such Indebtedness, as applicableIndebtedness incurred or assumed pursuant to this clause (vii):
(A) if such Indebtedness ranks pari passu in right of security with the Obligations, the aggregate amount of such Indebtedness at any time outstanding First Lien Net Leverage Ratio does not exceed 5.00:1.00,
(B) if such Indebtedness ranks junior in right of security with the sum of Obligations, the Secured Net Leverage Ratio does not exceed 6.00:1.00, or
(C) if such Indebtedness is unsecured, either (x) the greater of $16,250,000 Total Net Leverage Ratio does not exceed 6.50:1.00 or (y) the Fixed Charge Coverage Ratio is not less than 2.00:1.00, and 25% of Consolidated EBITDA (determined in each case, subject to compliance with the Financial Covenant on a Pro Forma Basis and, in accordance with Section 1.09the case of clauses (x) plus and (y) additional indebtedness so long as of this clause (vii), any Permitted Refinancing of any such Indebtedness; provided that any such Indebtedness of a Non-Loan Party does not exceed in the aggregate at any time outstanding, together with any Indebtedness incurred by a Non-Loan Party pursuant to clause (xvi) of this Section 6.01, the greater of $70,000,000 and 20.0% of Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00EBITDA for the most recently ended Test Period, in each case determined at the such time of incurrence;
(viii) Indebtedness owed to any Person (including obligations in respect of letters of credit for the benefit of such assumption Person) providing workers’ compensation, health, disability or incurrenceother employee benefits or property, on a Pro Forma Basis casualty or liability insurance pursuant to reimbursement or indemnification obligations to such Person, in accordance each case incurred in the ordinary course of business,
(ix) Indebtedness of Holdings or any Restricted Subsidiary in respect of performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar obligations, in each case provided in the ordinary course of business,
(x) Indebtedness of any Loan Party pursuant to Swap Agreements permitted by Section 6.07,
(xi) with Section 1.09respect to Holdings, Qualified Holdings Discount Debt; provided that, in other than with respect to any additional principal amounts resulting from the case accrual of clause (ii)pay-in-kind interest, (A) such Indebtedness does not mature prior may only be issued or incurred to the date extent that is after giving effect to the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding incurrence of such additional Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;, the Total Net Leverage Ratio does not exceed 6.00 to 1.00 and (B) no Default has occurred and is continuing or would result therefrom,
(hxii) Indebtedness representing deferred compensation to employees of Holdings or any of its and the Restricted Subsidiaries incurred in the ordinary course of business;,
(ixiii) Indebtedness consisting in respect of promissory notes issued to physicians, consultants, employees or directors or former employees, consultants or directors in connection with repurchases of Equity Interests permitted by Section 6.08(a)(iii),
(xiv) Indebtedness of any Foreign Subsidiary or any Non-Loan Party, collectively, in an amount not to exceed, together with any Indebtedness incurred by a Non-Loan Party pursuant to clause (vii) of this Section 6.01, $87,500,000 at any time outstanding,
(xv) Refinancing Debt Securities, the Net Proceeds of which are applied to prepay Term Loans in connection with Section 2.11 and any Permitted Refinancing thereof,
(xvi) (a) Permitted Debt, provided that (i) (x) if such Indebtedness is secured by Liens ranking pari passu with the Liens securing the Obligations, the First Lien Net Leverage Ratio does not exceed 5.00:1.00, (y) if such Indebtedness is secured by Liens ranking junior to the Liens securing the Obligations, the Secured Net Leverage Ratio does not exceed 6.00:1.00, and (z) if such Indebtedness is unsecured, either (1) the Total Net Leverage Ratio does not exceed 6.50:1.00 or (2) the Fixed Charge Coverage Ratio is not less than 2.00:1.00, in each case, determined on a Pro Forma Basis after giving effect to such assumption or incurrence and the use of proceeds thereof; and any Permitted Refinancing thereof and (ii) in each case, subject to compliance with the Financial Covenant on a Pro Forma Basis; and (b) other Permitted Debt in an aggregate principal amount pursuant to this subclause (b), when aggregated with the Free and Clear Usage Amount at such time, not to exceed the sum of (i) the greater of (x) $400,000,000 and (y) 100.0% of Consolidated EBITDA for the most recently ended Test Period plus (ii) the principal amount of any voluntary prepayments of Term Loans or Revolving Loans, to the extent accompanied by a permanent reduction in the Revolving Commitments, and any Permitted Refinancing thereof,
(xvii) the incurrence by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five (5) Business Days,
(xviii) the incurrence of Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or capital stock of Holdings or any Restricted Subsidiary,
(xix) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business,
(xx) Indebtedness of Holdings or a Restricted Subsidiary in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for 10 Business Days or less,
(xxi) Indebtedness in the amount of Net Proceeds actually received by Holdings from the issuance by Holdings of any Equity Interests (or capital contribution in respect thereof) after the Closing Date other than pursuant to the Cure Right or proceeds received in connection with the Initial Public Offering or to the extent Otherwise Applied, and
(xxii) the incurrence or issuance by Holdings or any of its incurrence;
(m) Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not to exceed the greater of $22,750,000 300,000,000 and 35% of Consolidated EBITDA;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 1575.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined for the most recently ended Test Period at the time of incurrence;.
(tb) Credit Agreement Refinancing Indebtedness;
For purposes of determining compliance with Section 6.01, in the event that an item of Indebtedness (u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a)portion thereof) at any time, (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment whether at the time of incurrence or upon the application of all or a portion of the proceeds thereof or subsequently, meets the criteria of more than one of the categories of permitted Indebtedness described in Section 6.01(a)(i) through (yxxi) above, the Interest Coverage Ratio Borrower, in its sole discretion, will classify and may subsequently reclassify such item of Indebtedness (determined on a Pro Forma Basisor any portion thereof) would not in any one or more of the types of Indebtedness described in 6.01(a)(i) through (xxi) above and will only be less than (1) 2.00:1.00 or (2) required to include the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation amount and type of such Permitted Acquisition or other InvestmentIndebtedness in such of the above clauses as determined by the Borrower at such time; provided that (A) Indebtedness that originally reduced the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 Free and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined Clear Usage Amount at the time of incurrence may not be reclassified. The Borrower will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in 6.01(a)(i) through (Bxxii) above.
(c) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness, the dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a term loan that is not subordinated foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in right of payment to the Loan Documents and that is secured by a Lien effect on the Collateral that ranks pari passu in right date of security with the Term Loanssuch extension, the Term Loans replacement, refunding, refinancing, renewal or defeasance, such dollar-denominated restriction shall be subject deemed not to have been exceeded so long as the “most favored nation” pricing adjustment (if applicable) set forth in principal amount of such refinancing Indebtedness does not exceed the proviso to Section 2.14(e)(iii) as if principal amount of such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of being extended, replaced, refunded, refinanced, renewed or defeased, plus the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum aggregate amount of Loans available thereunder shall be assumed fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (Bincluding OID) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to in connection with such repayment of Indebtednessrefinancing.
(wd) Any Permitted Refinancings The accrual of interest, the accretion or amortization of OID, the payment of interest in the form of additional Indebtedness with the same terms, shall not be deemed to be an incurrence of Indebtedness incurred pursuant to for purposes of this Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);6.01.
Appears in 2 contracts
Sources: Credit Agreement (Select Medical Holdings Corp), Credit Agreement (Concentra Group Holdings Parent, Inc.)
Indebtedness. CreateThe Borrower shall not, nor shall it enter into any binding agreement to, incur, create, assume or suffer permit to exist any Indebtedness, exceptother than:
(a) the Loans permitted hereunder to be outstanding;
(b) other Indebtedness; provided that:
(i) except with respect to Indebtedness incurred under the Unsecured Credit Facility, such Indebtedness shall provide that the lenders of such Indebtedness shall not have the right to accelerate such Indebtedness without the prior written consent of the Required Lenders, provided, however, that in the event that a lender seeks to accelerate due to the occurrence of a Bankruptcy Event with respect to the Borrower or if such Indebtedness accelerates automatically upon the occurrence of a Bankruptcy Event with respect to the Borrower pursuant to the terms of such other Indebtedness, no consent of the Required Lenders shall be required; provided, further, that such agreement shall provide that if an Event of Default shall have occurred hereunder and the Indebtedness of the Borrower hereunder shall have been accelerated or otherwise declared due and payable prior to the scheduled maturity thereof, the holder of such Indebtedness may, subject to the terms of any Loan Party under applicable NBA Consent Letter with respect to such Indebtedness, accelerate or otherwise declare such Indebtedness due and payable prior to the Loan Documents scheduled maturity thereof without the consent of the Required Lenders;
(ii) such Indebtedness is unsecured;
(iii) any party or entity (including the Controlling Owner of the Borrower) Guaranteeing such Indebtedness shall have executed the Security Agreement and NBA Consent Letter executed by the Borrower, if the obligations under such guaranty are secured by any portion of the Collateral; and
(iv) the aggregate amount at any time outstanding of such Indebtedness, together with any purchase money Indebtedness and Capital Lease Obligations and other Indebtedness incurred pursuant to clause (c) below, shall not exceed $15,000,000 outstanding at any time;
(c) (i) purchase money Indebtedness and Capital Lease Obligations with respect to equipment or any other fixed or capital assets to the extent that such purchase money Indebtedness and Capital Lease Obligations (x) are recourse only to, and secured by a Lien only on, the equipment or other fixed or capital assets to which such purchase money Indebtedness or Capital Lease Obligations relate (and are not recourse to, or secured by a Lien on, the Borrower or any of its Subsidiaries (other than any Excluded Subsidiaries) or any of their other assets or property) or (y) exist on the date hereof and are set forth in Schedule 5.08 (including any refinancings, extensions or replacements thereof (A) in an aggregate principal amount not greater than the principal amount outstanding of such Indebtedness being refinanced, (B) with a stated maturity not earlier than the Indebtedness being refinanced, (C) that is not senior in right of payment to the Indebtedness being refinanced, (D) with scheduled principal payments that are not in the aggregate due any earlier in an amount greater than the Indebtedness being refinanced and (E) on other terms reasonably acceptable to the Agent) and (ii) other purchase money Indebtedness and Capital Lease Obligations with respect to equipment or any other fixed or capital assets and other unsecured Indebtedness, provided that the aggregate amount at any time outstanding of such Indebtedness, together with any Indebtedness incurred pursuant to Section 2.14 or 2.15);
clause (b) (x) Indebtedness above, shall not exceed $15,000,000 outstanding on the Closing Date and listed on Schedule 7.03(b) and at any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)time;
(d) Indebtedness of the Borrower to Parent or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)Parent; provided that (x) no any such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated and, subject to the occurrence and during the continuance of an Event of Default, subordinated in right of payment to the Secured Obligations pursuant to subordination on terms substantially consistent with customary for intercompany subordinated Indebtedness, as reasonably determined by the terms of the Intercompany NoteAdministrative Agent;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred L/C Obligations secured only by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements Liens of the applicable asset type described in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.095.09(f), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;; and
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunderIndebtedness; provided that (i) solely in the case of assumed Indebtedness, any such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or shall be unsecured, (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g5.08(f) shall not exceed the greater of (x) $9,750,000 35,000,000 and (yiii) 15% the aggregate amount of Consolidated EBITDA Indebtedness of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined NBA Debt Limit at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtednesstime.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 2 contracts
Sources: Credit Agreement, Credit Agreement (Madison Square Garden Co)
Indebtedness. Create(a) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume issue, assume, guarantee or suffer otherwise become directly or indirectly liable, contingently or otherwise, with respect to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including Acquired Debt), and the Borrower and the Guarantors will not issue any Disqualified Equity Interests and the Borrower will not permit any of its Restricted Subsidiaries (other than the Guarantors) to issue any shares of preferred stock; provided, however, that the Borrower and any of the Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Equity Interests, if the Fixed Charge Coverage Ratio for the Borrower’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred pursuant or such Disqualified Equity Interests are issued would have been at least 2.0 to Section 2.14 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if the additional Indebtedness had been incurred, or 2.15);the Disqualified Equity Interests had been issued, as the case may be, at the beginning of such four-quarter period.
(b) (xThe provisions of Section 7.09(a) Indebtedness outstanding on will not prohibit the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness incurrence of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to of the Obligations pursuant to the Intercompany Note;following items of Indebtedness (collectively, “Permitted Debt”):
(ci) Guarantees the incurrence by the Borrower and any its Restricted Subsidiary in respect Subsidiaries of Indebtedness (a) Indebtedness, letters of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness credit and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset bankers’ acceptances under Credit Facilities in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding as of any date of incurrence of any such Indebtedness (together with the aggregate amount of any Permitted Refinancing Indebtedness outstanding as of such Indebtedness of Restricted Subsidiaries date that are non-Loan Parties was incurred pursuant to this Section 7.03(gclause (1)(b) shall and that is not deemed to be incurred pursuant to another clause of the definition of Permitted Debt or clause (a) above as a result of reclassification) not to exceed the greater of (x) $9,750,000 1,500.0 million ($225.0 million) and (y) 15% of such amount as would not cause the Consolidated EBITDA Senior Secured Leverage Ratio, calculated as of the Borrower determined at date of incurrence, to exceed 3.5 to 1.0 and (b) any Permitted Refinancing Indebtedness incurred to extend, refinance, refund, renew, replace, defease or discharge any Indebtedness that was incurred pursuant to this clause (i) and was not, as of the time date of incurrence of such incurrence on Permitted Refinancing Indebtedness, deemed to be incurred pursuant to another clause of the definition of Permitted Debt or clause (a) above as a Pro Forma Basisresult of reclassification;
(hii) the incurrence by the Borrower and its Restricted Subsidiaries of Existing Indebtedness;
(iii) the incurrence by the Borrower and the Guarantors of Indebtedness representing deferred compensation to employees represented by the Loans and Guarantees of Holdings the Loans;
(iv) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the ordinary course business of businessthe Borrower or such Restricted Subsidiary (whether through the direct purchase of assets or the Equity Interests of any Person owning such assets), in an aggregate principal amount at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (iv), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (iv), not to exceed the greater of (a) $300.0 million ($185.0 million) and (b) 4.0% of Consolidated Total Assets (determined as of the date of incurrence);
(iv) Indebtedness consisting of promissory notes issued the incurrence by Holdings the Borrower or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to current refund, refinance or former officersreplace, managersIndebtedness incurred under clauses (ii), consultants(iii) or (iv) above, directors and employeesthis clause (v), their respective estatesclauses (xvii), spouses (xviii), (xx), (xxvi) or former spouses (xxvii) below or pursuant to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.067.09(a);
(jvi) Indebtedness incurred the incurrence by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger of Indebtedness owed to the Borrower or any Disposition permitted hereunderof its Restricted Subsidiaries; provided, however, that:
(A) if the Borrower or any Guarantor is the obligor on such Indebtedness, and the payee is not the Borrower or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Loans, in the case of the Borrower, or the Guarantee of the Loans by such Guarantor, in the case of a Guarantor; and
(B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Borrower or a Restricted Subsidiary thereof and (2) any sale or other transfer of any such Indebtedness to a Person that is not either the Borrower or a Restricted Subsidiary thereof shall be deemed, in each case, constituting indemnification obligations to constitute an incurrence of such Indebtedness by the Borrower or obligations in respect of purchase price such Restricted Subsidiary, as the case may be, that was not permitted by this clause (including earn-outs) or other similar adjustmentsvi);
(kvii) Indebtedness consisting of obligations of Holdings the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunderHedging Obligations that are not entered into for the purpose of speculation;
(lviii) Cash Management Obligations the issuance by any of the Borrower’s Restricted Subsidiaries to the Borrower or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Borrower or a Restricted Subsidiary of the Borrower; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Borrower or a Restricted Subsidiary of the Borrower, will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (viii);
(ix) the Guarantee by the Borrower or any of its Restricted Subsidiaries of Indebtedness of the Borrower or a Restricted Subsidiary of the Borrower that was permitted to be incurred by another provision of this Section 7.09 and other could have been incurred (in compliance with this Section 7.09) by the Person so Guaranteeing such Indebtedness;
(x) the incurrence of Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or 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; provided, so long as however, that such Indebtedness is extinguished within 10 five Business Days of its incurrence;
(mxi) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% Indebtedness of Consolidated EBITDA;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankerssecurity for workers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, payment obligations in connection with self- insurance, health, disability or other employee benefits or property, casualty or liability insurance provided to the Borrower or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect any of its Restricted Subsidiaries, bankers’ acceptances, performance, bid, appeal surety and surety similar bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in the ordinary course of business; provided that the underlying obligation to perform is that of the Borrower and its Restricted Subsidiaries and not that of the Borrower’s Unrestricted Subsidiaries; and provided further that such underlying obligation is not in respect of letters borrowed money;
(xii) the incurrence of creditIndebtedness that may be deemed to arise as a result of agreements of the Borrower or any Restricted Subsidiary of the Borrower providing for indemnification, bank guarantees adjustment of purchase price, earn-out or similar instruments related theretoobligations, in each case case, incurred or assumed in connection with the disposition of any business or assets of the Borrower or any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary; provided that (a) any amount of such obligations included on the face of the balance sheet of the Borrower or any Restricted Subsidiary shall not be permitted under this clause (xii) and (b) the maximum aggregate liability in respect of all such obligations outstanding under this clause (xii) shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Borrower and the Restricted Subsidiaries in connection with such disposition;
(xiii) Indebtedness incurred under commercial letters of credit issued for the account of the Borrower or any of its Restricted Subsidiaries in the ordinary course of business (and not for the purpose of, directly or consistent with past practice;
(q) letters indirectly, incurring Indebtedness or providing credit support or a similar arrangement in respect of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09Indebtedness), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) ; or Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses under letters of credit and bank guarantees backstopped by letters of credit under the Credit Facilities;
(a)xiv) pledges, (c) and (d) (as applicable) deposits or payments made or given in the ordinary course of the Applicable Requirements, so long as no Default or Event of Default (limited business in connection with Indebtedness incurred or to finance a Limited Condition Transactionsecure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations, or arising from guarantees to Defaults suppliers, lessors, licenses, contractors, franchisees or Events customers of Default under Sections 8.01(aobligations, other than Indebtedness, made in the ordinary course of business;
(xv) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right by the Borrower or any of security with the Obligationsits Restricted Subsidiaries issued to directors, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as officers, managers or employees of the date Borrower or any of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred its Restricted Subsidiaries in connection with a Permitted Acquisition the redemption or other Investment permitted hereunderpurchase of Equity Interests that, by its terms, is subordinated to the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness notes, is not secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as by any assets of the date Borrower or any of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 its Restricted Subsidiaries and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall does not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately require cash payments prior to the consummation Stated Maturity of such Permitted Acquisition or other Investment; provided that (A) the Loans, in an aggregate principal amount at any time outstanding not to exceed $25.0 million ($5.0 million);
(xvi) the Ralcorp Obligations;
(xvii) the incurrence by any Foreign Subsidiary of Indebtedness and/or the guarantee by the Borrower and/or any of its Restricted Subsidiaries of such Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, as of Subsidiaries that are non-Loan Parties the date of incurrence of any Indebtedness pursuant to this clause (xvii), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this Section 7.03(v) shall clause (xvii), not to exceed the greater of (xa) $9,750,000 300.0 million ($60.0 million) and (yb) 154.0% of Consolidated EBITDA Total Assets (determined as of the date of incurrence);
(xviii) the incurrence by the Borrower or any of its Restricted Subsidiaries of any Capitalized Lease Obligation resulting from a Sale and Leaseback Transaction in an aggregate principal amount at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (xviii), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (xviii), not to exceed the greater of $100.0 million ($20.0 million) and 1.50% of Consolidated Total Assets (determined as of the date of incurrence);
(xix) Indebtedness in respect of Receivables Program Obligations;
(xx) the incurrence of Acquired Debt or other Indebtedness incurred in connection with, or in contemplation of, an acquisition (including by way of merger or consolidation) by the Borrower or any of its Restricted Subsidiaries; provided that after giving pro forma effect to such acquisition, either (a) the Borrower’s Fixed Charge Coverage Ratio immediately following such acquisition and incurrence (including a pro forma application of the net proceeds therefrom) would be at least 2.0 to 1.0 or (b) the Borrower’s pro forma Fixed Charge Coverage Ratio would be greater than the actual Fixed Charge Coverage Ratio of the Borrower immediately prior to such acquisition and incurrence;
(determined on a Pro Forma Basis xxi) Indebtedness incurred by the Borrower or any Restricted Subsidiary of the Borrower to the extent that the net proceeds thereof are promptly deposited with the Administrative Agent to repay the Loans;
(xxii) Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower consisting of obligations to pay insurance premiums or take-or-pay obligations contained in accordance with Section 1.09)supply arrangements incurred in the ordinary course of business;
(xxiii) Indebtedness in respect of overdraft facilities, employee credit card programs and other cash management arrangements in the ordinary course of business;
(xxiv) Indebtedness representing deferred compensation to employees of the Borrower and its Restricted Subsidiaries incurred in the ordinary course of business;
(xxv) cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case determined at in connection with deposit accounts;
(xxvi) the time incurrence of incurrence and (B) provided that if such Indebtedness is a term loan by any Restricted Subsidiary of the Borrower that is not a Guarantor, and/or the guarantee by the Borrower or any of its Restricted Subsidiaries of Indebtedness of any joint venture of the Borrower or any of its Restricted Subsidiaries, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (xxvi), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (xxvi), not to exceed the greater of $275.0 million ($55.0 million) and 3.0% of Consolidated Total Assets (determined as of the date of incurrence);
(xxvii) the incurrence by the Borrower or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (xxvii), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (xxvii), not to exceed the greater of $400.0 million ($80.0 million) and 4.5% of Consolidated Total Assets (determined as of the date of incurrence); and
(xxviii) the incurrence by the Loan Parties as of or after the Debt Assumption of the Permanent Term Financing, in an aggregate principal amount not to exceed, at any time outstanding, (a) $700.0 million less (b) the aggregate amount of any repayment or prepayment of the Permanent Term Financing.
(c) The Borrower will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Loan Documents and that Borrower or of such Guarantor, as the case may be, unless such Indebtedness is secured by a Lien on also contractually subordinated in the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject payment to the “most favored nation” pricing adjustment (if applicable) set forth in Loans and the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunderapplicable Guarantee on substantially the same terms. For purposes of the calculations foregoing, no Indebtedness will be deemed to be contractually subordinated in this Section 7.03(v), (A) with respect right of payment to any Revolving Credit Commitments, a borrowing other Indebtedness of the maximum amount Borrower or any Guarantor solely by virtue of Loans available thereunder shall be assumed and (B) to being unsecured or secured by a junior priority Lien or by virtue of the extent fact that the holders of such Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of such holders priority over the other holders in the collateral held by them, including intercreditor agreements that contain customary provisions requiring turnover by holders of junior priority Liens of proceeds of any Indebtedness incurred under this Section 7.03(v) collateral in the event that the security interests in favor of the holders of the senior priority in such intended collateral are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment not perfected or invalidated and similar customary provisions protecting the holders of Indebtednesssenior priority Liens.
(wd) Any For purposes of determining compliance with this Section 7.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Refinancings of Indebtedness Debt described in clauses (i) through (xxviii) above, or is entitled to be incurred pursuant to Section 7.03(v);
(x) all premiums (if any7.09(a), interest the Borrower will be permitted to classify such item of Indebtedness on the date of its incurrence (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);later reclassi
Appears in 2 contracts
Sources: Bridge Facility Agreement (Bellring Brands, Inc.), Bridge Facility Agreement (Post Holdings, Inc.)
Indebtedness. Create, incur, assume or suffer to exist Incur any Indebtedness, except:
(a) Indebtedness of any the Borrowers and the other Loan Party Parties under the Loan Documents (including any Indebtedness incurred pursuant to Section Sections 2.14 or and 2.15);
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note[reserved];
(c) Guarantees by the Borrower Indebtedness (i) listed on Schedule 7.03 and any Permitted Refinancing Indebtedness thereof and (ii) that is intercompany Indebtedness among Holdings and the Restricted Subsidiaries outstanding on the date hereof; provided that any intercompany Indebtedness of any Borrower owing to Holdings or any other Restricted Subsidiary (other than a Borrower) shall be subordinated in right of payment to the Obligations in a manner reasonably satisfactory to the Administrative Agent;
(d) Guarantee Obligations of Holdings and its Restricted Subsidiaries in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (Bi) if the Indebtedness being Guaranteed guaranteed is subordinated in right of payment to the Obligations, such Guarantee Obligation shall be subordinated in right of payment to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness Indebtedness, (ii) no Guarantee Obligations of Holdings shall be permitted unless Holdings shall have also provided a Guarantee of the Obligations and (Ciii) no Guarantee Obligations of any Guarantee by a Loan Party Restricted Subsidiary in respect of any Indebtedness of a Restricted Subsidiary that is not Holdings or a Loan Party shall only be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations;
(e) Indebtedness of Holdings or any Restricted Subsidiary owing to Holdings or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) 7.02; provided that any such Indebtedness of the any Borrower or any Restricted Subsidiary owing to any Loan Party Holdings or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent shall be subordinated in right of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, payment to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to Obligations in a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged manner reasonably satisfactory to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany NoteAgent;
(e) (i) Attributable Indebtedness Capitalized Lease Obligations and other Indebtedness (including Capitalized Leases) financing an the acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to assets; provided that (x) such Indebtedness is Incurred concurrently with or within 270 days after the applicable acquisition, construction, repair, replacement, lease or improvements improvement and (y) after giving effect to such Incurrence, the aggregate principal amount of Indebtedness outstanding pursuant to this clause (i), together with the aggregate principal amount of Permitted Refinancing Indebtedness (in respect of Indebtedness Incurred under this clause (i)) outstanding pursuant to clause (iii) below, shall not exceed the greater of (a) $25,000,000 and (b) 10.0% of Consolidated Total Assets as of the applicable asset end of the Test Period most recently ended on or prior to the date such Indebtedness is Incurred based upon the Section 6.01 Financials most recently delivered on or prior to such date, (ii) Capitalized Lease Obligations arising out of Permitted Sale Leasebacks in an aggregate principal amount, together with the aggregate principal amount of Permitted Refinancing Indebtedness (in respect of Indebtedness Incurred under this clause (ii)) outstanding pursuant to clause (iii) below, not to exceed the greater of (x) $13,000,000 20,000,000 and 20(y) 8.0% of Consolidated EBITDA Total Assets as of the end of the Test Period most recently ended on or prior to the date such Capitalized Lease Obligation is Incurred based upon the Section 6.01 Financials most recently delivered on or prior to such date and (determined iii) any Permitted Refinancing Indebtedness of any Indebtedness set forth in the immediately preceding clauses (i) and (ii);
(g) (i) Indebtedness of any Restricted Subsidiary arising under Capitalized Leases, other than Capitalized Leases in effect on a Pro Forma Basis in accordance with the Closing Date (and set forth on Schedule 7.03) or Capitalized Leases entered into pursuant to Section 1.097.03(f), in each case determined ; provided that at the time of incurrence Incurrence thereof and after giving Pro Forma Effect thereto and the use of the proceeds thereof, the aggregate principal amount of Indebtedness under this clause (i), together with any the aggregate principal amount of Permitted Refinancings thereofRefinancing Indebtedness outstanding pursuant to clause (ii) at any time outstanding below, shall not exceed the greater of (x) $10,000,000 and (y) 4.0% of Consolidated Total Assets as of the end of the Test Period most recently ended on or prior to the date such Indebtedness is Incurred based upon the Section 6.01 Financials most recently delivered on or prior to such date; and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of Indebtedness Incurred to refinance such Attributable Indebtedness;
(fh) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred Incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis[reserved];
(hi) Indebtedness representing deferred compensation to employees employees, directors, consultants, partners, members, contract providers, independent contractors or other service providers of Holdings (or any of its Parent Entity thereof) and the Restricted Subsidiaries incurred Incurred in the ordinary course of businessbusiness and (ii) other similar arrangements Incurred by Holdings or the Restricted Subsidiaries in connection with Permitted Acquisitions or other Investments expressly permitted under Section 7.02 (other than solely from clause (f) thereof);
(ik) [reserved];
(l) unsecured Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and directors, employees, partners, members and other service providers (or their respective estates, spouses or former spouses Immediate Family Members) to finance the retirement, acquisition, repurchase, purchase or redemption of Equity Interests of Holdings (or any direct Parent Entity thereof to the extent such Parent Entity uses the proceeds to finance the purchase or indirect parent redemption (directly or indirectly) of Holdings its Equity Interests), in each case to the extent permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse ACH arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements arrangements, in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in connection with deposit accounts incurred in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-take or pay obligations contained in supply arrangements, in each case, entered into in the ordinary course of business;
(o) Indebtedness incurred Incurred by the Borrower Holdings or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ banker’s acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of businessbusiness (and not in respect of Indebtedness), including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower Holdings or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;.
(sr) (i) Indebtedness incurred Incurred by Holdings or a Restricted Subsidiary that is a nonNon-Loan Party whichSubsidiary, when aggregated with the principal amount and Guarantee Obligations Holdings or of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis Non-Loan Party Subsidiaries in accordance with Section 1.09)respect thereof, in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a)case, (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) working capital and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtednesssimilar facilities; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, that the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunderIndebtedness, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment measured at the time of incurrence;
Incurrence and after giving Pro Forma Effect thereto and the use of the proceeds thereof, of Non-Loan Parties pursuant to this clause (ii) if such Indebtedness is secured on a junior basis in right of security i), together with the Obligations, the aggregate principal amount of such Permitted Refinancing Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(vclause (ii) below, shall not exceed the greater of (x) $9,750,000 10,000,000 and (y) 154.0% of Consolidated EBITDA Total Assets as of the end of the Test Period most recently ended on or prior to the date such Indebtedness is Incurred (measured as of such date) based upon the Section 6.01 Financials most recently delivered on or prior to such date; and (ii) any Permitted Refinancing Indebtedness Incurred to Refinance such Indebtedness;
(s) additional Indebtedness in an aggregate principal amount, measured at the time of Incurrence and after giving Pro Forma Effect thereto and the use of the proceeds thereof, not to exceed the greater of (x) $50,000,000 and (y) 20.0% of Consolidated Total Assets as of the end of the Test Period most recently ended on or prior to the date such Indebtedness is Incurred (measured as of such date) based upon the Section 6.01 Financials most recently delivered on or prior to such date;
(t) Indebtedness Incurred to finance a Permitted Acquisition (or similar Investment); provided that (i) immediately before and immediately after giving Pro Forma Effect to any such Permitted Acquisition (or similar Investment), no Event of Default pursuant to clauses (a), (f) or (g) of Section 8.01 shall have occurred and be continuing, (ii) Holdings and each Borrower shall, and shall cause its Subsidiaries to, comply with the Collateral and Guarantee Requirement and Sections 6.10 and 6.12, (determined iii) no portion of such Indebtedness shall mature, and no scheduled principal payments in respect thereof shall be payable (other than customary amortization payments), prior to the Latest Maturity Date, and (iv) at the time of the Incurrence thereof and after giving Pro Forma Effect thereto and the use of the proceeds thereof, the Interest Coverage Ratio (calculated on a Pro Forma Basis Basis) is either (x) not less than 2.00:1.00 or (y) greater than or equal to the Interest Coverage Ratio of Holdings immediately prior to such transactions;
(u) [reserved];
(v) [reserved];
(w) Indebtedness of Holdings or any Restricted Subsidiary, so long as (i) the Payment Conditions shall have been satisfied at the time of Incurrence thereof after giving effect thereto, (ii) the maturity date of such Indebtedness is after the Latest Maturity Date and (iii) no scheduled principal payments are payable in accordance respect of such Indebtedness prior to the Latest Maturity Date (other than customary amortization payments);
(x) Guarantee Obligations Incurred in the ordinary course of business in respect of obligations to suppliers, lessors, licensees or sublicensees; provided that any such Guarantee Obligations described in Section 7.03(d) shall be subject to the proviso set forth therein;
(y) unsecured Indebtedness in respect of obligations of Holdings or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with Section 1.09such 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;
(z) Indebtedness arising from agreements of Holdings or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations (including earn-outs), in each case determined at entered into in connection with Permitted Acquisitions, other Investments and the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds Disposition of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtednessbusiness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)assets or Equity Interests permitted hereunder;
(xaa) [reserved];
(bb) [reserved]; and
(cc) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(bb) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (cc) above, Holdings shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that (i) all Indebtedness outstanding under the Loan Documents will be deemed to have been Incurred in reliance only on the exception in clause
(a) of this Section 7.03, (ii) for purposes of determining whether an item of Indebtedness meets the criteria of any category of Indebtedness described in clauses (a) through (cc) above at the time of any reclassification thereof, the portion of such item of Indebtedness to be reclassified will be deemed to have been Incurred on the date of such reclassification and (iii) any Lien securing any item of Indebtedness that is reclassified must be permitted under Section 7.01 after giving effect to such reclassification.
Appears in 2 contracts
Sources: Abl Credit Agreement (King Digital Entertainment PLC), Abl Credit Agreement (King Digital Entertainment PLC)
Indebtedness. CreateThe Borrower shall not, nor shall it permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding on the Closing Effective Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Effective Date and any Permitted Refinancing thereof; provided provided, that (x) any such intercompany Indebtedness shall be evidenced by an Intercompany Note and (y) any intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Notesubordination provisions reasonably acceptable to the Required Lenders;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder; provided that (Ai) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing ABL Facility Indebtedness, any Tranche B-2 Term Loan Facility Indebtedness, any UST Tranche A Term Loan Facility Indebtedness, any Junior Financing, any Permitted Additional Debt or Specified Junior Financing Obligation any Permitted Refinancing of any of the foregoing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth hereinherein (provided further that, clause (Bi) shall not apply in the case of a Guarantee by any Foreign Subsidiary that is not a Loan Party of any Indebtedness of another Foreign Subsidiary that is not a Loan Party), and (ii) if the Indebtedness being Guaranteed is subordinated Junior Financing that is, or is required by this Agreement to the Obligationsbe, Subordinated Indebtedness, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms (taken as a whole) at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Junior Financing;
(d) Indebtedness (other than Indebtedness permitted under Section 7.03(b)) of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent consisting of a Loan Party which is substantially contemporaneously transferred to a Guaranty on behalf of any Loan Party or any other Restricted Subsidiary of a Loan PartySubsidiary) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii7.02 (other than clause (v) thereof); provided that (x) no all such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement an Intercompany Note and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the subordination terms substantially consistent with provisions reasonably acceptable to the terms of the Intercompany NoteRequired Lenders;
(e) (i) Attributable Indebtedness and other Indebtedness of the Borrower or any Restricted Subsidiary (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) not to exceed $25,000,000 at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtednessoutstanding;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities (including fuel) pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited permitted hereunder; provided , provided, that (iw) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or Investment, and any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtednessthereof, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 such Indebtedness and 25% of Consolidated EBITDA all Indebtedness resulting from a Permitted Refinancing thereof is unsecured (determined on a Pro Forma Basis in accordance with except for Liens permitted by Section 1.09) plus 7.01(s)), and (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii)both immediately prior and after giving effect thereto, (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B1) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) therefrom, and (C2) immediately after giving effect to the aggregate principal amount at any time outstanding related Permitted Acquisition or Investment and the assumption of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed Indebtedness, the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence Total Leverage Ratio, on a Pro Forma Basis, for the Test Period most recently ended shall not be greater than 3.00:1.00;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business and other obligations and liabilities arising under employee benefit plans in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06[reserved];
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition expressly permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts and holdbacks) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting servicestreasury, automatic depository, credit card, debit card and cash management services or automated clearinghouse arrangementstransfer of funds, overdraft protections, employee credit card programs and other cash management and or any similar arrangements services incurred in the ordinary course of business or any similar cash management services relating or secured pursuant to the ABL Facility and any Guarantees thereof or ▇▇▇▇▇▇ related to 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, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceABL Facility;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(nl) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangementsarrangements that do not constitute Guarantees, in each case, in the ordinary course of business;
(om) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of businessbusiness and not in connection with the borrowing of money, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness incurred in the ordinary course of business with respect to reimbursement-type obligations regarding workers compensation claims;
(pn) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practicepractice and not in connection with the borrowing of money or Swap Contracts;
(qo) letters of credit issued in currencies not available hereunder in an aggregate amount at (x) (i) ABL Facility Indebtedness and (ii) any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Permitted Refinancing thereof, in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness case, of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such IndebtednessParties; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, that the aggregate principal amount outstanding at any time of all such Indebtedness shall not exceed an amount so long as on under clauses (i) and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v7.03(o)(x) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);Section
Appears in 1 contract
Indebtedness. CreateThe Borrower will not, and will not permit any Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party created under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Credit Documents;
(b) (x) Indebtedness outstanding on of the Closing Date and listed on Schedule 7.03(b) and Borrower or any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on Subsidiary owing to the Closing Date and Borrower or any Permitted Refinancing thereofother Subsidiary; provided that (i) such Indebtedness shall not have been transferred to any Person other than the Borrower or any Subsidiary and (ii) any such intercompany Indebtedness of owing by any Loan Credit Party owed to any Restricted a Subsidiary that is not a Loan Credit Party shall be unsecured and subordinated to the Obligations pursuant to on terms customary for intercompany subordinated Indebtedness, as reasonably determined by the Intercompany NoteAdministrative Agent;
(c) Guarantees by the Borrower and or any Restricted Subsidiary in respect of any Indebtedness of the Borrower or any Restricted Subsidiary otherwise other Subsidiary, other than (i) Guarantees of Permitted Subordinated Indebtedness if such Guarantees are not permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee the definition of the Obligations on the terms set forth herein, (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness term “Permitted Subordinated Indebtedness” and (Cii) any Guarantee by a Loan Party Guarantees of Indebtedness of a Restricted Subsidiary that is referred to in clause (e) below if such Guarantees are not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)such clause;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Capital Lease Obligations, (ii) Indebtedness and other Indebtedness (including Capitalized Leases) financing an incurred to finance the acquisition, construction, repair, replacement, lease construction or improvement of a any fixed or capital asset incurred by assets or assumed in connection with the Borrower or acquisition of any Restricted Subsidiary prior to or within 270 days after the acquisitionsuch assets, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (iiiii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
clause (i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment); provided that (A) the aggregate principal amount of Sale/Leaseback Transactions and Refinancing Indebtedness in respect thereof shall not exceed $750,000,000 and (B) the aggregate amount of Indebtedness incurred in reliance on this subsection (d) shall not exceed $3,000,000,000 at any time outstanding (exclusive of the amount of the Capital Lease Obligations in respect of the Borrower’s headquarters complex and any Refinancing Indebtedness in respect thereof) and (C) in the case of any Indebtedness referred to in clause (ii) above, such Indebtedness is incurred prior to or within 270 days after such acquisition or the completion of such construction or improvement and the principal amount of such Indebtedness does not exceed the cost of Subsidiaries acquiring, constructing or improving such fixed or capital assets;
(e) Indebtedness of any Person that are non-Loan Parties incurred pursuant to 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, and Refinancing Indebtedness in respect thereof; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary (or is so merged or consolidated) and is not created in contemplation of or in connection with such Person becoming a Subsidiary (or such merger or consolidation) and (ii) the aggregate principal amount of Indebtedness permitted by this Section 7.03(vclause (e) shall not exceed the greater $500,000,000 at any time outstanding;
(f) Indebtedness owed in respect of overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing-house transfers of funds;
(xg) $9,750,000 and Permitted Subordinated Indebtedness; and
(yh) 15% of Consolidated EBITDA other Indebtedness of the Borrower (determined on a Pro Forma Basis or any Subsidiary; provided that the aggregate principal amount of such Indebtedness, together with the aggregate principal amount of Indebtedness referred to in accordance with Section 1.09Sections 6.01(a), in each case determined at the time of incurrence 6.01(d) and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v6.01(e), (A) with respect to shall not exceed $10,000,000,000 at any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtednesstime outstanding.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Sources: Credit Agreement (Facebook Inc)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) (i) Indebtedness of any Loan Party under the Loan Documents and (including any ii) Indebtedness incurred pursuant by the Borrower under the Revolving Credit Agreement and any Permitted Refinancings of such Indebtedness incurred under this clause (a)(ii); provided that the outstanding aggregate principal amount of all Indebtedness incurred or issued under this clause (a)(ii) shall not exceed the sum of (x) the aggregate amount of Commitments (as defined in the Revolving Credit Agreement) as of the date hereof plus (y) the aggregate amount of Incremental Commitments (as defined in the Revolving Credit Agreement) permitted to be incurred by the Borrower under Section 2.14 or 2.15)of the Revolving Credit Agreement as in effect on the date hereof;
(b) Indebtedness (xi) Indebtedness outstanding on the Closing Date and listed on in Schedule 7.03(b) hereto and any Permitted Refinancing refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing refinancing thereof, of which any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that any all such intercompany Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, herein and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the an Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of $13,000,000 52,000,000 and 202.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Total Assets, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary incurred to finance or assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited permitted hereunder; provided that (i) solely in the case of such assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or Investment, and any Permitted Refinancing thereof or (ii) thereof; provided further that, after giving Pro Forma Effect pro forma effect to such Permitted Acquisition or other Investment and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness does not exceed (x) $50,000,000 at any time outstanding does not exceed outstanding, plus (y) any additional amount of such Indebtedness so long as (i) if such Indebtedness is secured, the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (Secured Leverage Ratio determined on a Pro Forma Basis is no greater than 4.00:1.00 or (ii) if such Indebtedness is unsecured, the Fixed Charge Coverage Ratio determined on a Pro Forma Basis is no less than either (A) 2.00:1.00 or (B) the Fixed Charge Coverage Ratio immediately prior to the consummation of the Permitted Acquisition or other Investment and the incurrence of such Indebtedness; provided that (I) if any Indebtedness incurred to finance such Permitted Acquisition or other Investment is in accordance the form of term loans secured on a pari passu basis with Section 1.09the Loans (other than customary bridge loans or term A loan facilities as determined by the Borrower in good faith), be subject to the MFN Protection (but subject to the MFN Trigger Amount and the MFN Sunset exceptions to such MFN Protection) plus as if such Indebtedness were an Incremental Term Loan and (II) in the case of clause (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(s), does not exceed in the aggregate at any time outstanding the greater than 4.25:1:00of $110,000,000 and 4.25% of Total Assets, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 110,000,000 and 354.25% of Consolidated EBITDATotal Assets;
(n) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters Indebtedness in respect of credit issued in currencies not available hereunder in an aggregate amount at the (i) Unsecured Notes Due 2020 (including any time outstanding not to exceed $5,000,000guarantees by the Guarantors thereof) and any Permitted Refinancing thereof, (ii) Unsecured Notes Due 2023 (including any guarantees by the Guarantors thereof) and any Permitted Refinancing thereof, (iii) Secured Notes Due 2019 (including any guarantees by the Guarantors thereof) and any Permitted Refinancing thereof, (iv) Secured 7.875% Notes Due 2022 (including any guarantees by the Guarantors thereof) and any Permitted Refinancing thereof and (v) Secured 8.875% Notes Due 2022 (including any guarantees by the Guarantors thereof) and any Permitted Refinancing thereof;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted any Subsidiary of the Borrower that is not a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (r) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 52,000,000 and 152.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Total Assets, in each case determined at the time of incurrence;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is by a Loan Party that complies with clauses (a)Foreign Subsidiary which, (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security when aggregated with the Obligations, the aggregate principal amount of such all other Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(vclause (u) shall and then outstanding, does not exceed the greater of (x) $9,750,000 260,000,000 and (y) 1510.0% of Consolidated EBITDA Total Assets (excluding, solely when calculating Total Assets for purposes of this Section 7.3(u), the Borrower (determined on assets of any Person that is not a Pro Forma Basis in accordance with Section 1.09Foreign Subsidiary), in each case determined at the time of incurrence incurrence;
(v) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings and Limited Originator Recourse) to the Borrower or any of the Restricted Subsidiaries;
(w) Indebtedness, Disqualified Equity Interests or Preferred Stock of the Borrower or any Restricted Subsidiary in an aggregate principal amount or liquidation preference up to 100% of the net cash proceeds received by the Borrower since immediately after the Closing Date from the issue or sale of Equity Interests of the Borrower or cash contributed to the capital of the Borrower (in each case, other than Excluded Contributions, proceeds of Disqualified Equity Interests or sales of Equity Interests to the Borrower or any of its Subsidiaries) as determined in accordance with clauses (a) and (b) of the definition of “Cumulative Credit” to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments pursuant to Section 7.06 hereof or to make Investments pursuant to Section 7.02 (other than clauses (a) and (c) thereof);
(i) secured Indebtedness (“Incremental Equivalent Secured Debt”), in an aggregate principal amount under this clause (x), when aggregated with the amount of Incremental Loans incurred pursuant to Section 2.14(d)(v) and Incremental Equivalent Unsecured Debt incurred pursuant to Section 7.03(y), not to exceed the Available Incremental Amount, so long as (a) if the proceeds of such Indebtedness are being used to finance a Permitted Acquisition, Investment, or irrevocable repayment, repurchase or redemption of any Indebtedness, no Event of Default under Sections 8.01(a) or (f) with respect to Holdings or the Borrower shall have occurred and be continuing or would exist after giving effect to such Indebtedness, or (b) if otherwise, no Event of Default shall have occurred and be continuing or would exist after giving effect to such Indebtedness; provided that such Indebtedness shall(A) in the case of Incremental Equivalent First Lien Debt, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred and, in the case of Incremental Equivalent Junior Debt, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred (and in each case subject to the Permitted Earlier Maturity Indebtedness Exception); provided that the foregoing requirements of this clause (A) shall not apply to the extent such Indebtedness constitutes (i) a customary bridge facility, so long as the long-term Indebtedness into which such customary bridge facility is to be converted or exchanged satisfies the requirements of this clause (A) and such conversion or exchange is subject only to conditions customary for similar conversions or exchanges or (ii) term loan A facilities (as determined by the Borrower in good faith), (B) in the case of Incremental Equivalent First Lien Debt, have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities and, in the case of Incremental Equivalent Junior Debt, shall not be subject to scheduled amortization prior to maturity (and in each case subject to the Permitted Earlier Maturity Indebtedness Exception); provided that the foregoing requirements of this clause (B) shall not apply to the extent such Indebtedness constitutes (i) a customary bridge facility, so long as the long-term Indebtedness into which such customary bridge facility is to be converted or exchanged satisfies the requirements of this clause (B) and such conversion or exchange is subject only to conditions customary for similar conversions or exchanges or (ii) term loan A facilities (as determined by the Borrower in good faith), (C) if such Indebtedness is secured on a term loan that is not subordinated in right of payment to the Loan Documents and that is secured junior Lien basis by a Lien on the Collateral that ranks pari passu in right of security Loan Party with the Term Loansrespect to Collateral, the Term Loans shall be subject to the “most favored nation” pricing adjustment Junior Lien Intercreditor Agreement and, otherwise, be subject to the Closing Date Intercreditor Agreement, (if applicableD) set forth in the proviso case of Incremental Equivalent First Lien Debt in the form of term loans (other than customary bridge loans or term loan A facilities (as determined by the Borrower in good faith)), be subject to Section 2.14(e)(iiithe MFN Protection (but subject to the MFN Trigger Amount and the MFN Sunset exceptions to such MFN Protection) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes and (E) have terms and conditions (other than (x) pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions and (y) covenants or other provisions applicable only to periods after the Latest Maturity Date at the time of incurrence of such Indebtedness and to the extent any financial maintenance covenant is added for the benefit of such Incremental Equivalent Secured Debt, to the extent that such financial maintenance covenant is also added for the benefit of each Facility remaining outstanding after the incurrence or issuance of such Incremental Equivalent Secured Debt) that in the good faith determination of the calculations in this Section 7.03(v), Borrower (Ai) with respect to any Revolving Credit Commitments, are not materially less favorable (when taken as a borrowing of the maximum amount of Loans available thereunder shall be assumed and (Bwhole) to the extent Borrower than the proceeds terms and conditions of the Loan Documents (when taken as a whole) or (ii) reflect market terms and conditions (taken as a whole) at the time of incurrence or issuance (provided that a certificate of the Borrower as to the satisfaction of the conditions described in this clause (E) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the materials terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (E), shall be conclusive;
(i) Indebtedness that is unsecured (or that is not secured by the Collateral) (“Incremental Equivalent Unsecured Debt”) of Holdings, the Borrower or any Indebtedness incurred Restricted Subsidiary in an aggregate principal amount under this clause (y), and when aggregated with the amount of Incremental Loans and pursuant to Section 7.03(v2.14(d)(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness and Incremental Equivalent Secured Debt incurred pursuant to Section 7.03(v);
7.03(c) not to exceed the Available Incremental Amount, so long as (x) all premiums (if any)the proceeds of such Indebtedness are being used to finance a Permitted Acquisition, interest (including post-petition interest)Investment, feesor irrevocable repayment, expensesrepurchase or redemption of any Indebtedness, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);no Event of Default under Secti
Appears in 1 contract
Indebtedness. CreatePermit any Restricted Subsidiary of the Borrower to, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) other Indebtedness (xi) Indebtedness outstanding on the Closing Date date hereof and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Notedate hereof;
(c) Guarantees by the Borrower and any Restricted Subsidiary Loan Party in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided PROVIDED that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Guaranty and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness;
(Cd) any Guarantee by a Loan Party of Indebtedness of a any Restricted Subsidiary that is not a Loan Party shall only be permitted owing to the Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided PROVIDED that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Noteset forth in Exhibit H;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; PROVIDED that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and construction, repair, replacement or improvement, (ii) Attributable Indebtedness arising out of sale-sale and leaseback transactions permitted by Section 7.05(m7.05(f) and (iii) any Permitted Refinancing of such Attributable Indebtednessany Indebtedness set forth in the immediately preceding clauses (i) and (ii);
(f) Indebtedness assumed in connection with any Permitted Acquisition together with any Permitted Refinancing thereof; PROVIDED that (i) such Indebtedness is not incurred in contemplation of such Permitted Acquisition and (ii) both immediately prior to and after giving effect to the assumption of such Indebtedness and the incurrence of all Indebtedness resulting from any Permitted Refinancing thereof, (A) no Default shall have occurred and be continuing and (B) the Borrower and the Restricted Subsidiaries shall be in Pro Forma Compliance with the covenants set forth in Section 7.09;
(g) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s interest rates or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basispurposes;
(h) Indebtedness representing deferred compensation to consultants, employees or independent agents of Holdings or any of its the Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries Loan Party to current or former officers, managersdirectors, consultantsindependent agents, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings (or, after a Qualified IPO, the Borrower) permitted by Section 7.067.06 and any Permitted Refinancing thereof;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(m) other Indebtedness of Restricted Subsidiaries that, when aggregated with the aggregate outstanding Indebtedness of the Borrower and the Restricted Subsidiaries secured by Liens permitted pursuant to Section 7.01(y) and the aggregate sale price of the assets sold in an aggregate principal amount that sale and leaseback transactions permitted pursuant to Section 7.05(f), shall at the no time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 357.5% of Consolidated EBITDATotal Assets;
(n) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in an amount not to exceed the ordinary course lesser of business$75,000,000 and the premiums with respect to the applicable insurance policies;
(o) Indebtedness incurred by the Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts guarantees or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; PROVIDED that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(sr) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness respect of the Borrower or any of its Restricted Subsidiaries that is a Student Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited Credit Facilities in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the an aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal up to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount $150,000,000 at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.outstanding; and
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(xs) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(r) above.
Appears in 1 contract
Sources: Credit Agreement (Uici)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (x) Indebtedness outstanding on the Closing Date and (i) not in excess of $500,000 in the aggregate (when taken together with all other indebtedness outstanding in reliance on this clause (b)(i)) or (ii) listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the any Borrower and or any other Restricted Subsidiary of the Parent in respect of Indebtedness of the any Borrower or any Restricted Subsidiary otherwise permitted hereunder (and cross-guarantees of guarantees by the Parent of Indebtedness of any Borrower or any Restricted Subsidiary of Indebtedness otherwise permitted hereunder); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, herein and (B) if the Indebtedness being Guaranteed is subordinated in right of payment to the Obligations, such Guarantee shall be subordinated in right of payment to the Guarantee of the Obligations on terms (taken as a whole) at least as favorable (as reasonably determined by the Lead Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the any Borrower or any other Restricted Subsidiary of the Parent owing to any Loan Party (other than the Parent) or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party (other than the Parent) which is substantially contemporaneously transferred to a Loan Party (other than the Parent) or any Restricted Subsidiary of the Parent that is a Loan Party) but only, ); provided that in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting Party such Indebtedness (x) is an Investment permitted by Section 7.02(c)(iii), (y) consists of any part of a Permitted IPO Reorganization or Permitted Tax Restructuring or (z) is in an amount not to exceed the greater of $1,500,000 or 15% of Consolidated EBITDA as of the last day of the most recently ended Test Period (calculated on a Pro Forma basis); provided provided, further, that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with with, and subject to, the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the any Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset thereof in an aggregate amount not to exceed the greater of $13,000,000 2,000,000 and 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period (determined calculated on a Pro Forma Basis in accordance with Section 1.09Basis), in each case case, determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding outstanding, and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable IndebtednessIndebtedness in an aggregate amount not to exceed the greater of $1,500,000 and 15% of Consolidated EBITDA as of the last day of the most recently ended Test Period (calculated on a Pro Forma Basis) at any time under this clause (e)(ii);
(f) Indebtedness in respect of Swap Contracts designed to hedge against the any Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the any Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; permitted by Section 7.02 or Capital Expenditures (provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, thereof); provided that the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 2,000,000 and 2520% of Consolidated EBITDA as of the last day of the most recently ended Test Period (determined calculated on a Pro Forma Basis in accordance with Section 1.09Basis) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00at any time outstanding; provided, in each case determined at the time of such assumption or incurrencefurther, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at of any time outstanding of such Indebtedness of assumed under this clause (g) by any Restricted Subsidiaries Subsidiary that are non-is not a Loan Parties incurred pursuant to this Section 7.03(g) Party shall not exceed the greater of (x) $9,750,000 1,000,000 and (y) 1510% of Consolidated EBITDA as of the Borrower determined at last day of the time of such incurrence most recently ended Test Period (calculated on a Pro Forma Basis) at any time outstanding;
(h) Indebtedness representing deferred compensation or similar arrangements to employees of Holdings the Borrowers or any of its the Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings any Borrower or any of its the other Restricted Subsidiaries of the Parent to current or former officers, managers, consultants, advisors, directors and employees, their respective estates, spouses or former spouses of Parent (or any direct or indirect parent thereof) and any Restricted Subsidiary to finance the purchase or redemption of Equity Interests of Holdings the Lead Borrower or any direct or indirect parent of Holdings the Lead Borrower permitted by Section 7.06;
(j) Indebtedness incurred by Holdings any Borrower or any of its the other Restricted Subsidiaries of the Parent in connection with the Transactions, a Permitted Acquisition, any other Investment permitted hereunderInvestment, merger or any Disposition permitted hereunder or transaction with Affiliates permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of deferred purchase price (including earn-outsouts and seller paper) or other similar adjustmentsadjustments which, solely in the case of seller paper, shall not exceed the greater of $2,000,000 and 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period (calculated on a Pro Forma Basis) at any time outstanding;
(k) Indebtedness consisting of obligations of Holdings any Borrower or any of its the other Restricted Subsidiaries of the Parent under deferred compensation or other similar arrangements (in each case other than in respect of deferred purchase price (including, without limitation, earn-outs and seller paper)) incurred by such Person in connection with the Transactions, Permitted Acquisitions Acquisitions, transactions with Affiliates or any other Investment Investment, in each case, permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 1,500,000 and 3515% of Consolidated EBITDAEBITDA as of the last day of the most recently ended Test Period (calculated on a Pro Forma Basis);
(n) 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;
(o) Indebtedness incurred by the any Borrower or any of its the other Restricted Subsidiaries of the Parent in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of self-insurance, performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the any Borrower or any of its the other Restricted Subsidiaries of the Parent or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practicepractice or to the extent required by Laws or pursuant to any statutory filing;
(q) letters of credit (i) issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,0002,000,000, (ii) constituting trade letters of credit in an aggregate amount at any time outstanding not to exceed $500,000 and (iii) in additional amounts to the extent the extent the issuance thereof is accompanied by a simultaneous permanent reduction in Revolving Commitments in an amount equal to the maximum face value of such letter of credit;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit[Reserved];
(s) Indebtedness incurred by a Restricted Subsidiary Permitted Ratio Debt and any Permitted Refinancing thereof; provided that, with respect to any such Permitted Ratio Debt and/or Permitted Refinancing thereof that is secured on a non-Loan Party which, when aggregated pari passu basis with the principal amount of all other Indebtedness incurred pursuant Obligations, the Lenders party to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined Agreement at the time of incurrencethe proposed incurrence of any such Permitted Ratio Debt or Permitted Refinancing thereof shall have the right, on a pro rata basis, to make an initial offer with respect to any such Permitted Ratio Debt or Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness; provided that, with respect to any such Credit Agreement Refinancing Indebtedness that is secured on a pari passu basis with the Obligations, the Lenders party to this Agreement at the time of the proposed incurrence of any such Credit Agreement Refinancing Indebtedness shall have the right, on a pro rata basis, to make an initial offer with respect to any such Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of a Subsidiary of the Borrower or any of its Restricted Subsidiaries that is Parent (other than a Loan Party that complies with clauses (a), (cParty) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on outstanding not to exceed the greater of $2,000,000 and 20% of Consolidated EBITDA as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as last day of the date of such incurrence the Consolidated Secured Net Leverage Ratio most recently ended Test Period (determined calculated on a Pro Forma Basis) is no more than at any time outstanding;
(v) [reserved];
(w) Indebtedness in respect of Other Term Loans and Other Notes incurred or issued in accordance with Section 2.14 (and Permitted Refinancings thereof);
(x) 4.00:1.00 or Incremental Loans and Revolving Commitment Increases incurred in accordance with Section 2.14 and Permitted Refinancings thereof;
(y) to Indebtedness of any Borrower and any other Restricted Subsidiaries of the extent incurred Parent in respect of any Supplier Financing Facilities in the ordinary course of business;
(z) Indebtedness (a) of any Securitization Subsidiary arising under any Qualified Securitization Financing at any time, (b) of any Borrower or any other Restricted Subsidiary of the Parent arising under any Receivables Facility or (c) in connection with a Permitted Acquisition or other Investment permitted hereunder, accounts receivable factoring facilities in the greater ordinary course of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investmentbusiness; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(vclause (z) shall not exceed the greater of $2,500,000 and 25% of Consolidated EBITDA as of the last day of the most recently ended Test Period (xcalculated on a Pro Forma Basis) at any time outstanding;
(aa) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.18; provided that, with respect to any such Permitted Debt Exchange Notes that are secured on a pari passu basis with the Obligations, the Lenders party to this Agreement at the time of the proposed incurrence of any such Permitted Debt Exchange Notes shall have the right, on a pro rata basis, to make an initial offer with respect to any such Permitted Debt Exchange Notes;
(bb) Indebtedness to the seller of any business or assets permitted to be acquired by the Parent or any Restricted Subsidiary under this Agreement; provided that the aggregate amount of Indebtedness permitted under this clause (bb) shall not exceed the greater of $9,750,000 1,500,000 and (y) 15% of Consolidated EBITDA of for the Borrower most recently ended Test Period (determined calculated on a Pro Forma Basis Basis) outstanding at any time; provided, further, that, other than Indebtedness in accordance with Section 1.09)an amount not to exceed the greater of $1,000,000 and 10% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any time outstanding, in each case determined at the time of incurrence and (B) provided that if such Indebtedness contains subordination terms (or is subject to a term loan that is subordination agreement in favor of the Administrative Agent and Lenders) acceptable to each of the Lead Borrower and the Administrative Agent in its reasonable discretion;
(cc) obligations in respect of Disqualified Equity Interests and preferred Equity Interests in an amount not subordinated in right to exceed the greater of payment $1,000,000 and 10% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) outstanding at any time;
(dd) Indebtedness consisting of management fees to any Sponsor payable pursuant to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment Management Agreement;
(if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (Bee) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay constituting Indebtedness, Guarantees in the ordinary course of business of the obligations of suppliers, customers, franchisees and licensees of the Borrowers and the other Restricted Subsidiaries of the Parent in an aggregate amount not to exceed at any time outstanding the greater of $1,000,000 and 10% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(vBasis);
(xff) Indebtedness in an amount not to exceed at any time outstanding the Excluded Contribution Amount; and
(gg) to the extent constituting Indebtedness, all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(ff) above. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, plus the aggregate amount of fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including OID) incurred in connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Parent dated such date prepared in accordance with GAAP. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from
Appears in 1 contract
Sources: Credit Agreement (Redwire Corp)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of Parent and any Loan Party of its Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) Indebtedness (xi) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date Date;
(c) Guarantees by Parent and any Permitted Refinancing thereof; provided that any such intercompany the Restricted Subsidiaries in respect of Indebtedness of Parent or any Loan Party owed to any Restricted Subsidiary otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees may not, by the Borrower and any virtue of this Section 7.03(c), Guarantee Indebtedness that such Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing High Yield Note, Second Lien Facility, New Senior Secured Notes or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Guaranty and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness;
(Cd) any Guarantee by a Loan Party of Indebtedness of a Parent or any Restricted Subsidiary that is not a Loan Party shall only be permitted owing to Parent or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) that, all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms set forth in Section 5.03 of the Intercompany NoteSecurity Agreement;
(e) so long as the Borrower is in compliance with the Senior Secured First Lien Incurrence Test (calculated after giving Pro Forma Effect to the incurrence of such Indebtedness), (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and construction, repair, replacement or improvement, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m7.05(f) and (iii) any Permitted Refinancing of such Attributable Indebtednessany Indebtedness set forth in the immediately preceding clauses (i) and (ii);
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary (i) assumed or incurred in connection with any Permitted Acquisition or other Investment (ii) incurred to finance a Permitted Acquisition, in each case, that is secured only by the assets or business acquired in the applicable Permitted Acquisition (including any acquired Equity Interests) and so long as both immediately prior and after giving effect thereto, (A) no Default shall exist or result therefrom, and (B) the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this paragraph (g) does not prohibited hereunderexceed $325,000,000;
(i) Indebtedness of any Restricted Subsidiary (A) assumed in connection with any Permitted Acquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) incurred to finance a Permitted Acquisition or other Investment or and (ii) any Permitted Refinancing of the foregoing; provided, in each case that such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (w) is unsecured or is subordinated to the Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Notes Indenture as of the Closing Date, (iix) both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom and (2) the Total Leverage Ratio (calculated after giving Pro Forma Effect to the assumption or incurrence of such Permitted Acquisition Indebtedness) shall not be greater than 6.50 to 1.00, (y) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the Latest Maturity Date of the Term Loans outstanding at such time (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemptions provisions satisfying the requirement of clause (z) hereof) and (z) has terms and conditions (other than interest rate and redemption premiums), taken as a whole, that are not materially less favorable to the Borrower as the terms and conditions of the Senior Subordinated Notes as of the Closing Date; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, as applicable, together with a reasonably detailed description of the aggregate amount material terms and conditions of such Indebtedness at any time outstanding does not exceed or drafts of the sum documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrower within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees); provided further that notwithstanding anything contained in the Loan Documents to the contrary, (xa) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness only obligors with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to clause (A) of this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower paragraph or any Permitted Refinancing of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) Indebtedness in respect thereof shall be of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount those Persons who were obligors of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (IIb) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are nonNon-Loan Parties incurred may not incur Indebtedness pursuant to this Section 7.03(vclause (h) shall not exceed the greater in an aggregate outstanding amount in excess of (x) $9,750,000 and (y) 155% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)Foreign Subsidiary Total Assets;
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding existing on the Closing Date and listed date hereof set forth on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofdate hereof; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant subject to the Intercompany NoteSubordination Agreement;
(ci) Guarantees by Holdings, the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any of the Restricted Subsidiaries otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party 122 J. Crew Term Loan Credit Agreement Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Guaranty and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (Cii) any Guarantee Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a would have been permitted as an Investment by such Loan Party shall only be permitted to the extent constituting an Investment permitted by in such Restricted Subsidiary under Section 7.02(c)(iii7.02(c);
(d) Indebtedness of the Borrower or any of the Restricted Subsidiary Subsidiaries owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany NoteSubordination Agreement;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any and the Restricted Subsidiary prior to or within 270 days after Subsidiaries financing the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding construction, repair, replacement or improvement and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and transactions, and, in each case, any Permitted Refinancing thereof; provided that the aggregate principal amount of such Attributable IndebtednessIndebtedness at any one time outstanding incurred pursuant to this clause (e) shall not exceed the greater of $50,000,000 and 1.75% of Total Assets, in each case determined at the time of incurrence;
(f) Indebtedness in respect of Swap Contracts designed to hedge against Holdings’, the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the date hereof, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary (other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the date hereof) and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 7.01(p) and, in each case, any Permitted Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary incurred or assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that is secured only by Liens permitted under Section 7.01(p) (iand any Permitted Refinancing of the foregoing) solely in and so long as the case aggregate principal amount of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or and all Indebtedness resulting from any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding pursuant to clause (g)(ii) does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis50,000,000;
(h) Term Loan Refinancing Debt;
(i) Indebtedness representing deferred compensation to employees of Holdings or any of the Borrower and its Restricted Subsidiaries incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.06;
(jk) Indebtedness incurred by Holdings the Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of obligations of Holdings or any of its the Borrower and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(mn) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount that at the any time of, and after giving effect to, the incurrence thereof, would outstanding not to exceed the greater of $22,750,000 100,000,000 and 353.25% of Consolidated EBITDATotal Assets, in each case determined at the time of incurrence; provided that a maximum of the greater of $25,000,000 and 1.00% of Total Assets in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties, in each case determined at the time of incurrence;
(no) 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;
(op) Indebtedness incurred by the Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
; 124 J. Crew Term Loan Credit Agreement (pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qi) letters of credit issued in currencies not available hereunder Indebtedness in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed $375,000,000 at any time outstanding under the face ABL Facilities and (ii) the amount of such Letter obligations in respect of Credit;
any Secured Hedge Agreement and any Secured Cash Management Agreement (sin each case, as defined in the ABL Credit Agreement) Indebtedness at any time outstanding and not incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount in violation of all other Indebtedness incurred pursuant to this Section 7.03(s7.03(f) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)and, in each case determined at the time respect of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (ci) and (d) (as applicable) of the Applicable Requirementsii), so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:Permitted Refinancing thereof;
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as respect of the date of such incurrence the Consolidated First Lien Net Leverage Ratio Senior Notes (determined on a Pro Forma Basis including any guarantees thereof) and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a any Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrenceRefinancing thereof;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Sources: Credit Agreement (J Crew Group Inc)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of Parent and any Loan Party of its Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) Indebtedness (xi) Indebtedness outstanding on the Closing Date date hereof and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date date hereof;
(c) Guarantees by Parent and any Permitted Refinancing thereof; provided that any such intercompany the Restricted Subsidiaries in respect of Indebtedness of Parent or any Loan Party owed to any Restricted Subsidiary otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees may not, by the Borrower and any virtue of this Section 7.03(c), Guarantee Indebtedness that such Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing High Yield Note, Second Lien Facility or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Guaranty and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness;
(Cd) any Guarantee by a Loan Party of Indebtedness of a Parent or any Restricted Subsidiary that is not a Loan Party shall only be permitted owing to Parent or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) that, all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms set forth in Section 5.03 of the Intercompany NoteSecurity Agreement;
(e) so long as the Borrower is in compliance with the Senior Secured First Lien Incurrence Test (calculated after giving Pro Forma Effect to the incurrence of such Indebtedness), (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and construction, repair, replacement or improvement, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m7.05(f) and (iii) any Permitted Refinancing of such Attributable Indebtednessany Indebtedness set forth in the immediately preceding clauses (i) and (ii);
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary (i) assumed or incurred in connection with any Permitted Acquisition or other Investment (ii) incurred to finance a Permitted Acquisition, in each case, that is secured only by the assets or business acquired in the applicable Permitted Acquisition (including any acquired Equity Interests) and so long as both immediately prior and after giving effect thereto, (A) no Default shall exist or result therefrom, and (B) the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this paragraph (g) does not prohibited hereunderexceed $325,000,000;
(i) Indebtedness of any Restricted Subsidiary (A) assumed in connection with any Permitted Acquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) incurred to finance a Permitted Acquisition or other Investment or and (ii) any Permitted Refinancing of the foregoing; provided, in each case that such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (w) is unsecured or is subordinated to the Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Notes Indenture as of the Closing Date, (iix) both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom and (2) the Total Leverage Ratio (calculated after giving Pro Forma Effect to the assumption or incurrence of such Permitted Acquisition Indebtedness) shall not be greater than 6.50 to 1.00, (y) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the Maturity Date of the Term Loans (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemptions provisions satisfying the requirement of clause (z) hereof) and (z) has terms and conditions (other than interest rate and redemption premiums), taken as a whole, that are not materially less favorable to the Borrower as the terms and conditions of the Senior Subordinated Notes as of the Closing Date; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, as applicable, together with a reasonably detailed description of the aggregate amount material terms and conditions of such Indebtedness at any time outstanding does not exceed or drafts of the sum documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrower within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees); provided further that notwithstanding anything contained in the Loan Documents to the contrary, (xa) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance only obligors with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of respect to any Indebtedness incurred pursuant to clause (ii), (A) such of this paragraph or any Permitted Refinancing of Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard respect thereof shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of those Persons who were obligors of such Indebtedness of immediately prior to such Permitted Acquisition and (b) Restricted Subsidiaries that are nonNon-Loan Parties incurred may not incur Indebtedness pursuant to this Section 7.03(gclause (h) shall not exceed the greater in an aggregate outstanding amount in excess of (x) $9,750,000 and (y) 155% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma BasisForeign Subsidiary Total Assets;
(hi) Indebtedness representing deferred compensation to employees of Holdings or any of its the Borrower and the Restricted Subsidiaries incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings Parent permitted by Section 7.06;
(jk) Indebtedness incurred by Holdings or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of obligations of Holdings or any of its Parent and the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(mn) Indebtedness in an aggregate principal amount not to exceed $800,000,000 at any time outstanding; provided that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater a maximum of $22,750,000 and 35% 650,000,000 in aggregate principal amount of Consolidated EBITDAsuch Indebtedness may be incurred by Non-Loan Parties;
(no) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Borrower Parent or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qr) letters Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to Parent or any of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000its Restricted Subsidiaries;
(rs) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(st) Indebtedness in respect of the High Yield Notes and any Permitted Refinancing thereof;
(i) Indebtedness under a Second Lien Facility in an aggregate principal amount not to exceed $350,000,000 at any time outstanding; provided that at the time of the incurrence of such Indebtedness and after giving Pro Forma Effect thereto, no Default exists or would result therefrom, and (ii) Permitted Refinancings in respect thereof; provided that the amount of Indebtedness incurred pursuant to this clause (u) shall reduce on a dollar-for-dollar basis the Incremental Availability; and
(v) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (v) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 and 155% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Foreign Subsidiary Total Assets, in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such which Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) be secured only to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investmentby Section 7.01(n); provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.and
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(v) above. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Company and any Loan Party of its Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date Date;
(c) Guarantee Obligations of the Company and any Permitted Refinancing thereof; provided that any such intercompany the Restricted Subsidiaries in respect of Indebtedness of the Company or any Loan Party owed to any Restricted Subsidiary otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees may not, by the Borrower and any virtue of this Section 7.03(c), guarantee Indebtedness that such Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 7.03); provided that (A) no Guarantee by Obligations of any Restricted Subsidiary of any Indebtedness constituting a junior lien financing Existing Note, New Note, or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Guaranty and (B) if the Indebtedness being Guaranteed guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Subject to Section 7.02(c), Indebtedness of the Borrower Company or any Restricted Subsidiary owing to any Loan Party the Company or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)Subsidiary; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) that, all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms set forth in Section 5.03 of the Intercompany NoteSecurity Agreement;
(e) So long as immediately after giving effect to the incurrence of any such Attributable Indebtedness or other Indebtedness, the Company and the Restricted Subsidiaries will be in Pro Forma Compliance with the covenant set forth in Section 7.11 as of the last day of the immediately preceding Test Period, (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and construction, repair, replacement or improvement, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m7.05(f) and (iii) any Permitted Refinancing of such Attributable Indebtednessany Indebtedness set forth in the immediately preceding clauses (i) and (ii);
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities commodity pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Company and the Restricted Subsidiary Subsidiaries (i) assumed or incurred in connection with any Permitted Acquisition or other Investment (ii) incurred to finance a Permitted Acquisition, in each case, that is secured only by the assets or business acquired in the applicable Permitted Acquisition (including any acquired Equity Interests) and so long as both immediately prior and after giving effect thereto, (A) no Default shall exist or result therefrom, (B) the Company and the Restricted Subsidiaries will be in Pro Forma Compliance with the covenant set forth in Section 7.11 as of the last day of the immediately preceding Test Period, and (C) the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this paragraph (g) does not prohibited hereunderexceed $40,000,000; provided that the aggregate amount of Indebtedness of Persons that are not Loan Parties incurred pursuant to, and outstanding at any time under, this clause (g) (and any Permitted Refinancing thereof) and clause (z) of Section 7.03(h) below shall not exceed $150,000,000 at any time outstanding;
(i) Indebtedness of the Company and the Restricted Subsidiaries (A) assumed in connection with any Permitted Acquisition; provided that (ix) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition and (y) the aggregate principal amount of all Indebtedness assumed in reliance on this sub-clause (A) (excluding for purposes of the basket calculation in this clause (y), however, any such Indebtedness that is unsecured and subordinated and otherwise satisfies the requirements of clauses (v), (w)(1), (x) and (y) of the proviso below) does not exceed $75,000,000 at any time outstanding, or other Investment or (B) incurred to finance a Permitted Acquisition and (ii) any Permitted Refinancing of either of the foregoing; provided, in each case that such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (v) is unsecured or is subordinated to the Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Notes Indenture as of the date of the issuance of the Senior Subordinated Notes, (iiw) both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom and (2) the Total Leverage Ratio (calculated on a Pro Forma Effect Basis) shall not be greater than 7.50 to 1.0, (x) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the Latest Maturity Date (it being understood that such Permitted Acquisition Indebtedness may have mandatory prepayment, repurchase or redemptions provisions satisfying the requirement of clause (y) hereof), (y) has terms and conditions (other than interest rate, redemption premiums and subordination terms), taken as a whole, that are not materially less favorable to the Company as the terms and conditions of the 2018 Notes as of the date of the issuance thereof; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, as applicabletogether with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Company has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Company within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees); and (z) with respect to such Indebtedness described in the immediately preceding clause (B), such Indebtedness is either incurred by the Company or a Guarantor or, if such Indebtedness is incurred by a Restricted Subsidiary that is not a Loan Party, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries Persons that are non-not Loan Parties incurred pursuant to to, and outstanding at any time under, this clause (z) (and any Permitted Refinancing thereof) and Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined 150,000,000 at the any time of such incurrence on a Pro Forma Basisoutstanding;
(hi) Indebtedness representing deferred compensation to employees of Holdings (or any of its direct or indirect parent thereof), the Company and the Restricted Subsidiaries incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Company (or any direct or indirect parent of Holdings thereof) permitted by Section 7.06;
(jk) Indebtedness incurred by Holdings the Company or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of obligations of Holdings the Company or any of its the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management automatic clearinghouse arrangements and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(mn) Indebtedness in an aggregate principal amount that not to exceed $150,000,000 at the any time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDAoutstanding;
(no) 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;
(op) Indebtedness incurred by the Borrower Company or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower Company or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qr) letters unsecured Indebtedness of credit issued the Company or any Restricted Subsidiary; provided that, (i) both immediately prior and after giving Pro Forma Effect to such incurrence (A) no Default shall exist or result therefrom and (B) the Total Leverage Ratio shall not be greater than 6.00 to 1.0 and (ii) if such Indebtedness is subordinated to the Obligations, it is done so on terms no less favorable to the Lenders than the subordination terms set forth in currencies the Senior Subordinated Notes Indenture as of the date of the issuance of the Senior Subordinated Notes; provided, further, that Restricted Subsidiaries that are not available hereunder Loan Parties may not incur Indebtedness pursuant to this clause (s) in an aggregate amount excess of $200,000,000 at any time outstanding not to exceed $5,000,000outstanding;
(rs) Indebtedness incurred by a Foreign Subsidiary which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this clause (s) and then outstanding, does not exceed 5% of Foreign Subsidiary Total Assets;
(t) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on respect of the Cumulative CreditSenior Subordinated Notes, the Senior Unsecured Notes and any Permitted Refinancing thereof;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) Permitted Credit Agreement Refinancing Debt and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrenceRefinancing thereof;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Indebtedness in respect of the Second Lien Notes and any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)Refinancing thereof;
(x) Permitted Additional Incremental Debt and any Permitted Refinancing thereof; and
(y) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(x) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (y) above, the Company shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that (i) all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred on such date in reliance only on the exception in clause (a) of Section 7.03, and (ii) all Indebtedness outstanding under the Senior Subordinated Notes or the Senior Unsecured Notes will be deemed to have been incurred on such date in reliance only on the exception of clause (u) of Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Sources: Credit Agreement (DJO Finance LLC)
Indebtedness. CreateNo Obligor will, nor will it permit any Restricted Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Secured Obligations;
(b) Indebtedness existing on the date hereof and set forthFourth Amendment Effective Date and described in Schedule 6.01 and extensions, renewals, refinancings and replacements of any such Indebtedness in accordance with clause (xf) hereof;
(c) Indebtedness outstanding on the Closing Date of Kodiak Corp owing to any Restricted Subsidiary and listed on Schedule 7.03(b) and of any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and Restricted Subsidiary owing to Kodiak Corp or any Permitted Refinancing thereof; other Restricted Subsidiary, provided that any such intercompany (i) Indebtedness of any Loan Party owed Restricted Subsidiary that is not an Obligor owing to Kodiak Corp or any Obligor shall be subject to Section 6.04 and (ii) Indebtedness of any Obligor owing to any Restricted Subsidiary that is not a Loan Party an Obligor shall be unsecured and subordinated to the Secured Obligations pursuant on terms reasonably satisfactory to the Intercompany NoteAdministrative Agent;
(cd) Guarantees by the Borrower and Kodiak Corp of Indebtedness of any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee and by any Restricted Subsidiary of Indebtedness of Kodiak Corp or any other Restricted Subsidiary, provided that (i) the Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be so Guaranteed is permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth hereinby this Section 6.01, (Bii) 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 (as reasonably determined Guarantees by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) Kodiak Corp or any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case Obligor of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party an Obligor shall be unsecured subject to Section 6.04 and (iii) Guarantees permitted under this clause (d) shall be subordinated to the Secured Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Noteapplicable Subsidiary on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower Kodiak Corp or any Restricted Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with clause (f) below; provided that (i) such Indebtedness is incurred prior to or within 270 one hundred eighty (180) days after such acquisition or the acquisitioncompletion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) together with any Refinance Indebtedness in respect thereof permitted by clause (f) below, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount shall not to exceed the greater of (A) $13,000,000 75,000,000 and 20(B) $50,000,000 plus 1% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined Net Tangible Assets at the time of creation, incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing or assumption of such Attributable Indebtedness;
(f) Indebtedness which represents extensions, renewals, refinancings and replacements (such Indebtedness, the “Refinance Indebtedness”) of any of the Indebtedness described in respect of Swap Contracts designed clauses (b), (e), (j), (l) and (n) hereof (such Indebtedness so extended, renewed, refinanced or replaced being referred to hedge against herein as the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof“Original Indebtedness”); provided that (i) such Refinance Indebtedness does not increase the principal amount of the Original Indebtedness except by (A) an amount equal to unpaid accrued interest and premiums (including tender and call premiums) thereon plus underwriting discounts and other reasonable and customary fees, commissions and expenses (including upfront fees, original issue discount or initial yield payments) incurred in connection with the relevant refinancing, refunding or replacement, (B) an amount equal to any such Guarantees by Loan Parties existing commitments unutilized thereunder and (C) any additional amount otherwise permitted to be incurred pursuant to this Section 6.01 (which shall constitute a usage of such other permitted amount and if such additional Indebtedness is secured, the Lien securing such Refinance Indebtedness satisfies the applicable requirements of Section 6.02), (ii) any Liens securing such Refinance Indebtedness are not extended to any additional property of any Loan Party or any of its Restricted Subsidiaries, (iii) no Loan Party or any of its Restricted Subsidiaries that is not originally obligated with respect to repayment of such Original Indebtedness is required to become obligated with respect to such Refinance Indebtedness, (iv) such Refinance Indebtedness does not result in a shortening of the average weighted maturity of such Original Indebtedness, (v) the terms of any Refinance Indebtedness (and, if applicable, subordination terms) are not Loan Parties shall only be permitted not, taken as a whole (as reasonably determined by the Borrower Representative), more favorable to the extent constituting an Investment permitted lenders providing such Indebtedness than those applicable to the relevant Original Indebtedness (other than any covenants or any other provisions applicable only to periods after the latest occurring Maturity Date as of such date of issuance or any covenants or provisions which are then current market terms for the applicable type of Indebtedness (as determined in good faith by Section 7.02(c)(iiithe Borrower Representative)) and (vi) if such Original Indebtedness was subordinated in right of payment to the Secured Obligations, then the terms and conditions of such Refinance Indebtedness must include subordination terms and conditions that are at least as favorable to the Administrative Agent and the Lenders as those that were applicable to such Original Indebtedness;
(g) Indebtedness of the Borrower or under any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment Swap Agreement not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition entered into for speculative purposes and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred permitted pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis6.07;
(h) Indebtedness representing deferred compensation owed to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankersproviding workers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claimscompensation, health, disability or other employee benefits or property, casualty or liability insurance insurance, pursuant to reimbursement or self-insurance or other Indebtedness with respect indemnification obligations to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretosuch Person, in each case incurred in the ordinary course of business or consistent with past practicebusiness;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(ri) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-any Loan Party whichin respect of performance bonds, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) bid bonds, appeal bonds, surety bonds and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)similar obligations, in each case determined provided in the ordinary course of business;
(j) Indebtedness of any Person that becomes a Subsidiary after the Effective Date; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance such Person becoming a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) Subsidiary and (fii) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, either the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio permitted by this clause (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(iij), together with any Refinance Indebtedness in respect thereof permitted by clause (f) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunderabove, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (xA) $9,750,000 75,000,000 and (yB) 15$50,000,000 plus 1% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined Net Tangible Assets at the time of creation, incurrence or assumption of such Indebtedness;
(k) other Indebtedness in an aggregate principal amount not to exceed the greater of (i) $100,000,000 and (Bii) $50,000,000 plus 1% of Consolidated Net Tangible Assets at the time of creation, incurrence or assumption of such Indebtedness;
(l) Indebtedness of any Burro Entity in respect of the Burro Debt; provided that if (i) such Indebtedness is exists at the time such Burro Entity becomes a term loan that Restricted Subsidiary pursuant to the Burro Mergers and is not subordinated created in right contemplation of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu or in right of security connection with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v)Burro Mergers, (Aii) with respect to any Revolving Indebtedness under the Burro Credit CommitmentsFacilities, a borrowing of such Indebtedness is repaid in full no later than one (1) Business Day after the maximum amount of Loans available thereunder shall be assumed Burro Mergers Effective Date and (Biii) with respect to the extent Burro Notes, such Indebtedness is redeemed in full no later than three (3) Business Days after the proceeds of any Indebtedness incurred Burro Mergers Effective Date and an amount necessary to redeem the Burro Notes in full is deposited with the applicable trustee or paying agent under this Section 7.03(vthe Burro Notes no later than one (1) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)Business Day after the Burro Mergers Effective Date;
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Indebtedness. CreateNeither the Company nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under (i) the Loan Documents, (ii) the Senior Unsecured Notes Documents in an aggregate principal amount not to exceed $300,000,000 and, in the case of this clause (including ii), any Indebtedness incurred pursuant to Section 2.14 or 2.15)Permitted Refinancing thereof;
(b) (xi) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness owed to the Company or any Restricted Subsidiary outstanding on the Closing Date and any Permitted Refinancing thereofrefinancing thereof with Indebtedness owed to the Company or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note and (y) all such intercompany Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower Company and any Restricted Subsidiary in respect of Indebtedness of the Borrower Company or any Restricted Subsidiary of the Company otherwise permitted hereunder; provided that that
(A) no Guarantee by of any Restricted Subsidiary of Senior Unsecured Notes or any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, herein and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower Company or any Restricted Subsidiary owing to any Loan Party the Company or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured evidenced by an Intercompany Note and any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party is subordinated in right of payment to the Obligations pursuant Loans (for the avoidance of doubt, any such Indebtedness owing to subordination terms substantially consistent with a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms of the Intercompany Notesuch Indebtedness expressly provide otherwise);
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease lease, expansion, development, installation, relocation, renewal, maintenance, upgrade or improvement of a fixed or capital asset incurred by the Borrower Company or any Restricted Subsidiary prior to or within 270 365 days after the acquisition, construction, repair, replacement, lease lease, expansion, development, installation, relocation, renewal, maintenance, upgrade or improvements improvement of the applicable asset in an aggregate amount not to exceed the greater of (a) $13,000,000 80,000,000335,000,000 and 20(b) 6.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Total Assets, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and outstanding, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and (iii) any Permitted Refinancing of such Attributable Indebtednessany of the foregoing;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the BorrowerCompany’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower Company or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, so long as such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or Acquisition, and any Permitted Refinancing thereof or (ii) thereof; provided that after giving Pro Forma Effect pro forma effect to such Permitted Acquisition and the incurrence assumption of such Indebtedness, as applicable, the aggregate amount of such Indebtedness does not exceed (x) $75,000,000 at any time outstanding does not exceed plus (y) any additional amount of such Indebtedness so long (i) if such Indebtedness is secured on a junior basis to the sum of (x) Facilities, the greater of $16,250,000 and 25% of Consolidated EBITDA (Total Net Leverage Ratio determined on a Pro Forma Basis is no greater than the Applicable Consolidated Total Net Leverage Ratio Level (or if such Indebtedness is assumed in accordance connection with Section 1.09a Permitted Acquisition or other similar Investment not prohibited by this Agreement, no greater than the greater of (1) plus the Applicable Consolidated Total Net Leverage Ratio Level and (y2) additional indebtedness so long as the Consolidated Total Net Leverage Ratio immediately prior to the consummation of such Permitted Acquisition or Investment), and the Company and its Restricted Subsidiaries are in compliance with the covenants set forth in Section 7.11, determined on a Pro Forma Basis as of the date of incurrence of such Indebtedness; (ii) if such Indebtedness is not secured on a pari passu basis with the Facilities, the Consolidated First Lien Net Leverage Ratio determined on a Pro Forma Basis is no greater than 4.25:1:00the Applicable Consolidated First Lien Net Leverage Ratio Level (or if such Indebtedness is assumed in connection with a Permitted Acquisition or other similar Investment not prohibited by this Agreement, no greater than the greater of (1) the Applicable Consolidated First Lien Net Leverage Ratio Level and (2) the Consolidated First Lien Net Leverage Ratio immediately prior to the consummation of such Permitted Acquisition or Investment), and the Company and its Restricted Subsidiaries are in compliance with the covenants set forth in Section 7.11, determined on a Pro Forma Basis as of the date of incurrence of such Indebtedness; or (iii) if such Indebtedness is unsecured, the Company and its Restricted Subsidiaries are in compliance with either (I) a Consolidated Interest Coverage Ratio no less than either (A) 2.00 to 1.00 or (B) in the case of any such Indebtedness being assumed in connection with a Permitted Acquisition or other similar Investment not prohibited by this Agreement, the Consolidated Interest Coverage Ratio immediately prior to the incurrence of such Indebtedness and consummation of such Permitted Acquisition or investment or (II) a Consolidated Total Net Leverage Ratio no greater than either (A) 4.00 to 1.00 or (B) in the case of any such Indebtedness being assumed in connection with a Permitted Acquisition or other similar investment not prohibited by this Agreement, the Consolidated Total Net Leverage Ratio immediately prior to the incurrence of such Indebtedness and consummation of such Permitted Acquisition or Investment, determined, in each case determined at the time of such assumption or incurrencecase, on a Pro Forma Basis in accordance with Section 1.09as of the date of incurrence of such Indebtedness; provided thatthat any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s) or 7.03(w), does not exceed in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (xA) $9,750,000 125,000,000240,000,000 and (yB) 154.25% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma BasisTotal Assets;
(h) Indebtedness representing deferred compensation to employees of Holdings the Company (or any direct or indirect parent thereof) or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Company or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Company or any direct or indirect parent of Holdings the Company permitted by Section 7.06;
(j) Indebtedness incurred by Holdings the Company or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purposes of financing such acquisition; provided, that such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (j));
(k) Indebtedness consisting of obligations of Holdings the Company or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment expressly permitted hereunder;
(l) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(m) Indebtedness of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of (a) $22,750,000 200,000,000405,000,000 and 35(b) 7.25% of Consolidated EBITDATotal Assets (or prior to the termination of the Waiver Period, the greater of (a) $395,000,000 and (b) 7.00% of Total Assets) at any time outstanding plus (y) 100% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests, Designated Equity Contributions, Designated Liquidity Equity Contributions or sales of Equity Interests to the Company or any of its Subsidiaries) of the Company or any direct or indirect parent of the Company after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Company that has not been applied to incur debt pursuant to this clause (m)(y), to make Restricted Payments pursuant to Section 7.06 (other than pursuant to Section 7.06(h)), to make Investments pursuant to clause 7.02(n), (v), (w), (y) or (z) or to make prepayments of subordinated indebtedness pursuant to Section 7.13 (other than 7.13(a)(iv));
(n) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower Company or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower Company or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters so long as no Event of credit issued in currencies Default has occurred and is continuing or would result therefrom (or if the proceeds of such Indebtedness are being used to finance a Permitted Acquisition or other similar Investment not available hereunder prohibited by this Agreement, no Event of Default under Sections 8.01(a) or (f) has occurred and is continuing), Indebtedness incurred on (x) a pari passu basis with the Facilities or (y) junior to the Facilities in an aggregate principal amount, when aggregated with the amount of Incremental Term Loans and Incremental Revolving Credit Commitments pursuant to Section 2.14(d)(v)(A), not to exceed the greater or (x) $625,000,000 and (y) 100% of LTM Consolidated EBITDA (or prior to the termination of the Waiver Period, $450,000,000); provided that such Indebtedness shall (A) in the case of clause (x) above, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of clause (y) above, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred, (B) in the case of clause (x) above, have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities and, in the case of clause (y) above, shall not be subject to scheduled amortization prior to maturity, (C) if such Indebtedness is incurred or guaranteed on a secured basis by a Loan Party subject to the First Lien Intercreditor Agreement and/or the Junior Lien Intercreditor Agreement, as applicable, (D) have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Company are not materially less favorable (when taken as a whole) to the Company than the terms and conditions of the Loan Documents (when taken as a whole) (provided that a certificate of the Company as to the satisfaction of the conditions described in this clause (D) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Company has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (D), shall be conclusive unless the Administrative Agent notifies the Company within such five (5) Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)) and (E) the Company and its Restricted Subsidiaries are in compliance with the covenants set forth in Section 7.11, determined on a Pro Forma Basis as of the date of incurrence of such Indebtedness; provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding not to exceed the greater of (1) $5,000,000125,000,000240,000,000 and (2) 4.25% of Total Assets;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) [Reserved];
(v) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (v) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 and 1510% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrenceForeign Subsidiary Total Assets;
(tw) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) unsecured Indebtedness of the Borrower Company or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable RequirementsSubsidiary, so long as the Company and its Restricted Subsidiaries are in compliance with either (I) a Consolidated Interest Coverage Ratio no Default less than either (A) 2.00 to 1.00 or Event (B) in the case of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other similar Investment permitted hereundernot prohibited by this Agreement, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the incurrence of such Indebtedness and consummation of such Permitted Acquisition or other Investment; provided that Investment or (AII) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the a Consolidated Total Net Leverage Ratio no greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);than
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Permitted Subordinated Indebtedness;
(b) Indebtedness of the Loan Parties under the Loan Documents;
(xc) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date 7.03 and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(cd) Guarantees by the Borrower and or any Restricted Subsidiary in respect of Indebtedness of the Borrower or any another Restricted Subsidiary otherwise permitted hereunderhereunder (excluding Indebtedness permitted by Section 7.03(y)); provided that (Ax) no Guarantee by any Restricted Subsidiary of any Permitted Subordinated Indebtedness constituting a junior lien financing (or Specified Junior Financing Obligation any Permitted Refinancing thereof) shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Subsidiary Guarantee in accordance with Section 6.13 and (By) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(de) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting that constitutes an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall must be unsecured and expressly subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Notesuch Loan Party, it being understood that such Loan Party may make payments thereon unless an Event of Default has occurred and is continuing;
(ef) [Reserved];
(ig) Attributable Indebtedness of Foreign Subsidiaries of the Borrower in an aggregate principal amount not to exceed the greater of (x) $50,000,000 and (y) 15% of Consolidated EBITDA as of the last day of the most recently ended Test Period;
(h) Indebtedness of (x) the Borrower or any Restricted Subsidiary incurred to finance a Permitted Acquisition or other Indebtedness permitted Investment or (including Capitalized Leasesy) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred Persons that are acquired by the Borrower or any Restricted Subsidiary prior to or within 270 days after merged into the acquisition, construction, repair, replacement, lease Borrower or improvements of the applicable asset a Subsidiary in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis Permitted Acquisition or other permitted Investment in accordance with Section 1.09), in each case determined at the time terms of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted this Agreement or that is assumed by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any such Permitted Acquisition or other Investment not prohibited hereunderAcquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness under this clause (y) is not incurred in contemplation of such Permitted Acquisition or other Investment or Acquisition; provided further that:
(i) in the case of any Permitted Refinancing thereof or Indebtedness incurred in reliance on clause (y) of this Section 7.03(h), the Borrower is in Pro Forma Compliance with the covenants set forth in Section 7.10; and
(ii) in the case of any Indebtedness incurred in reliance on clause (x) of this Section 7.03(h) (which must either be unsecured or secured by the Collateral on a pari passu or junior basis), (1) after giving Pro Forma Effect to such Permitted Acquisition and thereto (x) in the incurrence case of such IndebtednessIndebtedness secured by a Lien on the Collateral that is pari passu with the Obligations, as applicable, (A) the aggregate amount of such Indebtedness at any time outstanding First Lien Leverage Ratio does not exceed the sum of 3.50:1.00 and (xB) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided thatsubject, in the case of clause (ii)loans that are also pari passu with the Term B Loans in right of payment, to the MFN Provision, (Ay) in the case of Indebtedness secured by a Lien on the Collateral that ranks junior to the Liens on the Collateral securing the Obligations, the Senior Secured Leverage Ratio does not exceed 4.50:1.00 and (z) in the case of Indebtedness that is unsecured, the Borrower is in Pro Forma Compliance with the covenants set forth in Section 7.10, (2) such Indebtedness does shall not mature or (in the case of unsecured Indebtedness and Indebtedness secured by a Lien on the Collateral that is junior to the Liens securing the Obligations) require any scheduled amortization or require scheduled payments of principal or shall be subject to any mandatory redemption, repurchase, repayment or sinking fund obligation, in each case, prior to the date that is the Latest Maturity DateDate as of such date, or and shall have a Weighted Average Life to Maturity less not shorter than the longest remaining Weighted Average Life to Maturity of any Term Loan outstanding at the time Facilities, (3) that if such Indebtedness is incurred secured by the Collateral or issuedguaranteed on a secured basis by a Loan Party, be subject to an Acceptable Intercreditor Agreement, (B4) such Indebtedness have terms and conditions that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the covenants and events of default of the Loan Documents (when taken as a whole), (5) no Event of Default exists or shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) therefrom; and (C6) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted any Subsidiaries that are non-Loan Parties incurred pursuant to under this Section 7.03(gclause (h) shall not exceed the greater of (x) $9,750,000 75,000,000 and (y) 1520% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma BasisEBITDA;
(hi) Indebtedness incurred by the Borrower or any Restricted Subsidiary representing deferred compensation to employees of Holdings or any of its a Restricted Subsidiaries Company incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any Restricted Subsidiary to future, present or former directors, officers, members of management, employees or consultants of the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, heirs, family members, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06;
(jk) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries Subsidiary in a Permitted Acquisition, any other Investment permitted hereunder, merger Acquisition or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceAcquisitions;
(m) Indebtedness in an aggregate principal amount that at connection with intercompany cash management arrangements and related activities in the time of, and after giving effect to, the incurrence thereof, would not exceed the greater ordinary course of $22,750,000 and 35% of Consolidated EBITDAbusiness;
(n) Indebtedness in connection with Cash Management Obligations;
(o) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations of the Borrower or any Restricted Subsidiary contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims[Reserved];
(pq) obligations in respect of bid, performance, bidstay, customs, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretoSubsidiary, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Guarantees by the Borrower of Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Creditpermitted under this Section 7.03;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party whichin respect of Swap Contracts entered into in the ordinary course of business and not for speculative purposes;
(t) Indebtedness consisting of obligations owing under any customer or supplier incentive, when aggregated with supply, license or similar agreements entered into in the principal amount ordinary course of all other business;
(u) 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;
(v) [Reserved];
(i) Attributable Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken togetherpurchase money obligations (including obligations in respect of mortgage, does not exceed the greater of $9,750,000 industrial revenue bond, industrial development bond and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09similar financings), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its a Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred Subsidiary to finance a Limited Condition Transactionthe purchase, to Defaults repair or Events improvement of Default under Sections 8.01(a) and (ffixed or capital assets within the limitations set forth in Section 7.01(p) and any other Default or Event of Default Permitted Refinancing thereof, provided that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of all such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to clause (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(vw) shall not exceed the greater of (x) $9,750,000 50,000,000 and (y) 15% of Consolidated EBITDA as of the Borrower last day of the most recently ended Test Period or (determined ii) Indebtedness secured by Liens permitted under Section 7.01(e)(ii), 7.01(f), or 7.01(r);
(x) other Indebtedness in an aggregate principal amount not to exceed the greater of (x) $75,000,000 and (y) 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period;
(i) the LPS Notes; and (ii) any unsecured Guarantee by a Guarantor of the LPS Notes;
(z) other senior Indebtedness (which must either be unsecured or secured by the Collateral on a pari passu or junior basis) so long as (i) after giving Pro Forma Basis Effect thereto (x) in accordance with Section 1.09), in each the case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks is pari passu with the Lien on the Collateral securing the Obligations, (A) the First Lien Leverage Ratio does not exceed 3.50:1.00 and (B) is subject, in the case of loans that are pari passu in right of payment with the Term B Loans, to the MFN Provision, (y) in the case of Indebtedness secured by a Lien that ranks junior to the Liens on the Collateral securing the Obligations, the Senior Secured Leverage Ratio does not exceed 4.50:1.00 and (z) in the case of Indebtedness that is unsecured, the Borrower is in Pro Forma Compliance with the covenants set forth in Section 7.10, (ii) such Indebtedness shall not mature or (in the case of unsecured Indebtedness and Indebtedness secured by a Lien on the Collateral that is junior to the Liens securing the Obligations) require any scheduled amortization or require scheduled payments of principal or shall be subject to any mandatory redemption, repurchase, repayment or sinking fund obligation, in each case, prior to the Latest Maturity Date as of such date, and shall have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities, (iii) any such Indebtedness of any Subsidiaries that are non- Loan Parties under this clause (z) shall not exceed the greater of (1) $50,000,000 and (2) 15% of Consolidated EBITDA as of the last day of the most recently ended Test Period, (iv) no Event of Default exists or shall result therefrom, (v) if secured by the Collateral or guaranteed on a secured basis by a Loan Party, be subject to an Acceptable Intercreditor Agreement, (vi) have terms and conditions that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the covenants and events of default of the Loan Documents (when taken as a whole) and (vii) if subordinated, must be subordinated to the prior payment in full in cash of the Obligations on terms reasonably acceptable to the Administrative Agent;
(aa) secured notes or loans issued in lieu of Commitment Increases (such notes or loans, “Incremental Equivalent Debt”); provided that such Indebtedness (i) is secured only by the Collateral and on a pari passu or junior basis with the Lien securing the Obligations and (ii) is subject to an Acceptable Intercreditor Agreement; provided, further, that such Incremental Equivalent Debt otherwise satisfies the requirements set forth in Section 2.16(a), (e)(i)(B), (e)(ii), (j), (h) and clause (B) of the proviso in Section 2.16(b), and solely to the extent such Incremental Equivalent Debt is in the form of loans that are pari passu in right of payment and security with the Term B Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) MFN Provision set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v2.16(g);
(xbb) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(aa) above; and
(cc) Credit Agreement Refinancing Indebtedness.
Appears in 1 contract
Sources: Credit and Guaranty Agreement (Fidelity National Financial, Inc.)
Indebtedness. Create, issue, incur, assume assume, become liable in respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)any Loan Document;
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of (i) the Parent Borrower to any Loan Party owed Restricted Subsidiary, (ii) any Wholly Owned Subsidiary Guarantor to the Parent Borrower or any other Restricted Subsidiary, (iii) any Subsidiary Guarantor that is not a Wholly Owned Subsidiary Guarantor to any other Subsidiary Guarantor that is not a Wholly Owned Subsidiary Guarantor, (iv) any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated Wholly Owned Subsidiary Guarantor to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Parent Borrower or any other Restricted Subsidiary otherwise permitted hereunder; (provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee that is owed by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Wholly Owned Subsidiary Guarantor to a Loan Party shall only be permitted to the extent constituting an Investment (other than as permitted by clause (iii) hereof) shall be subject to Section 7.02(c)(iii7.7(f);
), (dv) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party the Parent Borrower or any other Restricted Subsidiary (or issued or transferred incurred pursuant to any direct IP Reorganization Transaction permitted under Section 7.17, (vi) any Additional Borrower that is a Foreign Subsidiary to any Foreign Subsidiary, (vii) any Foreign Subsidiary to any Additional Borrower, (viii) any Foreign Subsidiary to any other Foreign Subsidiary and (ix) any of the Parent Borrower or indirect parent any Subsidiary to the Parent Borrower or any other Subsidiary, if such Investment is permitted under Section 7.7;
(c) Guarantee Obligations (i) incurred by the Parent Borrower or any of a Loan Party which is substantially contemporaneously transferred to a Loan Party or its Restricted Subsidiaries of obligations of any Wholly Owned Subsidiary Guarantor, (ii) incurred by any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms obligations of the Security Agreement and Parent Borrower, (yiii) all such Indebtedness incurred by any Subsidiary Guarantor that is not a Wholly Owned Subsidiary Guarantor of obligations of any Loan Party owed to other Subsidiary Guarantor that is not a Wholly Owned Subsidiary Guarantor, (iv) incurred by the Parent Borrower or any of its Restricted Subsidiaries of obligations of any Restricted Subsidiary that is not a Loan Party Wholly Owned Subsidiary Guarantor (provided that any such Guarantee Obligation incurred pursuant to this clause (iv) shall be unsecured subject to Section 7.7(f) or 7.7(o)), (v) incurred by any Foreign Subsidiary of obligations of any Additional Borrower, (vi) incurred by any Additional Borrower that is a Foreign Subsidiary of obligations of any Foreign Subsidiary, (vii) incurred by any Foreign Subsidiary of obligations of any other Foreign Subsidiary and subordinated (viii) incurred by any of the Parent Borrower or any Subsidiary of obligations of the Parent Borrower or any Subsidiary, if such Investment is permitted under Section 7.7;
(d) Indebtedness outstanding on the Fifth Restatement Effective Date and, to the Obligations pursuant to subordination terms substantially consistent with extent not otherwise permitted by this Section 7.2, listed on Schedule 7.2(d), unless such Indebtedness is in an outstanding principal amount of less than $50,000 (provided the terms aggregate principal amount of the Intercompany Noteall such unlisted Indebtedness shall not exceed $1,000,000), and any Permitted Refinancing Indebtedness in respect thereof;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leasesincluding, without limitation, Capital Lease Obligations) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred secured by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset Liens permitted by Section 7.3(c) in an aggregate principal amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) 60,000,000 at any one time outstanding and outstanding;
(i) Indebtedness of the Parent Borrower in respect of the Senior Unsecured Debt in an aggregate principal amount not to exceed $550,000,000, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(mthe Parent Borrower in respect of Permitted Unsecured Debt (other than any Senior Unsecured Debt), provided that the Net Cash Proceeds of such Permitted Unsecured Debt are used to prepay the Incremental Term Loans, (iii) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred Indebtedness permitted under Section 7.2(f)(i) and (ii); and (iv) Guarantee Obligations of any Subsidiary Guarantor in the ordinary course respect of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by under Section 7.02(c)(iii7.2(f);
(g) Earnout Obligations incurred in connection with Permitted Acquisitions;
(h) Receivables Transaction Attributed Indebtedness and Factoring Indebtedness in an aggregate at any time outstanding not to exceed $200,000,000;
(i) to the extent constituting Indebtedness, obligations in respect of Swap Agreements otherwise permitted hereunder;
(j) obligations in respect of customs, performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Parent Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting acquired or assumed by the Parent Borrower or any Restricted Subsidiaries in connection with a Permitted Acquisition; provided, that (w) such Indebtedness is not incurred in connection with, or in contemplation of, such transaction; (x) on the date of promissory notes issued the acquisition or assumption of such Indebtedness, on a pro forma basis, giving effect to such Permitted Acquisition and any Indebtedness acquired, assumed or incurred in connection therewith, the Consolidated Leverage Ratio immediately after such acquisition or assumption of Indebtedness (determined on the basis of the financial information most recently delivered to the Administrative Agent pursuant to Section 6.1(a) or (b)) is at least 0.25 less than the Consolidated Leverage Ratio required by Holdings Section 7.1(a) for the most recently ended fiscal quarter for which financial information has been delivered pursuant to Section 6.1(a) or (b) and (y) immediately after giving effect to such acquisition or assumption, such Indebtedness is not guaranteed in any respect by the Parent Borrower or any Restricted Subsidiary (other than by any such Person that so becomes a Restricted Subsidiary or is the survivor of a merger with such Person and any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors Subsidiaries) (and employees, their respective estates, spouses or former spouses to finance such Indebtedness shall not contain a requirement that such Indebtedness be guaranteed by the purchase or redemption of Equity Interests of Holdings Parent Borrower or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in Subsidiary that is not a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations guarantor in respect of purchase price thereof immediately after giving effect to such acquisition or assumption) and (including earn-outsii) or other similar adjustments;
(k) any Permitted Refinancing Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunderrespect thereof;
(l) Cash Management Obligations (i) unsecured Indebtedness incurred by the Parent Borrower or any Restricted Subsidiaries in connection with a Permitted Acquisition; provided that (w) such Indebtedness matures no earlier than 181 days after the Maturity Date, (x) on the date of incurrence of such Indebtedness, on a pro forma basis, giving effect to such Permitted Acquisition and any Indebtedness acquired, assumed or incurred in connection therewith, the Consolidated Leverage Ratio immediately after such incurrence of Indebtedness (determined on the basis of the financial information most recently delivered to the Administrative Agent pursuant to Section 6.1(a) or (b)) is at least 0.25 less than the Consolidated Leverage Ratio required by Section 7.1(a) for the most recently ended fiscal quarter for which financial information has been delivered pursuant to Section 6.1(a) or (b), (y) such Indebtedness shall not have a definition of “Change of Control” or “Change in Control” (or any other defined term having a similar purpose) that is materially more restrictive than the definition of Change of Control set forth herein and (z) such Indebtedness shall not be subject to a financial maintenance covenant more favorable to the lenders providing such Indebtedness than those contained in the Loan Documents (other than for periods after the Maturity Date) and (ii) any Permitted Refinancing Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of relating to Disqualified Capital Stock (i) the financing of insurance premiums issued to or owned by any Borrower, any Subsidiary Guarantor or any Additional Borrower and (ii) take-or-pay obligations contained in supply arrangementsnot issued by (x) the Parent Borrower, in each case(y) any Subsidiary Guarantor or (z) any Additional Borrower (unless, in the ordinary course case of business;
clause (oii)(y) Indebtedness incurred or (ii)(z), either (A) such Disqualified Capital Stock issued by a Subsidiary Guarantor or an Additional Borrower is issued to the Parent Borrower,(B) such Disqualified Capital Stock issued by a Wholly Owned Subsidiary Guarantor is issued to the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts other Wholly Owned Subsidiary Guarantor) or similar instruments (C) such Disqualified Capital Stock issued or created in by an Additional Borrower is issued to the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practicea Wholly Owned Subsidiary Guarantor;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if secured or unsecured notes (such Indebtedness is secured on a pari passu in right of security with the Obligationsnotes, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment“Incremental Equivalent Debt”); provided that (A) the aggregate principal amount at any time outstanding of all Incremental Equivalent Debt, together with the aggregate principal amount (or committed amount, if applicable) of all Incremental Term Loans and Incremental Revolving Commitments shall not exceed $250,000,000, (B) the incurrence of such Indebtedness shall be subject to clauses (B), (C) and (D) of Subsidiaries that are non-the proviso to Section 2.25(a), as if such Incremental Equivalent Debt were an Incremental Term Loan Parties incurred pursuant to this Section 7.03(vor Incremental Revolving Commitment, as applicable, and the date of incurrence of such Incremental Equivalent Debt were an Incremental Loan Closing Date, (C) such Indebtedness shall mature no earlier than 181 days after the Maturity Date, (D) such Incremental Equivalent Debt shall not exceed have a definition of “Change of Control” or “Change in Control” (or any other defined term having a similar purpose) that is materially more restrictive than the greater definition of Change of Control set forth herein and (E) such Incremental Equivalent Debt shall not be subject to a financial maintenance covenant more favorable to the holders thereof than those contained in the Loan Documents (other than for periods after the Maturity Date) and (ii) any Permitted Refinancing Indebtedness in respect thereof; provided that, with respect to any incurrence of Incremental Equivalent Debt for which the Parent Borrower has made an LCA Election, (A) the relevant date for the determinations under clauses (x) $9,750,000 and (y) 15% of Consolidated EBITDA of above shall be the Borrower (determined on a Pro Forma Basis LCA Test Date in accordance with Section 1.09)1.5 and (B) for the avoidance of doubt, the conditions referred to in clause (B) above shall be limited to customary specified or certain funds representations and the absence of any Event of Default under Section 8(a) or Section 8(f) as if such Incremental Equivalent Debt were an Incremental Term Loan or Incremental Revolving Commitment, as applicable;
(o) Indebtedness arising from agreements of the Parent Borrower or any Restricted Subsidiary providing for customary indemnification, adjustment of purchase price or similar obligations, in each case determined at incurred or assumed in connection with the time disposition of incurrence and (B) any business, assets or a Restricted Subsidiary otherwise permitted hereunder; provided that if any such Indebtedness is in connection with a term loan Permitted Acquisition in respect of Persons that do not, upon the acquisition thereof (subject to any grace period set forth in Section 6.9), become Subsidiary Guarantors or property that is not subordinated in right of payment to the Loan Documents and that is secured not, upon acquisition thereof, owned by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans Subsidiary Guarantors shall be subject to the “most favored nation” pricing adjustment consideration limitation in Section 7.7(h)(ii);
(if applicablep) set forth Indebtedness in respect of netting services, overdraft protections and otherwise in connection with customary Deposit Accounts and Securities Accounts maintained by a Loan Party as part of its ordinary cash management program;
(q) unsecured Guarantee Obligations incurred by the Parent Borrower of cash management obligations of Subsidiaries incurred in the proviso ordinary course of business;
(r) unsecured Guarantee Obligations incurred in the ordinary course of business by the Parent Borrower of operating leases of Subsidiaries; and
(s) additional Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries in an aggregate principal amount (for the Parent Borrower and all Restricted Subsidiaries) not to Section 2.14(e)(iii) as if exceed the greater of $180,000,000 and 10.0% of Consolidated Total Assets of the Parent Borrower and its Subsidiaries at such Indebtedness were an Incremental Term Loan incurred thereunderdate in the aggregate at any time outstanding. For purposes of the calculations in determining compliance with this Section 7.03(v)7.2, (A) with respect Indebtedness need not be incurred solely by reference to one category described in this Section 7.2, but is permitted to be incurred in part under any Revolving Credit Commitments, a borrowing combination thereof and of the maximum amount of Loans any other available thereunder shall be assumed exemption and (B) in the event that Indebtedness (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in this Section 7.2, the Parent Borrower, in its sole discretion, may divide or classify any such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 7.2 and will be entitled to only include the extent amount and type of such item of Indebtedness (or any portion thereof) in one or more (as relevant) of the proceeds above clauses (or any portion thereof) and such item of Indebtedness (or any portion thereof) shall be treated as having been incurred or existing pursuant to only such clause or clauses (or any portion thereof); provided that all Indebtedness incurred or established hereunder on the Fifth Restatement Effective Date and related Guarantees will, at all times, be treated as incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness7.2(a).
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Indebtedness. Create, issue, incur, assume assume, become liable in respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)this Agreement;
(b) (xi) Indebtedness outstanding of the Loan Parties under the Term Loan Credit Agreement in an aggregate amount not to exceed $1,150,000,000, plus an additional amount so long as at the time of incurrence thereof and after giving effect thereto (excluding from Unrestricted Cash in the making of such pro forma calculation the proceeds of such additional Indebtedness), the Consolidated Secured Leverage Ratio for the Applicable Reference Period, calculated on a Pro Forma Basis as of the Closing Date date of incurrence of such additional Indebtedness, is not greater than 2.25:1.00 and listed on Schedule 7.03(b(ii) and any Permitted Refinancing thereof Indebtedness in respect thereof;
(c) Indebtedness of (i) the Borrower to any Restricted Subsidiary, (ii) any Subsidiary Guarantor to the Borrower or any other Restricted Subsidiary and (yiii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Subsidiary Guarantor to any other Restricted Subsidiary that is not a Subsidiary Guarantor; provided that (x) any Indebtedness of any Loan Party shall be unsecured and shall be subordinated in right of payment to the Obligations on terms customary for intercompany subordinated Indebtedness, as reasonably determined by the Administrative Agent, and (y) any such Indebtedness owing to any Loan Party shall be evidenced by a promissory note which shall have been pledged pursuant to the Intercompany NoteGuarantee and Collateral Agreement;
(cd) Guarantees Guarantee Obligations incurred by any Group Member of obligations of any Group Member to the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted extent such obligations are not prohibited hereunder; provided that (Ai) no Guarantee by to the extent any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is obligations are subordinated to the Obligations, any such related Guarantee Obligations incurred by a Loan Party shall be subordinated to the Guarantee guarantee of such Loan Party of the Obligations on terms at least as no less favorable (as reasonably determined by the Borrower) to the Lenders as those contained in than the subordination provisions of the obligations to which such Indebtedness Guarantee Obligation relates and (Cii) any Guarantee Obligations incurred by a any Loan Party of Indebtedness obligations of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany NoteSection 7.7(g)(iii), Section 7.7(h) or Section 7.7(s);
(e) (i) Attributable Indebtedness outstanding on the date hereof and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined listed on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(mSchedule 7.2(e) and any Permitted Refinancing of such Attributable IndebtednessIndebtedness in respect thereof;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees (including Capital Lease Obligations) secured by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment Liens permitted by Section 7.02(c)(iii7.3(g) in an aggregate principal amount not to exceed at any one time outstanding the greater of (i) $25,000,000 and (ii) 1.00% of Consolidated Total Assets (as of the date incurred);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees or directors of Holdings or any of the Borrower and its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(jh) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and owed in respect of any Guarantees thereof overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing-house transfers of funds;
(i) Indebtedness arising under any Swap Agreement permitted by Section 7.11;
(j) Indebtedness (other than for borrowed money) that may be deemed to exist pursuant to any guarantees, warranty or contractual service obligations, performance, surety, statutory, appeal, bid, prepayment guarantee, payment (other than payment of Indebtedness) or completion of performance guarantees or similar obligations incurred in the ordinary course of business;
(k) Indebtedness in respect of workers’ compensation claims, payment obligations in connection with health, disability or other types of social security benefits, unemployment or other insurance obligations, reclamation and statutory obligations, in each case in the ordinary course of business;
(l) 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 businessfunds, so long as such Indebtedness is covered or extinguished within 10 five Business Days of its incurrenceDays;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (i) the financing of insurance premiums or self-insurance obligations or (ii) take-or-pay obligations contained in supply arrangements, or similar agreements in each case, case in the ordinary course of business;
(n) Indebtedness in the form of purchase price adjustments (including in respect of working capital), earnouts, deferred compensation, indemnification or other arrangements representing acquisition consideration or deferred payments of a similar nature incurred in connection with any Permitted Acquisitions or other Investments permitted under Section 7.7 or Dispositions permitted under Section 7.5;
(o) (i) Indebtedness incurred of any Person that becomes a Restricted Subsidiary (or of any Person not previously a Restricted Subsidiary that is merged or consolidated with or into the Borrower or a Restricted Subsidiary in a transaction permitted hereunder) after the Closing Date, or Indebtedness of any Person that is assumed by the Borrower or any Restricted Subsidiary in connection with an acquisition of assets by the Borrower or such Restricted Subsidiary in a Permitted Acquisition; provided that (x) such Indebtedness exists at the time such Person becomes a Restricted Subsidiary (or is so merged or consolidated) or such assets are acquired and is not created in contemplation of or in connection with such Person becoming a Restricted Subsidiary (or such merger or consolidation) or such assets being acquired and (y) with respect to any Indebtedness of any Person that becomes a Restricted Subsidiary or that is merged or consolidated with or into the Borrower or a Restricted Subsidiary, such Indebtedness is not guaranteed in any respect by the Borrower or any Restricted Subsidiary (other than by any such Person that so becomes a Restricted Subsidiary or is the survivor of a merger with such Person and any of its Restricted Subsidiaries Subsidiaries) and (ii) Permitted Refinancing Indebtedness in respect of letters such Indebtedness; provided that after giving effect to the applicable acquisition (or merger or consolidation) or such assumption of creditIndebtedness, bank guaranteesthe Consolidated Leverage Ratio for the Applicable Reference Period, bankers’ acceptancescalculated on a Pro Forma Basis as of the date of such acquisition (or merger or consolidation) or assumption, warehouse receipts or similar instruments issued or created is not in excess of 3.25 to 1.00; provided further that the ordinary course aggregate principal amount of businessIndebtedness of Subsidiaries that are not Loan Parties outstanding under this Section 7.2(o), including in respect together with the aggregate principal amount of workers compensation claimsIndebtedness of Subsidiaries that are not Loan Parties outstanding under Section 7.2(v), 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 claimsshall not exceed $50,000,000 at any time;
(p) obligations in respect Indebtedness of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by any Restricted Subsidiary to the Borrower or any of its Restricted Subsidiaries other Loan Party to the extent such Indebtedness is permitted by Section 7.7(g)(iii), Section 7.7(h) or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in Section 7.7(s); provided that any such Indebtedness owed to a Loan Party shall be evidenced by a promissory note which shall have been pledged pursuant to the ordinary course of business or consistent with past practiceGuarantee and Collateral Agreement;
(q) letters Indebtedness of credit issued the Borrower in currencies not available hereunder respect of the 2015 Convertible Notes in an aggregate principal amount at any time outstanding not to exceed $5,000,00032,000,000 and any Permitted Refinancing Indebtedness in respect thereof;
(r) Indebtedness supported by a Letter of Credit, the Borrower in a respect of the 2020 Convertible Notes in an aggregate principal amount not to exceed $250,000,000 and any Permitted Refinancing Indebtedness in respect thereof;
(s) Indebtedness of any Restricted Subsidiaries that are not Loan Parties under the Asia Facility in an aggregate outstanding principal amount not to exceed the face amount greater of such Letter (i) $150,000,000 and (ii) the sum of Credit(x) 85% of “eligible accounts” (which shall be determined in accordance with the then-existing market eligibility criteria applicable to secured asset-based lenders in the applicable foreign jurisdictions) and (y) 50% of “eligible inventory” (which shall be determined in accordance with the then-existing market eligibility criteria and advance rates applicable to secured asset-based lenders in the applicable foreign jurisdictions), and any Permitted Refinancing Indebtedness in respect thereof;
(si) Permitted Additional Junior Lien Indebtedness incurred by a Restricted Subsidiary that is a non-of any Loan Party whichso long as, when aggregated with at the time of incurrence of such Permitted Additional Junior Lien Indebtedness, the Consolidated Leverage Ratio for the Applicable Reference Period, calculated on a Pro Forma Basis as of the date of incurrence thereof (but excluding from Unrestricted Cash in making such pro forma calculation the Net Cash Proceeds of such Indebtedness), is not in excess of 3.25 to 1.00; provided that (x) immediately prior to and immediately after giving effect to the incurrence of any Permitted Additional Junior Lien Indebtedness under this Section 7.2(t), no Default or Event of Default shall have occurred and be continuing and (y) the Borrower will, on the date of incurrence of such Indebtedness in a principal amount in excess of all other $10,000,000, deliver to the Administrative Agent a certificate of a Responsible Officer, dated such date, confirming the satisfaction of the conditions set forth above and attaching a reasonably detailed calculation of the Consolidated Leverage Ratio on a Pro Forma Basis as of the applicable date identifying the Permitted Additional Junior Lien Indebtedness being incurred and specifying that it is being incurred pursuant to this Section 7.03(s7.2(t) and then outstanding (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) Permitted Unsecured Indebtedness of any Loan Party so long as, at the time of incurrence of such Permitted Unsecured Indebtedness, the Consolidated Leverage Ratio for all such Persons taken togetherthe Applicable Reference Period, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined calculated on a Pro Forma Basis as of the date of incurrence thereof (but excluding from Unrestricted Cash in accordance with Section 1.09making such pro forma calculation the Net Cash Proceeds of such Indebtedness), is not in each case determined at excess of 3.25 to 1.00; provided that (x) immediately prior to and immediately after giving effect to the time incurrence of incurrence;
any Permitted Unsecured Indebtedness under this Section 7.2(u), no Default or Event of Default shall have occurred and be continuing and (ty) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance the Borrower will, on the Cumulative Credit;date of incurrence of such Indebtedness in a principal amount in excess of $10,000,000, deliver to the Administrative Agent a certificate of a Responsible Officer, dated such date, confirming the satisfaction of the conditions set forth above and attaching a reasonably detailed calculation of the Consolidated Leverage Ratio on a Pro Forma Basis as of the applicable date identifying the Permitted Unsecured Indebtedness being incurred and specifying that it is being incurred pursuant to this Section 7.2(u) and (ii) any Permitted Refinancing Indebtedness in respect thereof; and
(v) additional Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses in an aggregate principal amount (a), (cfor the Borrower and all Restricted Subsidiaries) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred not to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and exceed $50,000,000 at any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtednessone time outstanding; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, that the aggregate principal amount of such Indebtedness shall of Subsidiaries that are not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities Loan Parties outstanding under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection 7.2(v), together with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-not Loan Parties incurred pursuant to this outstanding under Section 7.03(v) 7.2(o), shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined 50,000,000 at the time of incurrence and (B) any time; provided that if such Indebtedness is a term loan that is not subordinated in right of payment notwithstanding anything to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations contrary in this Section 7.03(v)7.2, (A) with no Loan Party shall have any Guarantee Obligations in respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness of a Restricted Subsidiary incurred pursuant to Section 7.03(v7.2(s);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);.
Appears in 1 contract
Indebtedness. CreateThe Company will not, and will not permit any Subsidiary to, create, issue, incur, assume assume, become liable in respect of or suffer to exist any Indebtedness, exceptexist:
(a) any Indebtedness pursuant to any Receivables Transaction, except for Indebtedness pursuant to a Receivables Transaction that is (i) nonrecourse with respect to the Company and its Subsidiaries (other than any Receivables Subsidiary and to any Equity Interests of such Receivables Subsidiary (and the proceeds thereof)) and (ii) in an aggregate principal amount at the most recent date on which any such Indebtedness is incurred not exceeding 15% of Consolidated Total Assets as of the last day of the then most recently ended fiscal quarter of the Company immediately on or prior to such incurrence date; or
(b) any Indebtedness of any Loan Party under of the Loan Documents Subsidiaries other than:
(including i) Indebtedness of any Indebtedness incurred Receivables Subsidiary pursuant to any Receivables Transaction permitted under Section 2.14 or 2.1510.6(a);
(bii) (x) any Indebtedness outstanding of any Subsidiary existing on the Closing Restatement Date and listed set forth on Schedule 7.03(b) 10.6 and any Permitted Refinancing refinancing thereof; provided that the then outstanding principal amount thereof is not increased and the weighted average maturity thereof is not decreased;
(yiii) intercompany any Indebtedness outstanding on of any Subsidiary which is a Subsidiary Guarantor, so long as such Subsidiary has complied with the Closing Date and requirements of Section 9.8 in respect of its Subsidiary Guarantee;
(iv) any Permitted Refinancing thereofIndebtedness of any Subsidiary owed to the Company or any other Subsidiary; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party Guarantor shall only be permitted pursuant to this Section 10.6(b)(iv) to the extent constituting an Investment permitted by owed to the Company or another Subsidiary Guarantor;
(v) any Indebtedness arising in respect of Capital Leases or purchase money obligations incurred in accordance with Section 7.02(c)(iii10.5(f);
(dvi) any other Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)Subsidiaries; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to not at the Administrative Agent in accordance with the terms of the Security Agreement and (y) all most recent date on which any such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset was incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and 600,000,000 or (y) 1510% of Consolidated EBITDA Total Assets as of the Borrower determined at last day of the time then most recently ended fiscal quarter of the Company immediately on or prior to such incurrence on a Pro Forma Basisdate;
(hvii) Indebtedness representing deferred compensation to employees of Holdings or any Subsidiary of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness Company in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, connection with deposit accounts in the ordinary course of business;
(oviii) any Guarantee Obligation of the Company in respect of Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect Subsidiary under clause (vii) hereof up to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;$300,000,000 at any time outstanding; and
(six) any Indebtedness incurred by a Restricted Subsidiary Spinco or its Subsidiaries, provided that (w) such Indebtedness is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness contemplation of the Borrower consummation of the Spin Off (whether substantially simultaneously with, or in the reasonable judgment of the Company, within a reasonable time period prior to the Spin Off) or following the Spin Off and the proceeds of which are used, among other things, for the purpose of making dividends to the Company, (x) such Indebtedness is not guaranteed, directly or indirectly, by the Company or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (aother than Spinco and its Subsidiaries), (cy) such Indebtedness shall be promptly repaid in the event that a Spin Off Termination occurs and (dz) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) shall have occurred and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtednesscontinuing.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of Parent and any Loan Party of its Subsidiaries under the Loan Documents (including provided that, in the case of the incurrence of any Indebtedness incurred pursuant Specified Incremental Term Loans, the Borrower applies the proceeds thereof substantially concurrently with the incurrence thereof, to Section 2.14 repurchase or 2.15otherwise redeem the Specified Senior Secured Notes or Permitted Additional First Priority Debt as contemplated by (and subject to the limitations set forth in) the definition of Specified Incremental Term Loans);
(b) Indebtedness (xi) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date Date;
(c) Guarantees by Parent and any Permitted Refinancing thereof; provided that any such intercompany the Restricted Subsidiaries in respect of Indebtedness of Parent or any Loan Party owed to any Restricted Subsidiary otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees may not, by the Borrower and any virtue of this Section 7.03(c), Guarantee Indebtedness that such Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing High Yield Notes, Specified Senior Secured Notes, Permitted Additional Incremental Debt, Permitted Term Loan Refinancing Debt or Specified Junior Financing Obligation (or any Permitted Refinancing of any of the foregoing) shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Guaranty and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness;
(Cd) any Guarantee by a Loan Party of Indebtedness of a Parent or any Restricted Subsidiary that is not a Loan Party shall only be permitted owing to Parent or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) that, all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms set forth in Section 5.03 of the Intercompany NoteSecurity Agreement;
(e) so long as the Borrower is in compliance with the Senior Secured First Lien Incurrence Test (calculated after giving Pro Forma Effect to the incurrence of such Indebtedness), (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and construction, repair, replacement or improvement, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m7.05(f) and (iii) any Permitted Refinancing of such Attributable Indebtednessany Indebtedness set forth in the immediately preceding clauses (i) and (ii);
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary (i) assumed or incurred in connection with any Permitted Acquisition or other Investment (ii) incurred to finance a Permitted Acquisition, in each case, that is secured only by the assets or business acquired in the applicable Permitted Acquisition (including any acquired Equity Interests) and so long as both immediately prior and after giving effect thereto, (A) no Default shall exist or result therefrom, and (B) the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this paragraph (g) does not prohibited hereunderexceed $325,000,000;
(i) Indebtedness of any Restricted Subsidiary (A) assumed in connection with any Permitted Acquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) incurred to finance a Permitted Acquisition or other Investment or and (ii) any Permitted Refinancing of the foregoing; provided, in each case that such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (w) is unsecured or is subordinated to the Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Notes Indenture as of the Closing Date, (iix) both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom and (2) the Total Leverage Ratio (calculated after giving Pro Forma Effect to the assumption or incurrence of such Permitted Acquisition Indebtedness) shall not be greater than 6.50 to 1.00, (y) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the Latest Maturity Date of the Term Loans outstanding at such time (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemptions provisions satisfying the requirement of clause (z) hereof) and (z) has terms and conditions (other than interest rate and redemption premiums), taken as a whole, that are not materially less favorable to the Borrower as the terms and conditions of the Senior Subordinated Notes as of the Closing Date; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, as applicable, together with a reasonably detailed description of the aggregate amount material terms and conditions of such Indebtedness at any time outstanding does not exceed or drafts of the sum documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrower within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees); provided further that notwithstanding anything contained in the Loan Documents to the contrary, (xa) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance only obligors with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of respect to any Indebtedness incurred pursuant to clause (ii), (A) such of this paragraph or any Permitted Refinancing of Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard respect thereof shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of those Persons who were obligors of such Indebtedness of immediately prior to such Permitted Acquisition and (b) Restricted Subsidiaries that are nonNon-Loan Parties incurred may not incur Indebtedness pursuant to this Section 7.03(gclause (h) shall not exceed the greater in an aggregate outstanding amount in excess of (x) $9,750,000 and (y) 155% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma BasisForeign Subsidiary Total Assets;
(hi) Indebtedness representing deferred compensation to employees of Holdings or any of its the Borrower and the Restricted Subsidiaries incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings Parent permitted by Section 7.06;
(jk) Indebtedness incurred by Holdings or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of obligations of Holdings or any of its Parent and the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(mn) Indebtedness in an aggregate principal amount not to exceed $800,000,000 at any time outstanding; provided that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater a maximum of $22,750,000 and 35% 650,000,000 in aggregate principal amount of Consolidated EBITDAsuch Indebtedness may be incurred by Non-Loan Parties;
(no) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Borrower Parent or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qr) letters Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to Parent or any of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000its Restricted Subsidiaries;
(rs) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(st) Indebtedness in respect of the High Yield Notes and any Permitted Refinancing thereof;
(u) [reserved];
(v) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (v) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 and 155% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Foreign Subsidiary Total Assets, which Indebtedness shall be secured only to the extent permitted by Section 1.097.01(n), in each case determined at the time of incurrence;
(tw) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) Specified Senior Secured Notes and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:Permitted Refinancing in respect thereof;
(i) if such Indebtedness is secured on a pari passu Permitted Additional Incremental Debt in right of security with the Obligations, the an aggregate principal amount of such Indebtedness shall not to exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment Incremental Availability at the time of incurrence or thereof; and (yii) Permitted Refinancings in respect thereof;
(i) Permitted Term Loan Refinancing Debt; provided that the Interest Coverage Ratio (determined on a Pro Forma BasisBorrower complies with Section 2.05(c) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 issuance thereof and (yii) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis Permitted Refinancings in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.thereof; and
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(xz) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(y) above. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) the Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness of any Loan Party under the Loan Documents (including Acquired Indebtedness) or issue any Indebtedness incurred pursuant shares of Disqualified Stock and the Borrower will not permit any of its Restricted Subsidiaries to Section 2.14 or 2.15);
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and issue any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofshares of Preferred Stock; provided provided, however, that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Indebtedness of the Borrower or Disqualified Stock and any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary may issue shares of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Borrower and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing beginning of such Attributable four-quarter period; provided, further, that the aggregate amount of Indebtedness (including Acquired Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed that may be Incurred and Disqualified Stock or Preferred Stock that may be issued pursuant to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees foregoing by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness Guarantors of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) Loans shall not exceed the greater of (x) $9,750,000 175.0 million and (y) 159.0% of Consolidated EBITDA of the Borrower determined Total Assets at the time of Incurrence, at any one time outstanding.
(b) In addition, the following shall be permitted:
(1) the Incurrence by the Borrower or its Restricted Subsidiaries of (i) the Obligations under this Agreement and the Collateral Documents and (ii) the ABL Credit Agreement and Guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate amount not to exceed at any one time outstanding, the greater of (x) $350 million and (y) the Borrowing Base as of the date of such incurrence on Incurrence, in each case of this clause (ii) less the aggregate amount of Indebtedness under Receivable Financing incurred by a Pro Forma BasisReceivable Subsidiary;
(h2) the Incurrence by the Borrower and the Guarantors of Indebtedness represented by the Senior Notes and the Guarantees, as applicable, and any refinancing thereof;
(3) Indebtedness representing deferred compensation to employees of Holdings existing on the Amendment and Restatement Effective Date and listed on Schedule 7.03;
(4) Indebtedness (including, without limitation, Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes Subsidiaries, Disqualified Stock issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Borrower to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets used or useful in the business of the Borrower or its Restricted Subsidiaries or in a Similar Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (4), not to exceed the greater of (x) $125.0 million and (y) 6.0% of Consolidated Total Assets at the time of Incurrence, at any one time outstanding;
(5) Indebtedness Incurred by the Borrower or any of its Restricted Subsidiaries constituting reimbursement obligations with respect of to letters of credit, credit and bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments guarantees issued or created in the ordinary course of business, including without limitation letters of credit in respect of workers workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers workers’ compensation claims;
(p) obligations in respect ; provided, however, that upon the drawing of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of such letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practicesuch obligations are reimbursed within 30 days following such drawing;
(q6) letters the Incurrence of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not Indebtedness, Disqualified Stock or Preferred Stock arising from or related to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness agreements of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a)related to indemnification, (c) and (d) (as applicable) earn-outs, adjustment of the Applicable Requirementspurchase price or similar obligations, so long as no Default or Event of Default (limited in each case, Incurred in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults the acquisition or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds disposition of any borrowing under any such revolving credit facility) is no more than business, assets or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA Subsidiary of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09)the terms hereof, in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings other than Guarantees of Indebtedness incurred pursuant to Section 7.03(v)Incurred or Disqualified Stock or Preferred Stock issued by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding existing on the Closing SecondThird Amendment Effective Date and listed set forth on Schedule 7.03(b9.3(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofSecondThird Amendment Effective Date; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant subject to the Intercompany NoteSubordination Agreement;
(ci) Guarantees by the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any of the Restricted Subsidiaries otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 9.3(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 9.3); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth hereinin the Guaranty, and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness Indebtedness, and (Cii) any Guarantee Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a would have been permitted as an Investment by such Loan Party shall only be permitted to the extent constituting an Investment permitted by in such Restricted Subsidiary under Section 7.02(c)(iii9.2(c);
(d) Indebtedness of the Borrower or any of the Restricted Subsidiary Subsidiaries owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)9.2; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (yi) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with Intercompany Subordination Agreement and (ii) in the terms event of any such Indebtedness in respect of the Intercompany Notesale, transfer or assignment of Current Asset Collateral, such Indebtedness shall be duly noted on the books and records of the Loan Parties as being owing in respect of Current Asset Collateral;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any and the Restricted Subsidiary prior to or within 270 days after Subsidiaries financing the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset acquisition, construction, repair, replacement or improvement and any Permitted Refinancing thereof in an aggregate principal amount pursuant to this sub-clause (i) not to exceed the greater of $13,000,000 110,000,000 and 204.75% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Total Assets, in each case determined at the time date of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and incurrence, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m(other than sale-leaseback transactions with respect to any Designated Assets) with respect to properties acquired after the FirstThird Amendment Effective Date and any Permitted Refinancing thereof in an aggregate amount outstanding pursuant to this sub-clause (ii) at any time not to exceed the greater of such (x) $110,000,000 and (y) 4.75% of Total Assets, in each case determined at the date of incurrence, and (iii) Attributable IndebtednessIndebtedness arising out of sale-leaseback transactions with respect to any Designated Assets, and any Permitted Refinancing thereof;
(f) Indebtedness in respect of Swap Contracts designed to hedge against Holdings, the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of the Borrower and its Restricted Subsidiaries incurred in the ordinary course of business;
(ih) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.069.6;
(ji) Indebtedness incurred by Holdings the Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kj) Indebtedness consisting of obligations of Holdings or any of its the Borrower and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lk) Indebtedness in respect of Cash Management Obligations ObligationsServices, Bank Products and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(ml) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount that at the any time of, and after giving effect to, the incurrence thereof, would outstanding not to exceed the greater of $22,750,000 150,000,000 and 356.50% of Consolidated EBITDATotal Assets (determined at the time of incurrence); provided that a maximum of the greater of $58,000,000 and 2.50% of Total Assets (determined at the time of incurrence) in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties;
(nm) 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;
(on) Indebtedness incurred by the Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(po) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qp) letters of credit issued in currencies not available hereunder Indebtedness in an aggregate principal amount not to exceed (i) $900,000,000 plus (ii) the amount of (A) clauses (y) and (z) of the Maximum Incremental Amount (as defined in the Term Facility Credit Agreements as in effect on the FirstThird Amendment Effective Date or, subject to prior consent of the Administrative Agent and the FILO Documentation Agent, as in effect after the FirstThird Amendment Effective Date), (B) Permitted Pari Passu Secured Debt, (C) Secured Obligations under Secured Hedge Agreements and not incurred in violation of Section 9.3(f), (D) Obligations under Secured Cash Management Agreements and (E) Credit Agreement Refinancing Indebtedness (in the case of each of the foregoing clauses (A), (B), (C), (D) and (E), as capitalized terms not defined herein are defined in each of the Term Facility Credit Agreements), in each case, at any time outstanding and in respect of clauses (i) and (ii), any Permitted Refinancing thereof;
(q) Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the SecondThird Amendment Effective Date, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary (, other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the SecondThird Amendment Effective Date and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 9.1(p) and, in each case, any Permitted Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary incurred or assumed in connection with any Permitted Acquisition that is secured only by Liens permitted under Section 9.1(p) (and any Permitted Refinancing of the foregoing) and so long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this clause (g)(ii) does not exceed (x) $5,000,000110,000,000 and (y) 4.75% of Total Assets at any time outstanding;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness of all such Foreign Subsidiaries incurred pursuant to this Section 7.03(sclause (r) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 58,000,000 and 152.50% of Consolidated EBITDA Total Assets (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence);
(s) other secured, unsecured or subordinated Indebtedness of the Borrower or any Restricted Subsidiary (and any Permitted Refinancing thereof), so long as (A) the Payment Conditions shall have been satisfied after giving effect thereto, (B) the maturity date and Weighted Average Life to Maturity of such Indebtedness is at least six (6) months after the Latest Maturity Date at the time of incurrence of such Indebtedness, and (C) if such Indebtedness is secured, (i) any such Liens with respect to any Current Asset Collateral shall be junior to the Liens securing the Obligations and (ii) such Indebtedness is subject to an intercreditor agreement containing terms that are at least as favorable to the Secured Parties as those contained in the Intercreditor Agreement;
(t) Credit Agreement Refinancing Indebtedness[Reserved];
(u) Indebtedness incurred in reliance on respect of letters of credit issued for the Cumulative Credit;
(v) Indebtedness account of any of the Borrower or any Subsidiaries of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) Holdings to finance the purchase of the Applicable Requirements, Inventory so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(ax) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligationsunsecured, and (y) the aggregate principal amount of such Indebtedness shall does not exceed an amount the greater of $81,000,000 and 3.50% of Total Assets at any time;
(v) Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the FirstThird Amendment Effective Date, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary (other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the FirstThird Amendment Effective Date) and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 9.1(p) and, in each case, any Permitted Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary incurred or assumed in connection with any Permitted Acquisition that is secured only by Liens permitted under Section 9.1(p) (and any Permitted Refinancing of the foregoing) and so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a all Indebtedness resulting from any Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount Refinancing thereof at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(vclause (v)(ii) shall does not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.70,000,000; and
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w(v) above. Notwithstanding the foregoing, no Restricted Subsidiary that is a Non-Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Guarantor. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP. Notwithstanding anything to the contrary contained in this Agreement, Indebtedness incurred pursuant to the Term Facilities (and any Permitted Refinancing thereof) may only be incurred pursuant to Section 9.3(p);.
Appears in 1 contract
Sources: Credit Agreement (JOANN Inc.)
Indebtedness. CreateThe Borrower will not, and will not permit any Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(a) the Obligations, including without limitation, Indebtedness of created hereunder and under any other Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01, and extensions, renewals and replacements of any such Indebtedness that (xi) do not increase the outstanding principal amount thereof, and (ii) does not shorten the maturity or weighted average life to maturity thereof;
(c) Indebtedness outstanding on of (i) the Closing Date and listed on Schedule 7.03(bBorrower owing to any Guarantor, (ii) and any Permitted Refinancing thereof and Guarantor owing to the Borrower or any other Guarantor, (yiii) intercompany Indebtedness outstanding on any Loan Party to any Subsidiary (other than a Guarantor), (iv) of any Subsidiary (other than a Guarantor) owing to the Closing Date and Borrower or any Permitted Refinancing thereofother Subsidiary; provided provided, that any such intercompany Indebtedness permitted under subclause (iii) shall be subordinated to the Obligations on terms satisfactory to the Administrative Agent and shall have a maturity date after the Maturity Date; provided, further, that, any such Indebtedness permitted under subclause (iv) shall be subject to Section 6.04(c);
(d) Guarantees by the Borrower of Indebtedness of any Guarantor and by any Guarantor of Indebtedness of the Borrower or any other Guarantor; provided, that Guarantees by any Loan Party owed to of Indebtedness of any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii6.04(d);
(de) Indebtedness of the Borrower or any Restricted Subsidiary owing incurred to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in finance the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease replacement or improvement of a any fixed or capital asset assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness is incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after such acquisition or the acquisition, completion of such construction, repair, replacement, lease replacement or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding improvement and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to permitted by this Section 7.03(gclause (e) shall not exceed the greater of (x) $9,750,000 20,000,000 and (y) 155% of Consolidated EBITDA Total Assets at any time outstanding;
(f) Indebtedness of any Person that becomes a Subsidiary after the Borrower determined date hereof; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such incurrence on Person becoming a Pro Forma BasisSubsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this clause (f) shall not exceed the greater of (x) $20,000,000 and (y) 5% of Total Assets at any time outstanding;
(g) Indebtedness of Subsidiaries of Borrower that are not U.S. Persons in an aggregate principal amount not to exceed the greater of (i) $20,000,000 and (ii) 5% of the Total Assets (measured as of the date such Indebtedness is incurred) at any time outstanding;
(h) Indebtedness representing deferred compensation to employees of Holdings Hedging Obligations permitted by Section 6.05;
(i) endorsements for collection or any of its Restricted Subsidiaries incurred deposit in the ordinary course of business;
(ij) Indebtedness consisting obligations in respect of promissory notes issued performance, bid, appeal and surety bonds and performance and completion guarantees or obligations in respect thereto provided by Holdings either Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect the ordinary course of purchase price (including earn-outs) or other similar adjustmentsbusiness;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or 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, so long as ; provided that such Indebtedness is extinguished within 10 five (5) Business Days of its incurrence;
(l) Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, in each case entered into in connection with the disposition of any business, assets or Equity Interests permitted hereunder;
(m) Indebtedness arising from agreements providing for deferred consideration, indemnification, adjustments of purchase price (including “earnouts”) or similar obligations, in an aggregate principal amount that at the time of, each case entered into in connection with Permitted Acquisitions or other investments and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDAacquisitions permitted by this Agreement;
(n) obligations under an agreement to provide such Bank Products, Bank Products and other Indebtedness consisting in respect of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply netting services, automatic clearing house arrangements, employees’ credit or purchase cards, overdraft protections and similar arrangements in each case, case incurred in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries comprising reimbursement obligations in respect of letters of creditretention obligations or any casualty obligations, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability each case under any insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claimspolicy;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness secured by real property of the Borrower or any of its Restricted Subsidiaries that and is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) recourse to such real property in an aggregate amount not to exceed 75% of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence appraised value of such Indebtednessreal property outstanding at any time; provided that:and
(iq) if such other Indebtedness is secured on a pari passu in right of security with the Obligations, the an aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed exceeding the greater of (x) $9,750,000 25,000,000 and (y) 157.5% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined Total Assets at the any time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunderoutstanding. For purposes of determining compliance with this Section 6.01, in the calculations event that an item of Indebtedness when incurred meets the criteria of more than one of the categories of Indebtedness described in this Section 7.03(v)6.01, (A) with respect the Borrower may, in its sole discretion, classify such item as incurred in whole or in part pursuant to any Revolving Credit Commitmentsone or combination of such categories, a borrowing and may thereafter from time to time reclassify such item of Indebtedness, in whole or in part, into any one or more other categories, so long as such item of Indebtedness meets the maximum amount criteria for such other categories when reclassified. The Borrower will only be required to count any item of Loans available thereunder shall be assumed and (B) Indebtedness against the availability for any category of Indebtedness to the extent that, and for so long as, the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to Borrower has classified such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness item as incurred pursuant to such category. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);6.01.
Appears in 1 contract
Sources: Credit Agreement (Masimo Corp)
Indebtedness. CreateThe Borrower will not, incurand will not permit any Restricted Subsidiary to, assume directly or suffer to exist indirectly, incur any Indebtedness except the following (each of the following, “Permitted Indebtedness, except:”):
(a) Indebtedness of the Borrower and any Loan Party Guarantor under the ABL Facility (including reimbursement obligations with regard to letters of credit) incurred pursuant to this clause (a) in an aggregate principal amount at any time outstanding not to exceed $50,000,000;
(b) Indebtedness of the Borrower and any Guarantor incurred under this Agreement and the other Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.152.04 and Section 2.19 hereof);
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any and the Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations Subsidiaries listed on the terms set forth herein, (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);Schedule
(d) Indebtedness in respect of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but onlyHedge Contracts, in the case of Indebtedness of a non-Loan Party owing to a Loan Partyincluding, to the extent constituting an Investment permitted by Section 7.02(c)(iii)without limitation, Permitted Commodity Hedge Agreements and Permitted Interest Rate Hedge Agreements; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Hedge Contracts are designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities other commodity pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties the purpose of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)speculation;
(ge) Indebtedness of the Borrower owed to a Restricted Subsidiary and Indebtedness of any Restricted Subsidiary owed to the Borrower or any other Restricted Subsidiary; provided, that (i) upon any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or such Indebtedness being owed to any Person other than the Borrower or a Restricted Subsidiary, the Borrower or such Restricted Subsidiary, as applicable, shall be deemed to have incurred Indebtedness not permitted by this clause (e) and (ii) with respect to Foreign Subsidiaries, all such Indebtedness is (A) evidenced by a master intercompany note, in form and substance reasonably satisfactory to Agent (the “Intercompany Note”), and, if owed to a Loan Party, shall be subject to a first priority perfected Lien in favor of Administrative Agent pursuant to the Loan Documents, and (B) unsecured and subordinated in right of payment to the payment in full of the Obligations pursuant to the terms of the Intercompany Note;
(f) Indebtedness in respect of bid, letters of credit, performance or surety bonds issued for the account of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business, including Guarantees or obligations of the Borrower or any Restricted Subsidiary with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(ig) Purchase Money Indebtedness consisting of promissory notes issued incurred by Holdings the Borrower or any Restricted Subsidiary (other than the HNZ Group), and Refinancing Indebtedness thereof, in an aggregate amount not to exceed at any time outstanding the greater of its (a) $20,000,000 and (b) 5% of the aggregate net book value of the Aircraft owned by the Borrower and the Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06Subsidiaries;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(lh) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or (i) 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 businessbusiness or (ii) in respect of netting services, so long as automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts; provided, that such Indebtedness is extinguished within 10 five Business Days of its incurrence;
(mi) Indebtedness arising in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater connection with endorsement of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, instruments for deposit in the ordinary course of business;
(oj) Refinancing Indebtedness with respect to Indebtedness incurred pursuant to clause (c) above or this clause (j);
(k) Indebtedness incurred by Foreign Subsidiaries in an aggregate principal amount not to exceed $15,000,000 as long as (i) no Loan Parties (A) provides any Guarantee or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (B) is directly or indirectly liable (as a guarantor or otherwise) for such Indebtedness; (ii) the Borrower or incurrence of which will not result in any recourse against any of the assets of any Loan Party and (iii) no default with respect to which would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of any Loan Party to declare pursuant to the express terms governing such Indebtedness a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Restricted Subsidiaries stated maturity;
(l) Indebtedness issued to insurance companies, or their affiliates, to finance insurance premiums payable to such insurance companies in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created connection with insurance policies purchased by a Loan Party 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;
(pm) obligations in respect Junior Indebtedness to the extent that, at the time such Indebtedness is incurred, the Consolidated Net Total Leverage Ratio determined on a pro forma basis giving effect to such incurrence and the application of performancethe proceeds thereof, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practicewould not exceed 3.50 to 1.0;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(vn) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses Subsidiary (a), (cother than the HNZ Group) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred an aggregate amount not to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and exceed $25,000,000 in aggregate principal amount at any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:time outstanding;
(i) if such Indebtedness is (in the form of (x) one or more series of notes which may be unsecured or secured on a pari passu in right of security junior Lien basis with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 Loans or (y) to the extent incurred in connection with a Permitted Acquisition one or other Investment permitted hereunder, the greater more series of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition loans which may be unsecured or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior Lien basis with respect to the Loans) incurred by the Borrower at any time in right of security with the Obligations, the an aggregate principal amount not exceeding the sum of (1) the Incremental Amount available at such time plus (2) any amounts so long as immediately after giving effect to the establishment of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or utilizing this clause (2) to and the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunderuse of proceeds of the Indebtedness thereunder, the greater of (I) 4.25:1.00 and (II) the pro forma Consolidated Net Total Net Leverage Ratio immediately prior is not greater than 2.00 to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment1.00; provided that (A) for purposes of the aggregate principal amount at any time outstanding foregoing clause (2), the Net Proceeds of such Indebtedness shall not be netted for purposes of Subsidiaries such calculation of the Consolidated Net Total Leverage Ratio, (B) amounts may be established or incurred utilizing clause (2) above prior to utilizing clause (1) above (it being understood that any portion of any Indebtedness incurred in reliance on clause (1) may be reclassified, as the Borrower may elect from time to time, as incurred under clause (2) if the Borrower meets the applicable leverage ratio under clause (2) at such time on a pro forma basis, (C) such Indebtedness shall not mature or have any scheduled amortization and is not subject to mandatory redemption, repurchase, prepayment or sinking fund obligation prior to the date that is 91 days after the Latest Maturity Date at the time such Indebtedness is incurred (other than customary offers to repurchase upon a change of control, asset sale or casualty event and customary acceleration rights after an event of default), (D) as of the date of the incurrence of such Indebtedness, the weighted average life to maturity of such Indebtedness shall not be shorter than that of the Loans, (E) no Restricted Subsidiary is a guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Guarantor, (F) if secured, such Indebtedness shall not be secured by any Liens on any property or assets that are non-Loan Parties incurred pursuant not part of the Collateral, (G) if secured or subordinated to this Section 7.03(vthe Obligations, such Indebtedness shall be subject to an intercreditor or subordination agreement (as applicable) in form and substance reasonably satisfactory to the Administrative Agent and Collateral Agent, (H) all other terms and conditions of such Indebtedness (excluding pricing, fees, rate floors and optional prepayment or redemption terms) shall be substantially identical to, or not exceed materially more favorable, taken as a whole, (as reasonably determined by the greater Borrower) to the lenders or holders providing such Incremental Equivalent Debt than, the terms applicable to the existing Loans unless such more favorable terms are also added to the Loan Documents for the benefit of the Lenders (except for covenants or other provisions applicable only to periods after the Maturity Date, it being understood that to the extent that any financial maintenance covenant is added for the benefit of any Incremental Equivalent Debt, no consent from the Administrative Agent or any Lender shall be required to the extent that such covenant shall also apply for the benefit of the Loans), except, in the case of Incremental Equivalent Debt in the form of notes, such terms and conditions reflect market terms and conditions at the time of such incurrence or issuance (as reasonably determined by the Borrower),
(I) if secured on a pari passu basis with the Loans, if the initial yield on such Indebtedness (as determined by the Administrative Agent to be equal to the sum of (x) $9,750,000 the margin above the Adjusted LIBO Rate on such Indebtedness and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is incurred at a term loan that is not subordinated in right of payment to discount or the Loan Documents and that is secured by Lenders making the same receive a Lien on fee directly or indirectly from the Collateral that ranks pari passu in right of security with the Term LoansBorrower or any Subsidiary for providing such Indebtedness, the Term Loans shall be subject amount of such OID divided by the lesser of (1) the average life to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if maturity of such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);and
Appears in 1 contract
Sources: Credit Agreement
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any Loan Party of its Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) Indebtedness of the Borrowers in respect of the Senior Secured Notes (xand Guarantees thereof by the Guarantors) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiary Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunderhereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth hereinthat, (B) if the Indebtedness being Guaranteed guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness;
(Ce) any Guarantee by a Loan Party of Indebtedness of a the Parent Borrower or any Restricted Subsidiary that is not a Loan Party shall only be permitted owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms set forth in Section 3.01 of the Intercompany NoteGuaranty;
(ef) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09acquisition, construction, repair, replacement or improvement), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(mPermitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $500,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of such Attributable Indebtedness;
(f) any Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred set forth in the ordinary course of business immediately preceding clauses (i) and not for speculative purposes and Guarantees thereof(ii); provided that any such Guarantees by Loan Parties the aggregate principal amount of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed including without limitation Attributable Indebtedness, such but excluding Attributable Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect pursuant to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g7.03(f) shall does not exceed the greater of (x) $9,750,000 350,000,000 and (y) 1520.0% of Consolidated EBITDA of the Parent Borrower determined at for the time most recently ended Test Period;
(g) Indebtedness in respect of such incurrence on a Pro Forma BasisSwap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of Holdings the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.067.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(jk) Indebtedness incurred by Holdings the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of obligations of Holdings the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case incurred in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDAcourse;
(n) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) unless (A) such Indebtedness is an increase in the amount of the New Senior Secured Notes or (B) the amount of such Indebtedness at the time of incurrence thereof does not exceed the Earlier Maturing Basket Amount at such time, such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B-34 Loans, the Term A Loans or the Revolving Credit Commitments or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B-34 Loans, the Term A Loans or the Revolving Credit Commitments plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B-34 Loans, the Term A Loans or the Revolving Credit Commitments, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $750,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) unless (1) such Indebtedness is an increase in the amount of the New Senior Secured Notes or (2) the amount of such Indebtedness at the time of incurrence thereof does not exceed the Earlier Maturing Basket Amount at such time, such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B-34 Loans, the Term A Loans or the Revolving Credit Commitments, (B) unless (1) such Indebtedness is an increase in the amount of the New Senior Secured Notes or (2) the amount of such Indebtedness at the time of incurrence thereof does not exceed the Earlier Maturing Basket Amount at such time, as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B-34 Loans, the Term A Loans or the Revolving Credit Commitments, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is a non-Loan Party which, when aggregated pari passu with the principal amount Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all other relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
clause (t) Credit Agreement being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing Indebtednessthereof;
(u) additional Indebtedness incurred in reliance on an aggregate principal amount not to exceed the Cumulative Creditgreater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred assumed in connection with a Permitted Acquisition or other Investment permitted hereunderAcquisition, the greater of provided that (Ii) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior after giving Pro Forma Effect to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if and such Indebtedness is secured on a junior basis in right of security with the ObligationsIndebtedness, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Total Leverage Ratio (determined calculated on a Pro Forma Basis) as of the most recent Test Period is no more than either (x) 4.00:1.00 not greater than 7.00:1.00 or (y) to not greater than the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Total Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or other Investment; provided assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the aggregate principal amount at any time outstanding First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.50:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of Subsidiaries that are non-the Loan Parties Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(v7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $9,750,000 400,000,000 and (y) 1525.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(determined on i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Pro Forma Basis Loan Party to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 1.092.05(b)(iii), in each case determined ; provided that (A) unless the amount of such Indebtedness at the time of incurrence and thereof does not exceed the Earlier Maturing Basket Amount at such time (in which case, such Indebtedness may have an earlier final maturity so long as such maturity date is not prior to the Maturity Date of the Revolving Credit Commitments then in effect), such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) provided that if unless the amount of such Indebtedness at the time of incurrence thereof does not exceed the Earlier Maturing Basket Amount at such time (in which case, such Indebtedness may have a shorter Weighted Average Life to Maturity so long as such Weighted Average Life to Maturity is not less than three (3) years), as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a term loan that borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is not subordinated in right a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of payment such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the Loan Documents maturity date of the Term Loans being refinanced) reflect market terms and that is secured by a Lien conditions on the Collateral that ranks pari passu date of issuance and such Indebtedness shall not participate in right of security mandatory prepayments on a greater than pro rata basis with the Term Loans, Loans and (E) the Term Loans shall be subject Parent Borrower has delivered to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);demonstrating com
Appears in 1 contract
Sources: Credit Agreement (Restaurant Brands International Limited Partnership)
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding existing on the Closing Second Restatement Date and listed set forth on Schedule 7.03(b9.3(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofSecond Restatement Date; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant subject to the Intercompany NoteSubordination Agreement;
(c) (i) Guarantees by the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any of the Restricted Subsidiaries otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 9.3(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 9.3); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth hereinin the Guaranty, and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness Indebtedness, and (Cii) any Guarantee Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a would have been permitted as an Investment by such Loan Party shall only be permitted to the extent constituting an Investment permitted by in such Restricted Subsidiary under Section 7.02(c)(iii9.2(c);
(d) Indebtedness of the Borrower or any of the Restricted Subsidiary Subsidiaries owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)9.2; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (yi) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with Intercompany Subordination Agreement and (ii) in the terms event of any such Indebtedness in respect of the Intercompany Notesale, transfer or assignment of Current Asset Collateral, such Indebtedness shall be duly noted on the books and records of the Loan Parties as being owing in respect of Current Asset Collateral;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any and the Restricted Subsidiary prior to or within 270 days after Subsidiaries financing the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset acquisition, construction, repair, replacement or improvement and any Permitted Refinancing thereof in an aggregate principal amount pursuant to this sub-clause (i) not to exceed the greater of $13,000,000 110,000,000 and 204.75% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Total Assets, in each case determined at the time date of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and incurrence, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m(other than sale-leaseback transactions with respect to any Designated Assets) with respect to properties acquired after the Second Restatement Date and any Permitted Refinancing thereof in an aggregate amount outstanding pursuant to this sub-clause (ii) at any time not to exceed the greater of such (x) $110,000,000 and (y) 4.75% of Total Assets, in each case determined at the date of incurrence, and (iii) Attributable IndebtednessIndebtedness arising out of sale-leaseback transactions with respect to any Designated Assets, and any Permitted Refinancing thereof;
(f) Indebtedness in respect of Swap Contracts designed to hedge against Parent, Holdings, the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of the Borrower and its Restricted Subsidiaries incurred in the ordinary course of business;
(ih) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.069.6;
(ji) Indebtedness incurred by Holdings the Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kj) Indebtedness consisting of obligations of Holdings or any of its the Borrower and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lk) Indebtedness in respect of Cash Management Obligations Services, Bank Products and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(ml) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount that at the any time of, and after giving effect to, the incurrence thereof, would outstanding not to exceed the greater of $22,750,000 150,000,000 and 356.50% of Consolidated EBITDATotal Assets (determined at the time of incurrence); provided that a maximum of the greater of $58,000,000 and 2.50% of Total Assets (determined at the time of incurrence) in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties;
(nm) 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;
(on) Indebtedness incurred by the Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(po) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qp) letters of credit issued in currencies not available hereunder Indebtedness in an aggregate principal amount not to exceed (i) $153,771,192.63 plus (ii) the amount of (A) the Maximum Incremental Amount (as defined in the Term Facility Credit Agreement as in effect on the Second Restatement Date or, subject to prior consent of the Administrative Agent and the FILO Documentation Agent, as in effect after the Second Restatement Date), (B) Permitted Pari Passu Secured Debt, (C) Indebtedness under Secured Hedge Agreements not incurred in violation of Section 9.3(f), (D) Cash Management Obligations not incurred in violation of Section 9.3(k), (E) Credit Agreement Refinancing Indebtedness, (F) Incremental Exit Loans in an aggregate principal amount not to exceed $10,500,000, and (G) Erroneous Payment Return Deficiency (in the case of each of the foregoing clauses (A), (B), (C), (D), (E), (F), and (G), as capitalized terms not defined herein are defined in the Term Facility Credit Agreement), in each case, at any time outstanding and in respect of clauses (i) and (ii), any Permitted Refinancing thereof;
(q) Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the Second Restatement Date, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary, other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the Second Restatement Date and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 9.1(p) and, in each case, any Permitted Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary incurred or assumed in connection with any Permitted Acquisition that is secured only by Liens permitted under Section 9.1(p) (and any Permitted Refinancing of the foregoing) and so long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this clause (g)(ii) does not exceed (x) $5,000,000110,000,000 and (y) 4.75% of Total Assets at any time outstanding;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness of all such Foreign Subsidiaries incurred pursuant to this Section 7.03(sclause (r) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 58,000,000 and 152.50% of Consolidated EBITDA Total Assets (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence);
(s) other secured, unsecured or subordinated Indebtedness of the Borrower or any Restricted Subsidiary (and any Permitted Refinancing thereof), so long as (A) the Payment Conditions shall have been satisfied after giving effect thereto, (B) the maturity date and Weighted Average Life to Maturity of such Indebtedness is at least six (6) months after the Latest Maturity Date at the time of incurrence of such Indebtedness, and (C) if such Indebtedness is secured, (i) any such Liens with respect to any Current Asset Collateral shall be junior to the Liens securing the Obligations and (ii) such Indebtedness is subject to an intercreditor agreement containing terms that are at least as favorable to the Secured Parties as those contained in the Intercreditor Agreement;
(t) Credit Agreement Refinancing Indebtedness[Reserved];
(u) Indebtedness incurred in reliance on respect of letters of credit issued for the Cumulative Credit;
(v) Indebtedness account of any of the Borrower or any Subsidiaries of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) Holdings to finance the purchase of the Applicable Requirements, Inventory so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(ax) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligationsunsecured, and (y) the aggregate principal amount of such Indebtedness shall does not exceed an amount the greater of $81,000,000 and 3.50% of Total Assets at any time;
(v) Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the Second Restatement Date, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary (other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the Second Restatement Date) and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 9.1(p) and, in each case, any Permitted Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary incurred or assumed in connection with any Permitted Acquisition that is secured only by Liens permitted under Section 9.1(p) (and any Permitted Refinancing of the foregoing) and so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a all Indebtedness resulting from any Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount Refinancing thereof at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(vclause (v)(ii) shall does not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.70,000,000; and
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w(v) above. Notwithstanding the foregoing, no Restricted Subsidiary that is a Non-Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Guarantor. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP. Notwithstanding anything to the contrary contained in this Agreement, Indebtedness incurred pursuant to the Term Facility (and any Permitted Refinancing thereof) may only be incurred pursuant to Section 9.3(p);.
Appears in 1 contract
Sources: Credit Agreement (JOANN Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party of any Permitted Ratio Debt or Indebtedness under Section 7.03(g) or (m) (or any Permitted Refinancing in respect thereof) shall only be permitted to if such Guarantee meets the extent constituting an Investment permitted by requirements of clauses (s), (g) or (m), as the case may be, of this Section 7.02(c)(iii)7.03;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note constitutes a negotiable instrument and is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of $13,000,000 15,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)LTM EBITDA, in each case AMERICAS 94626185 determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback sale‑leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary (i) assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; (provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment Acquisition) or any Permitted Refinancing thereof or (ii) incurred to finance any Permitted Acquisition or any Permitted Refinancing thereof; provided that after giving Pro Forma Effect pro forma effect to such Permitted Acquisition and the assumption or incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) $50,000,000, plus (y) any additional amount of such Indebtedness so long as the greater of $16,250,000 and 25% of Consolidated EBITDA Total Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.091.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation) plus is no greater than 5.50 to 1.00, and, (yI) additional indebtedness so long if such Indebtedness is designated as “Additional First Lien Debt” under (and as defined in) the Closing Date Intercreditor Agreement, the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation and treating all refinancing Indebtedness in respect of such Indebtedness that is unsecured or secured on a junior lien basis to the Term Loans as at all times being secured on a first priority basis (unless the Borrower complies with the Consolidated Total Net Leverage Ratio described in preceding clause (y) above or the Consolidated Total Secured Net Leverage Ratio described in subclause (II) below, as the case may be, at the time of the incurrence of such refinancing Indebtedness)) is no greater than 3.75 to 1.00 or (II) if such Indebtedness is designated as “Additional Second Lien Debt” under (and as defined in) the Closing Date Intercreditor Agreement and the Consolidated Total Secured Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation and treating all refinancing Indebtedness in respect of such Indebtedness that is unsecured as at all times being secured on a junior lien basis to the Facilities (unless the Borrower complies with the Consolidated Total Net Leverage Ratio described in preceding clause (y) above at the time of the incurrence of such refinancing Indebtedness) is no greater than 4.50 to 1.00, in each case determined on a Pro Forma Basis; provided that in the case of clause (y), any such Indebtedness assumed or incurred by a Restricted Subsidiary that is not a Loan Party (together with any Indebtedness assumed or incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(s) and (u) (and any Permitted Refinancing of the foregoing, to the extent assumed or incurred by a Restricted Subsidiary that is not a Loan Party)) does not exceed in the aggregate at any time outstanding the greater than 4.25:1:00of $50,000,000 and 50% of LTM EBITDA, in each case determined at the time of such assumption or incurrence; provided, on a Pro Forma Basis in accordance with Section 1.09; provided thatfurther, that in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the remaining Weighted Average Life to Maturity of any then outstanding Term Loan outstanding at Loans and meets the time such Indebtedness is incurred or issuedPermitted Other Debt Conditions, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be Permitted Acquisition or a permitted Investment made pursuant to a legally binding commitment entered into a that time when no Event of Default under Section 8.01(a) exists or 8.01(fwould result therefrom)) and , (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed be in the greater form of (x) $9,750,000 one or more series of notes which may be unsecured, secured on a junior lien basis with the Facilities or secured on a pari passu basis with the Facilities or (y) one or more series of loans which may be unsecured or secured on a junior lien basis with respect to the Facilities, (D) in no event will any such Indebtedness incurred by a Loan Party be permitted to be mandatorily prepaid prior to the repayment in full of the Initial Term Loans, except (in AMERICAS 94626185 the case of any such Indebtedness secured on a pari passu basis with the Facilities only) if accompanied by at least a ratable payment of the Initial Term Loans and (E) the terms of any such Indebtedness that are not substantially identical to the then existing Loans shall be no less favorable (taken as a whole) to the Lenders under the then existing Loans than those applicable to the then existing Loans or otherwise reasonably acceptable to the Administrative Agent (except for (x) covenants or other provisions applicable only to periods after the Maturity Date of the Initial Term Loans existing at the time of incurrence of such Indebtedness and (y) 15% of Consolidated EBITDA any financial maintenance covenant to the extent such covenant is also added for the benefit of the Borrower Initial Term Loan Lenders hereunder) or reflect market terms on the date of issuance, as determined at by the time of such incurrence on a Pro Forma BasisBorrower;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06; provided that such Indebtedness shall be subordinated in right of payment to the Obligations on terms reasonably satisfactory to the Administrative Agent;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger hereunder (including through a merger) or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries 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;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days in the ordinary course of its incurrencebusiness;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 25,000,000 and 35% of Consolidated EBITDALTM EBITDA determined at the time of incurrence;
(n) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay take‑or‑pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance self‑insurance or other Indebtedness with respect to reimbursement-type reimbursement‑type obligations regarding workers workers’ compensation claims;; AMERICAS 94626185
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder a currency other than Dollars or an Approved Alternate Currency in an aggregate amount at any time outstanding not to exceed $5,000,0002,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s7.03(u) and then outstanding for all such Persons taken togethertogether and all Indebtedness assumed or incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(g) in reliance on clause (y) thereof and Section 7.03(s) (and any Permitted Refinancing of the foregoing, to the extent assumed or incurred by a Restricted Subsidiary that is not a Loan Party), does not exceed the greater of $9,750,000 50,000,000 and 1550% of Consolidated LTM EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower and its Restricted Subsidiaries in respect of seller financing and any Permitted Refinancing in respect thereof in an aggregate amount not to exceed $7,500,000 at any time outstanding;
(i) Indebtedness under the Second Lien Credit Agreement (including any Second Lien Incremental Term Loans under and pursuant to, and in accordance with the terms of, the Second Lien Credit Agreement), (ii) any Second Lien Incremental Equivalent Debt, (iii) any Second Lien Credit Agreement Refinancing Indebtedness, (iv) any Second Lien Permitted Debt Exchange Notes and (v) any Permitted Refinancing in respect of any of the foregoing Indebtedness (other than Second Lien Credit Agreement Refinancing Indebtedness);
(x) Indebtedness in an amount equal to 100% of the Net Proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than proceeds of Disqualified Equity Interests, the Cure Amount or sales of Equity Interests to Holdings or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses Subsidiaries) to the extent such Net Proceeds or cash have been contributed, directly or indirectly, to common equity capital of the Borrower and have not been applied pursuant to Section 7.02, 7.06 or 7.13 (a), (c) and (ddo not otherwise increase the Cumulative Credit or the Excluded Contribution and are not used to fund Equity Funded Employee Plan Costs) (“Contribution Indebtedness”); provided that such Indebtedness is designated as applicable) “Contribution Indebtedness” in a certificate from a Responsible Officer of the Applicable Requirements, so long as no Default or Event of Default Borrower on the date incurred;
(limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(ay) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is in the form of (x) one or more series of notes which may be unsecured, secured on a junior lien basis with the Facilities or secured on a pari passu in right of security basis with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 Facilities or (y) to the extent incurred in connection with a Permitted Acquisition one or other Investment permitted hereunder, the greater more series of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition loans which may be unsecured or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior lien basis in right of security with respect to the Obligations, Facilities incurred by the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) Borrower to the extent incurred in connection with a Permitted Acquisition or other Investment that the Borrower shall have been permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if incur such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as pursuant to and in reliance on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other InvestmentSection 2.14(d)(iv); provided that (A) such AMERICAS 94626185 Indebtedness shall not mature earlier than the aggregate principal amount at any time outstanding Maturity Date applicable to the Initial Term Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of Subsidiaries the Initial Term Loans, (C) no Person is a borrower or guarantor with respect to such Indebtedness unless such Person is a Guarantor which shall have previously or substantially concurrently Guaranteed the Obligations, (D) such Indebtedness shall not be secured by any Lien on any property or asset that are non-Loan Parties does not constitute Collateral securing the Facilities, (E) in no event will any Incremental Equivalent Debt be permitted to be mandatorily prepaid prior to the repayment in full of the Initial Term Loans, except (in the case of Incremental Equivalent Debt secured on a pari passu basis with the Facilities only) if accompanied by at least a ratable payment of the Initial Term Loans and (F) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance (as determined by the Borrower) (such Indebtedness incurred pursuant to this Section 7.03(vclause (y)) shall not exceed the greater of (xbeing referred to as “Incremental Equivalent Debt”) $9,750,000 and (yii) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)Refinancing thereof;
(xz) all premiums [reserved];
(if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on aa) obligations described in Sections 7.03(a) through 7.03(w);respect of Disqualified Equity Interests in an amount not to exceed $2,
Appears in 1 contract
Sources: First Lien Credit Agreement (Jason Industries, Inc.)
Indebtedness. CreateNone of the Borrower and the Restricted Subsidiaries shall directly or indirectly create, incur, assume or suffer to exist any Indebtedness, except:
(a) (i)(A) Indebtedness of any Loan Party under the Loan Documents and Secured Loan Document Hedge Obligations and (including B) Indebtedness constituting NDB Revolving Obligations, the revolving commitments in respect of which shall not exceed an aggregate outstanding principal amount of $100,000,000 at any Indebtedness time, and (ii) Term Obligations the loans in respect of which shall not exceed an aggregate outstanding principal amount at any time of the sum of (A) $1,725,000,000 plus (B) the Permitted Incremental Availability Amount; provided that Term Obligations shall (x) be subject to the Collateral Agency and Intercreditor Agreement, (y) not be incurred pursuant to Section 2.14 by a non-Loan Party or 2.15)guaranteed by a Person that is not a Guarantor unless such Person also guarantees the Obligations and (z) not be secured by assets that do not constitute Collateral;
(b) (xi) Indebtedness outstanding on the Closing First Amendment Effective Date and listed on Schedule 7.03(b7.3(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing First Amendment Effective Date and any Permitted Refinancing refinancing thereof, of which any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder; provided that (Ai) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, herein and (Bii) if the Indebtedness being Guaranteed guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.2; provided that (x) no all such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the an Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset in an aggregate amount not to exceed the greater of (x) $13,000,000 70,000,000 and 20(y) 35% of LTM Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09after giving effect to any concurrent Investments), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and outstanding, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m7.5(l), and (iii) and any Permitted Refinancing of such Attributable Indebtednessany of the foregoing;
(f) Indebtedness in respect of Swap Contracts Hedging Transactions designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities other commodity pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary that is a Loan Party incurred or assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunderAcquisition, and any Permitted Refinancing thereof; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect pro forma effect to such Permitted Acquisition and the incurrence or assumption of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum greater of (xi) the greater of $16,250,000 70,000,000 and 25(ii) 35% of LTM Consolidated EBITDA EBITDA; provided, further, that any Indebtedness incurred (determined on a Pro Forma Basis in accordance with Section 1.09but not assumed) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(gclause (g) shall not exceed be subject to the greater requirements included in the first proviso under the definition of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis“Permitted Ratio Debt”;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower (or any direct or indirect parent thereof) or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors directors, and employees, their respective estates, spouses spouses, or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.067.6;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other connection with an Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment Investments expressly permitted hereunder;
(l) Cash Management Obligations cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(m) Indebtedness of the Borrower or any of its Restricted Subsidiaries, in an aggregate principal amount at any time outstanding that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of (i) $22,750,000 95,000,000 and 35(ii) 45% of LTM Consolidated EBITDAEBITDA at such time (after giving effect to any concurrent Investments), together with any Permitted Refinancing thereof;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability disability, or other employee benefits or property, casualty or liability insurance or self-insurance insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within thirty (30) days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal appeal, and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower and/or any 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 its Restricted Subsidiaries that is a Loan Party that complies with clauses (asuch notes), (c) and (d) (as applicable) of the Applicable Requirementsjunior secured or unsecured “mezzanine” loans or notes or senior unsecured or subordinated loans or notes, so long as no Default in each case, pursuant to an indenture, interim agreement, loan agreement, syndicated credit agreement, note purchase agreement or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) otherwise and any other Default or Event extensions, renewals, refinancings and replacements thereof, including in the case of Default that is a condition to any such notes, any Registered Equivalent Notes (the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness“Incremental Equivalent Debt”); provided that:
that (i) if any such Indebtedness Incremental Equivalent Debt that is secured shall not be secured by any property or assets of Holdings, the Borrower or any Restricted Subsidiary other than the Collateral securing the Obligations, (ii) in the case of Incremental Equivalent Debt secured on a pari passu in right of security basis with the ObligationsLoans (“Incremental Equivalent First Lien Debt”), have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Term Loans (without giving effect to any prior payments that would otherwise modify such Weighted Average Life to Maturity) and, in the case of Incremental Equivalent Debt that is secured on a junior lien basis with the Loans or is unsecured (“Incremental Equivalent Junior Lien Debt”), shall not be subject to scheduled amortization prior to maturity; provided that the foregoing requirements of this clause (ii) shall not apply to the extent such Indebtedness constitutes Extendable Bridge Loans (as defined in the Term Credit Agreement as of the First Amendment Effective Date) or any facility in respect thereof, (iii) in the case of Incremental Equivalent First Lien Debt, have a maturity date that is after the Revolving Commitment Termination Date at the time such Indebtedness is incurred, and in the case of Incremental Equivalent Junior Lien Debt, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date (as defined in the Term Credit Agreement as of the First Amendment Effective Date) at the time such Indebtedness is incurred; provided that the foregoing requirements of this clause (iii) shall not apply to the extent such Indebtedness constitutes Extendable Bridge Loans (as defined in the Term Credit Agreement as of the First Amendment Effective Date) or any facility in respect thereof, (iv) the aggregate outstanding principal amount of all Incremental Equivalent Debt incurred in accordance with this Section 7.3(q), together with the aggregate principal amount of such Indebtedness all Incremental Commitments shall not exceed an amount so long the Permitted Incremental Availability Amount, (v) the security agreements, if applicable, relating to such Indebtedness are substantially the same as on and the Collateral Documents (with such differences as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) reasonably satisfactory to the extent incurred in connection with a Permitted Acquisition or Administrative Agent), (vi) such Indebtedness is not guaranteed by any Person other Investment permitted hereunderthan the Guarantors, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iivii) if such Indebtedness Incremental Equivalent Debt is secured on a junior basis in right of security with the Obligationssecured, the aggregate principal amount Other Debt Representative acting on behalf of the holders of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) have become party to the extent incurred Collateral Agency and Intercreditor Agreement and/or Junior Lien Intercreditor Agreement, as applicable, (viii) in connection with a Permitted Acquisition or other Investment permitted hereunderthe case of Incremental Equivalent First Lien Debt in the form of term loans, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment MFN Protection (if applicable) set forth as defined in the proviso to Section 2.14(e)(iiiTerm Credit Agreement on the date hereof) as if such Indebtedness were an Permitted Incremental Term Loan incurred thereunder. For purposes Loans, (ix) after giving effect to incurrence of Incremental Equivalent Debt, no Event of Default shall exist and be continuing or would immediately result from incurrence of such Incremental Equivalent Debt or from the application of the calculations proceeds therefrom; provided that if the proceeds of such Incremental Equivalent Debt are being used to finance a Permitted Acquisition, Investment, or irrevocable repayment, repurchase or redemption, there shall be no requirement to satisfy any or all conditions set forth in this clause (ix) except that the requirement that no Event of Default under Section 7.03(v8.1(a), (Ab), (g) or (i) with respect to any Revolving Credit Commitments, a borrowing the Borrower shall have occurred and be continuing or would exist after giving effect to the incurrence of such Incremental Equivalent Debt shall not be omitted or waived without the consent of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay IndebtednessRequired Lenders, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if anyexcept as otherwise set forth in this Section 7.3(q), interest the terms and conditions of such Incremental Equivalent Debt shall be customary as of the date of incurrence of such Incremental Equivalent Debt and (including post-petition interestxi) subject to clauses (ii), (iii) and (viii) above, the amortization, pricing, rate floors, discounts, fees, expensespremiums, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w)optional prepayment and redemptions provisions applicable to such Incremental Equivalent Debt shall be determined by the Borrower and the holders of such Incremental Equivalent Debt, together with any Permitted Refinancing thereof;
Appears in 1 contract
Sources: Revolving Credit Agreement (WaterBridge Infrastructure LLC)
Indebtedness. Create, issue, incur, assume assume, or suffer permit to exist or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness, exceptIndebtedness or issue any shares of Disqualified Capital Stock or permit any Restricted Subsidiary to issue any shares of Disqualified Capital Stock: The foregoing limitations will not apply to:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15);
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary pursuant to any Loan Document or Hedge Agreement or in respect of any Cash Management Obligations;
(b) Indebtedness (i) of the Borrower to any of its Restricted Subsidiaries or Holdings or of any Subsidiary Guarantor to Holdings, the Borrower or any Restricted Subsidiary otherwise permitted hereunder; Subsidiary, provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of owing to a Restricted Subsidiary that is not a Loan Party shall only be permitted Subsidiary Guarantor is expressly subordinated in right of payment to the extent constituting an Investment Obligations pursuant to the Subordinated Intercompany Note and (ii) of any Non-Guarantor Subsidiary to any other Non- Guarantor Subsidiary;
(c) Capital Lease Obligations and purchase money Indebtedness secured by Liens permitted by Section 7.02(c)(iii)7.3(h) in an aggregate principal amount not to exceed $25,000,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on Schedule 7.2(d) and any Permitted Refinancing thereof;
(e) Guarantee Obligations (i) by the Borrower or any of its Restricted Subsidiaries of obligations of the Borrower or any Subsidiary Guarantor otherwise permitted to be incurred by such Borrower or such Subsidiary Guarantor and (ii) by any Non-Guarantor Subsidiary of obligations of any other Non-Guarantor Subsidiary, provided in each case that if such Indebtedness is required to be unsecured and/or subordinated to the Obligations hereunder, such Guarantee Obligations shall also be unsecured and/or subordinated to the Obligations;
(f) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn by the Borrower or such Restricted Subsidiary in the ordinary course of business against insufficient funds funds, so long as such Indebtedness is promptly repaid;
(A) Indebtedness of any joint venture or Non-Guarantor Subsidiary owing to the Borrower or any Subsidiary Guarantor and (B) Guarantee Obligations of the Borrower or any Subsidiary Guarantor of Indebtedness of any joint venture or Non-Guarantor Subsidiary, to the extent such Indebtedness and Guarantee Obligations are permitted as Investments by Sections 7.7(c), (h), (k), (m) or (u);
(h) Indebtedness in the form of earn-outs, indemnification, incentive, non-compete, consulting or other similar arrangements and other contingent obligations in respect of acquisitions or Investments permitted by Section 7.7 (both before or after any liability associated therewith becomes fixed);
(i) (i) (x) Indebtedness of the Borrower in respect of the Second Lien Credit Agreement in an aggregate principal amount not to exceed $250,000,000 and (y) Indebtedness of the Borrower pursuant to Sections 2.25 and 7.2(bb) of the Second Lien Credit Agreement, (ii) Guarantee Obligations of any Subsidiary Guarantor in respect of such Indebtedness and (iii) any Permitted Refinancing thereof;
(j) Additional Indebtedness of the Borrower or any of its Restricted Subsidiaries in an aggregate principal amount (for the Borrower and all Restricted Subsidiaries), not to exceed $12,500,000 at any time outstanding which Indebtedness may be secured by assets not constituting Collateral;
(k) Indebtedness of Non-Guarantor Subsidiaries in respect of local lines of credit, letters of credit, bank guarantees, factoring arrangements, sale/leaseback transactions and similar extensions of credit in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that not to exceed $17,500,000 at the any one time of, and after giving effect to, the incurrence thereof, would outstanding which Indebtedness may be secured by assets not exceed the greater of $22,750,000 and 35% of Consolidated EBITDAconstituting Collateral;
(nl) Indebtedness consisting of (i) the financing Borrower or any of insurance premiums its Restricted Subsidiaries in respect of workers’ compensation claims, bank guarantees, warehouse receipts or (ii) similar facilities, property casualty or liability insurance, take-or-pay obligations contained in supply arrangements, self-insurance obligations, performance, bid, customs, government, appeal and surety bonds, completion guaranties and other obligations of a similar nature, in each case, case in the ordinary course of business;
(om) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect arising from agreements providing for indemnification related to sales of letters goods or adjustment of credit, bank guarantees, bankers’ acceptances, warehouse receipts purchase price or similar instruments issued obligations in any case incurred in connection with the acquisition or created in the ordinary course Disposition of any business, including in respect of workers compensation claims, health, disability assets 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 claimsSubsidiary;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(rn) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed in excess of the face stated amount of such Letter of Credit;
(so) Indebtedness incurred issued in lieu of cash payments of Restricted Payments permitted by a Restricted Subsidiary Section 7.6; provided that such Indebtedness is a non-Loan Party which, when aggregated with subordinated to the principal amount of all other Indebtedness incurred Obligations pursuant to this Section 7.03(s) and then outstanding for all an Subordinated Intercompany Note subject to similar terms as may be accepted by the Administrative Agent or on such Persons taken together, does not exceed other terms reasonably satisfactory to the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrenceAdministrative Agent;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(vp) Indebtedness of the Borrower or any Subsidiary Guarantor as an account party in respect of its Restricted Subsidiaries that is a Loan Party that complies with clauses trade letters of credit issued in the ordinary course of business;
(a), (cq) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited Indebtedness owing to any insurance company in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events the financing of Default under Sections 8.01(a) and (f) and any other Default or Event insurance premiums permitted by such insurance company in the ordinary course of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:business;
(i) if Guarantee Obligations made in the ordinary course of business; provided that such Guarantee Obligations are not of Indebtedness is secured on a pari passu for Borrowed Money, and (ii) Guarantee Obligations in right respect of security with Indebtedness of joint ventures to the Obligations, the aggregate principal amount extent such Guarantee Obligations are permitted as Investments by Section 7.7;
(s) Indebtedness or Disqualified Capital Stock of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 the Borrower or a Restricted Subsidiary incurred or issued to finance a Permitted Acquisition or (y) Persons that are acquired by the Borrower or any Restricted Subsidiary or merged into or consolidated with the Borrower or a Restricted Subsidiary in accordance with the terms hereof; provided that after giving effect to the extent incurred in connection with a Permitted Acquisition such acquisition or other Investment permitted hereundermerger, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis Borrower shall be in right of security compliance with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio Test (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) if and to the extent the Indebtedness being incurred as of such date of determination would be included in the definition of Consolidated Total Net Leverage (excluding for purposes of such calculation Indebtedness comprised of Capital Lease Obligations and purchase money Indebtedness that could otherwise have been incurred by the Loan Parties under Section 7.2(c) prior to such acquisition or merger);
(t) [Reserved];
(i) Indebtedness representing deferred compensation or stock-based compensation to employees of the Borrower or any Restricted Subsidiary incurred in the ordinary course of business and (ii) Indebtedness consisting of obligations of the Borrower or any Restricted Subsidiary under deferred compensation or other similar arrangements incurred in connection with a Permitted Acquisition or other any Investment permitted hereunder;
(v) Indebtedness issued by the Borrower or any Restricted Subsidiary to the officers, directors and employees of Holdings, any Parent Company, the greater Borrower or any Restricted Subsidiary, in lieu of (I) 4.25:1.00 and (II) or combined with cash payments to finance the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition purchase of Capital Stock of Holdings, any Parent Company or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) Borrower, in each case, to the extent incurred in connection with a Permitted Acquisition or other Investment such purchase is permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this by Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.097.6(e), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.;
(w) Any Permitted Refinancings Indebtedness in respect of Indebtedness incurred pursuant to Section 7.03(v)overdraft facilities, employee credit card programs, netting services, automatic clearinghouse arrangements and other cash management and similar arrangements in the ordinary course of business;
(x) all premiums premium (if any), interest (including post-petition interest), fees, expenses, charges charges, accretion or amortization of original issue discount, accretion of interest paid in kind and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w(w) above and clauses (y) through (bb) below;
(y) Permitted Subordinated Indebtedness (x) in an aggregate amount not to exceed $50,000,000 at any one time outstanding plus (y) an additional amount so long as, at the time of incurrence thereof, the Borrower shall be in compliance with the Consolidated Total Net Leverage Test;
(i) Indebtedness of the Borrower or any of its Restricted Subsidiaries undertaken in connection with cash management and related activities with respect to any Subsidiary or joint venture in the ordinary course of business and (ii) Indebtedness of the Borrower or any Restricted 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 in respect of intercompany self-insurance arrangements) of the Borrower and its Restricted Subsidiaries; and
(aa) Indebtedness in respect of (i) Permitted Other Indebtedness to the extent that the Net Cash Proceeds therefrom are applied to the prepayment of Term Loans in the manner set forth in Section 2.12(f); and (ii) any refinancing, refunding, renewal or extension of any Indebtedness specified in subclause (i) above; provided that (x) the principal amount of any such Indebtedness is not increased above the principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or extension (except for any original issue discount thereon and the amount of fees, expenses and premium in connection with such refinancing) and (y) such Indebtedness otherwise complies with the definition of “Permitted Other Indebtedness”;
(bb) Indebtedness in respect of (i) Permitted Other Indebtedness; provided that, at the Borrower’s election, either (a) the aggregate principal amount of all such Permitted Other Indebtedness issued or incurred pursuant to this clause (i)(a) shall not exceed the Maximum Incremental Facilities Amount if such Permitted Other Indebtedness is incurred under Section 2.25 or (b) if such Permitted Other Indebtedness is unsecured or secured by a Lien ranking junior to the Lien securing the Obligations, the Net Cash Proceeds thereof shall be applied no later than ten (10) Business Days after receipt thereof to repurchase, repay, redeem or otherwise defease Indebtedness permitted hereunder and (ii) any refinancing, refunding, renewal or extension of any Indebtedness specified in subclause (i) above; provided that (x) the principal amount of any such Indebtedness is not increased above the principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or extension (except for any original issue discount thereon and the amount of fees, expenses and premium in connection with such refinancing), (y) such Indebtedness otherwise complies with the definition of “Permitted Other Indebtedness,” and (z) in the case of a refinancing of Permitted Other Indebtedness incurred pursuant to clause (i)(b) above with other Permitted Other Indebtedness (“Refinancing Permitted Other Indebtedness”), such Refinancing Permitted Other Indebtedness, if secured, may only be secured by a Lien ranking junior to the Lien securing the Obligations;
(i) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.28 (and which does not generate any additional proceeds) and (ii) any refinancing, refunding, renewal or extension of any Indebtedness specified in subclause (i) above; provided that (x) the principal amount of any such Indebtedness is not increased above the principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or extension (except for any original issue discount thereon and the amount of fees, expenses and premium in connection with such refinancing) and (y) such Indebtedness otherwise complies with the definition of “Permitted Other Indebtedness”; and
(dd) Indebtedness not to exceed $17,500,000 incurred pursuant to a sale and leaseback arrangement permitted under Section 7.10. For purposes of determining compliance with this Section 7.2, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described above, the Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and may include the amount and type of such Indebtedness in one or more of the above clauses; provided, that, for the avoidance of doubt, Indebtedness reclassified under Section 7.2(t) must be unsecured.
Appears in 1 contract
Sources: First Lien Credit Agreement (Engility Holdings, Inc.)
Indebtedness. CreateThe Lux Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume issue, assume, guarantee or suffer to exist otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including Acquired Indebtedness) or issue any Indebtedness incurred pursuant shares of Disqualified Equity Interests, and the Lux Borrower will not permit any of its Restricted Subsidiaries to Section 2.14 or 2.15);
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and issue any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofshares of Preferred Stock; provided however, that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Lux Borrower and any Restricted Subsidiary in respect may incur Indebtedness (including Acquired Indebtedness) or issue shares of Indebtedness of the Borrower or Disqualified Equity Interests and any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary may issue shares of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Preferred Stock, in each case determined at if the time Fixed Charge Coverage Ratio for the Lux Borrower and its Restricted Subsidiaries’ calculated as of incurrence the date on which such additional Indebtedness is Incurred or such Disqualified Equity Interest or Preferred Stock is issued would have been 2.00 to 1.00 or greater (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof“Ratio Debt”); provided further, that any such Guarantees the aggregate amount of Indebtedness (including Acquired Indebtedness) that may be incurred and Disqualified Equity Interest or Preferred Stock that may be issued pursuant to the foregoing by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection together with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 that may be incurred or assumed and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption Disqualified Equity Interest or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of Preferred Stock that may be issued pursuant to clause (ii), (Ao) such Indebtedness does not mature prior to of the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity second paragraph of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under this Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted 7.01 by Subsidiaries that are non-not Loan Parties incurred pursuant to this Section 7.03(gParties) shall not exceed the greater of (x) $9,750,000 250.0 million and (y) 1517.0% of Consolidated EBITDA of the Borrower determined Net Tangible Assets, at the any one time of such incurrence outstanding on a Pro Forma BasisBasis (including pro forma application of the proceeds therefrom). The foregoing limitations will not apply to (collectively, “Permitted Debt”):
(a) (x) Indebtedness arising under the Loan Documents including any refinancing thereof in accordance with Section 2.18, (y) Indebtedness of the Loan Parties evidenced by Refinancing Notes and any Permitted Refinancing thereof (or successive Permitted Refinancings thereof) and (z) Indebtedness of the Loan Parties evidenced by Incremental Equivalent Debt and any Permitted Refinancing thereof (or successive Permitted Refinancings thereof);
(hb) the Incurrence by the Borrowers and the Guarantors of Indebtedness represented by the Senior Notes and the Guarantees thereof, as applicable;
(c) Indebtedness representing deferred compensation to employees of Holdings the Lux Borrower and its Restricted Subsidiaries existing on the Closing Date (other than Indebtedness described in clause (a) or (b) above) and listed on Schedule 7.01;
(d) Indebtedness (including, without limitation, Capitalized Lease Obligations and mortgage financings as purchase money obligations) incurred by the Lux Borrower or any of its Restricted Subsidiaries, Disqualified Equity Interest issued by the Lux Borrower or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Equity Interests of any Person owning such assets) and Indebtedness arising from the conversion of the obligations of the Lux Borrower or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of the Lux Borrower or such Restricted Subsidiary, in an aggregate principal amount or liquidation preference, including all Indebtedness incurred and Disqualified Equity Interest or Preferred Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred or Disqualified Equity Interest or Preferred Stock issued pursuant to this clause (d), not to exceed the greater of (x) $150.0 million and (y) 10.5% of Consolidated Net Tangible Assets, at any one time outstanding, plus, in the case of any refinancing of any Indebtedness permitted under this clause (d) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection with such refinancing (it being understood that any Indebtedness, Disqualified Equity Interest or Preferred Stock incurred pursuant to this clause (d) shall cease to be deemed incurred or outstanding pursuant to this clause (d) but shall be deemed incurred and outstanding as Ratio Debt from and after the ordinary course first date on which the Lux Borrower or such Restricted Subsidiary, as the case may be, could have incurred such Indebtedness, Disqualified Equity Interest or Preferred Stock (including any Liens related thereto) as Ratio Debt); provided that Capitalized Lease Obligations incurred by the Lux Borrower or any Restricted Subsidiary pursuant to this clause (d) in connection with a sale-leaseback shall not be subject to the foregoing limitation so long as the proceeds of businesssuch sale-leaseback are used by the Lux Co-Issuer or such Restricted Subsidiary to permanently repay outstanding Term Loans under this Agreement or other Pari Passu Indebtedness that is secured by pari passu Liens on the Collateral;
(ie) Indebtedness consisting of promissory notes issued incurred by Holdings the Lux Borrower or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to current letters of credit or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft guarantees or similar instrument drawn against insufficient funds instruments issued in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time ofincluding, and after giving effect towithout limitation, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (i) the financing letters of insurance premiums credit or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower performance or any of its Restricted Subsidiaries surety bonds in respect of letters of credit, bank guarantees, bankersworkers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(pf) Indebtedness arising from agreements of the Lux Borrower or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price or similar obligations, in each case, Incurred in connection with the Transactions or with the acquisition or disposition of any business, assets or a Subsidiary of the Lux Borrower in accordance with this Agreement, 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 such acquisition;
(g) Indebtedness of the Lux Borrower to a Restricted Subsidiary; provided that (x) such Indebtedness owing to a Non-Loan Party shall be subordinated in right of payment to the Borrowers’ Obligations with respect to this Agreement pursuant to the Intercompany Subordination Agreement and (y) any subsequent issuance or transfer of any Equity Interests or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Lux Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (g);
(h) shares of Preferred Stock of a Restricted Subsidiary issued to the Lux Borrower or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Equity Interests or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Lux Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (h);
(i) Indebtedness of a Restricted Subsidiary or the Lux Borrower owing to Holdings, the Lux Borrower or another Restricted Subsidiary; provided that (x) if a Borrower or a Loan Party incurs such Indebtedness owing to a Non-Loan Party, such Indebtedness is subordinated in right of payment to the Borrower’s Obligations or Guarantee of such Loan Party, as applicable, pursuant to the Intercompany Subordination Agreement and (y) any subsequent issuance or transfer of any Equity Interests or any other event that results in any Restricted Subsidiary lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Lux Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (i);
(j) Swap Contracts incurred not for speculative purposes;
(k) obligations (including reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments) in respect of self-insurance, performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Lux Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practiceSubsidiary;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Sources: Amendment (Ortho Clinical Diagnostics Holdings PLC)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note (or subject to subordination terms substantially consistent with the terms of the Intercompany Note);
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined in reasonable good faith by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party of any Permitted Ratio Debt, Incremental Equivalent Debt or Indebtedness under Sections 7.03(g) and (m) (or any Permitted Refinancing in respect thereof) shall only be permitted to if such Guarantee meets the extent constituting an Investment permitted by requirements of clauses (g), (m) or (s) (only in respect of the proviso in the definition of Permitted Ratio Debt) of this Section 7.02(c)(iii)7.03, as applicable;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party (other than Holdings) or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party (other than Holdings) or any Restricted Subsidiary of a Loan PartySubsidiary) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note (or subject to subordination terms substantially consistent with the terms of the Intercompany Note);
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, development, renovation, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 365 days after the acquisition, construction, repair, replacement, development, renovation, lease or improvements improvement of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence thereof (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness; provided, that any such Indebtedness incurred pursuant to this Section 7.03(e) (together with any Permitted Refinancings thereof) does not exceed in the aggregate amount at any time outstanding of the greater of (A) $75,000,000 and (B) 4.0% of Total Assets, in each case determined at the time of incurrence;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary (i) assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; (provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment Acquisition) or any Permitted Refinancing thereof or (ii) incurred to finance any Permitted Acquisition or any Permitted Refinancing thereof; provided, that after giving Pro Forma Effect pro forma effect to such Permitted Acquisition and the assumption or incurrence of such Indebtedness, as applicable, (x) no Default or Event of Default shall exist or result therefrom and (y) the aggregate amount of such Indebtedness at any time outstanding does assumed or incurred pursuant to this clause (g) shall not exceed the sum of (x) the greater of (A) $16,250,000 75,000,000 and 25(B) 4.0% of Consolidated EBITDA Total Assets at any time plus (determined y) an unlimited additional amount so long as the Interest Coverage Ratio (calculated on a Pro Forma Basis in accordance with Section 1.091.08) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is would not greater be less than 4.25:1:002.00:1.00; provided, in each case determined at the time of such assumption or incurrencefurther, on a Pro Forma Basis in accordance with Section 1.09; provided that, that in the case of clause (ii), (A) such Indebtedness, if secured, must be permitted by, and be taken into account in computing compliance with, any basket amounts or limitations applicable to such secured Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basishereunder;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower or any of its Restricted Subsidiaries Subsidiary incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06[Reserved];
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries Subsidiary in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with a Permitted Acquisitions Acquisition or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 ten Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of (x) $22,750,000 75,000,000 and 35(y) 4.0% of Consolidated EBITDATotal Assets; provided that the aggregate principal amount of Indebtedness outstanding in reliance on this Section 7.03(m) which can be secured shall not exceed the greater of (x) $50,000,000 and (y) 3.0% of Total Assets in the aggregate at any time outstanding, in each case determined at the time of incurrence;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries Subsidiary in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claimsclaims or in respect of awards or judgments not resulting in an Event of Default;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000Incremental Equivalent Debt;
(r) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness supported of any Person that is not a Restricted Subsidiary, to the extent constituting an Investment permitted by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of CreditSection 7.02 (other than Section 7.02(e));
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) Permitted Ratio Debt and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrenceany Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) any Indebtedness incurred arising under guarantees entered into pursuant to Section 2:403 of the Dutch Civil Code in reliance on respect of any group company (groepsmaatschappij) as described in Section 2:24b of the Cumulative CreditDutch Civil Code and any residual liability with respect to such guarantees arising under Section 2:404 of the Dutch Civil Code;
(v) Indebtedness of represented by the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited Senior Notes in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the an aggregate principal amount not to exceed $360,000,000 less any repayments, redemptions or repurchases of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio Senior Notes (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more other than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09Refinancing), in each case determined at and Guarantees thereof by the time of incurrence Subsidiary Guarantors and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.Permitted Refinancing thereof;
(w) Any Permitted Refinancings any joint and several liability arising as a result of Indebtedness incurred pursuant to Section 7.03(v);(the establishment) of a fiscal unity (fiscale eenheid) between the Borrower and any Restricted Subsidiaries incorporated in the Netherlands or its equivalent in any other relevant jurisdiction; and
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);. Notwithstanding the foregoing, any Indebtedness or other liabilities of a Designated Guarantor with respect to the (i) Senior Notes Debt Documents, (ii) Incremental Equivalent Debt, (iii) Permitted Ratio Debt, (iv) Credit Agreement Refinancing Indebtedness and Indebtedness incurred pursuant to Section 2.14 which, in each case, is unsecured or secured on a junior priority basis to the Liens securing the Obligations and (v) any Permitted Refinancing of any of the foregoing, shall be subordinated in right of payment to the Obligations on terms substantially similar to the Senior Notes Debt Documents (in the case of unsecured indebtedness) or otherwise reasonably satisfactory to the Administrative Agent. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 7.03. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in Sections 7.03(a) through 7.03(x), the Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that (x) all Indebtedness outstanding under (w) the Loan Documents will at all times be deemed to be outstanding in reliance only on the exception in Section 7.03(a), (x) Credit Agreement Refinancing Indebtedness will at all times be deemed to be outstanding in reliance only on the exception in Section 7.03(t) and (y) the Senior Notes and any Permitted Refinancing in respect thereof will at all times be deemed to be outstanding in reliance only on the exception in Section 7.03(v).
Appears in 1 contract
Sources: Restatement Agreement (Playa Hotels & Resorts N.V.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any the Loan Party Parties under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth hereinin the Guaranty, (B) if the Indebtedness being Guaranteed is subordinated to the ObligationsObligations in Lien priority and/or right of payment, such Guarantee shall be subordinated to the Guarantee of the Obligations in Lien priority and/or right of payment, as the case may be, on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and/or Lien securing the same and (C) any Guarantee by a any Loan Party of Indebtedness of a any Restricted Subsidiary that is not a Loan Party an Immaterial Subsidiary shall only be permitted to the extent constituting an Investment expressly permitted by Section 7.02(c)(iii7.02 (other than clause (e) thereof);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment expressly permitted by Section 7.02(c)(iii)7.02; provided that that, (xi) no all such Indebtedness owed to a Loan Party shall be evidenced by an Intercompany Note and, in the case of an Intercompany Note issued to a promissory note unless such promissory note is Guarantor, pledged to the Administrative Agent for the benefit of the Secured Parties in accordance with the terms of the Security Agreement Collateral Documents and Section 6.11 and (yii) all such Indebtedness of any Loan Party Guarantor owed to any Restricted Subsidiary Person that is not a Loan Party Guarantor shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms of set forth in the Intercompany Note;
(e) (i) Attributable so long as immediately after giving effect to the incurrence of any such Indebtedness, no Event of Default has occurred and is continuing and the Borrower and the Restricted Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.11, Capitalized Lease Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisitionthe acquisition of furniture, constructionfixtures and equipment (including gaming equipment), repairsoftware, replacement, lease or improvement and associated warranties and/or service contracts (all of which shall be of a fixed type that is readily removable from and not integral to the structure of any Real Property or capital asset improvements thereon); provided that such Indebtedness is incurred by the Borrower or any Restricted Subsidiary prior to concurrently with or within 270 two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtednessany Indebtedness set forth in the immediately preceding clause (i); provided further that the aggregate principal amount of all Indebtedness permitted under this Section 7.03(e) (including all Permitted Refinancing Indebtedness described in preceding clause (ii)), shall not exceed $75,000,000 at any time outstanding;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks of the Borrower or its Restricted Subsidiaries incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its the Borrower and the Restricted Subsidiaries incurred in the ordinary course of business;
(ih) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries the Borrower to current or former officers, managersdirectors, consultants, directors managers and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Opco Holdings or (so long as GVR is a co-borrower hereunder) GVR Holdings (or any direct or indirect parent of Holdings company thereof) permitted by Section 7.067.06(d); provided that (i) such Indebtedness shall be subordinated in right of payment to the Obligations on terms reasonably satisfactory to the Administrative Agent (it being understood that, subject to the dollar limitation described below, such subordination provisions shall permit the payment of interest and principal in cash if no Event of Default has occurred and is continuing) and (ii) the aggregate amount of all cash payments (whether principal or interest) made by the Borrower in respect of such notes since the Closing Date, when combined with the aggregate amount of Restricted Payments made pursuant to Section 7.06(d) since the Closing Date, shall not exceed $1,000,000;
(ji) Indebtedness incurred by Holdings the Borrower or any of its the Restricted Subsidiaries in (i) a Permitted Acquisition, (ii) any other Investment expressly permitted hereunder, merger hereunder or (iii) any Disposition permitted hereunderDisposition, in the case of each caseof the foregoing clauses (i), (ii) and (iii), constituting customary indemnification obligations or customary obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kj) Indebtedness consisting of obligations of Holdings the Borrower or any of its the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment expressly permitted hereunder;
(li) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in each case in connection with deposit accounts and (ii) Indebtedness of the ordinary course of business Borrower and any Guarantees thereof or its Restricted Subsidiaries arising under 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, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence▇▇▇▇▇ Fargo Indemnification Agreement;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(nl) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(om) Indebtedness incurred by the Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including business in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(pn) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qo) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) additional unsecured Indebtedness of the Borrower or any of and its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as as, after giving effect thereto, no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) has occurred and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from and the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu Borrower shall be in right of security compliance with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (7.11 determined on a Pro Forma Basis, based on the financial information most recently delivered to the Administrative Agent and the Lenders under Sections 6.01(a) is no more than (x) 4.00:1.00 or (yb) to as though the extent incurred incurrence of such Indebtedness had occurred on the first day of the four-quarter fiscal period covered thereby and remained outstanding through the end of such four-quarter fiscal period and evidenced by a certificate of a Responsible Officer of the Borrower demonstrating such compliance calculation in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrencereasonable detail;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(xp) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest (other than pay-in-kind interest or other interest capitalized as principal) on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(o) above; and
(q) Guarantees consisting of Support Agreements of the Borrower and its Restricted Subsidiaries in an aggregate amount not exceeding $50,000,000 at any time.
Appears in 1 contract
Indebtedness. CreateThe Loan Parties shall not, and shall not permit any of their respective Subsidiaries to, incur, assume or assume, suffer to exist or otherwise become obligated in respect of any Indebtedness, except:
(ai) Indebtedness under the Loan Documents;
(ii) Secured Indebtedness of the Borrower and its Subsidiaries in an aggregate principal amount not to exceed 45.0% of Gross Asset Value at any time outstanding; provided, that the aggregate principal amount of such Secured Indebtedness constituting Secured Recourse Indebtedness shall not exceed 15.0% of Gross Asset Value at any time outstanding; and provided further, that (x) with respect to any underlying Secured Recourse Indebtedness for any given Real Estate Asset, the aggregate original principal amount of such Secured Recourse Indebtedness shall be less than 75% of the Appraised Value of such Real Estate Asset at the time such Secured Recourse Indebtedness is incurred and (y) such Secured Indebtedness shall not be in the nature of a revolving credit facility;
(iii) Indebtedness of Borrower to any of its Subsidiaries and of any such Subsidiary to any other Subsidiary; provided, that (A) such Indebtedness shall be subject to the limitations on Investments set forth in Section 10.5 and (B) any such Indebtedness of any Loan Party under to a non-Loan Party shall be subordinated to the Loan Documents (including any Indebtedness incurred pursuant Obligations on terms reasonably satisfactory to Section 2.14 or 2.15)the Administrative Agent;
(biv) Guarantees by the Borrower, any Subsidiary Guarantor or any Wholly-Owned Subsidiary of Indebtedness of the Borrower, any Subsidiary Guarantor or any other Wholly-Owned Subsidiary of the Borrower; provided, that, in each case, (x) the Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof so Guaranteed is permitted by this Section 10.3, and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party Guarantees permitted under this clause (iv) shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the same terms set forth herein, (B) if as the Indebtedness being so Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(dv) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent its Subsidiaries constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other purchase money Indebtedness (including Capitalized Leases) financing an acquisitionCapital Lease Obligations); provided, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature is incurred prior to or within 90 days after the date that is acquisition of the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, assets financed thereby and (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to permitted by this Section 7.03(gclause (v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined 5,000,000 at the any time of such incurrence on a Pro Forma Basisoutstanding;
(hvi) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankersowed to any Person providing workers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claimscompensation, health, disability or other employee benefits or property, casualty or liability insurance insurance, pursuant to reimbursement or self-insurance or other Indebtedness with respect indemnification obligations to reimbursement-type obligations regarding workers compensation claimssuch Person, in each case incurred in the ordinary course of business;
(pvii) obligations in respect Indebtedness of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of creditperformance bonds, bank guarantees or bid bonds, appeal bonds, surety bonds and similar instruments related theretoobligations, in each case provided in the ordinary course of business or consistent with past practicebusiness;
(qviii) letters obligations of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is under Derivatives Contracts permitted under Section 10.13;
(ix) Unsecured Indebtedness of the Borrower consisting of investment grade or high-yield senior unsecured notes issued in a Loan Party that complies with clauses public offering or private placement or other unsecured term loan facility (abut excluding any other revolving credit facility) (any such issuance, a “Senior Unsecured Debt Issuance”), provided that (ci) any such Unsecured Indebtedness shall be at market rates and subject to market terms, (dii) (as applicable) of the Applicable Requirementsboth before and immediately after giving effect to any Senior Unsecured Debt Issuance, so long as no Default or Event of Default exists, and (limited iii) immediately prior to such Senior Unsecured Debt Issuance, the Administrative Agent shall have received a pro forma Compliance Certificate from the Borrower as of the date of, and after giving effect to, such Senior Unsecured Debt Issuance evidencing compliance with the financial covenants set forth in Section 10.1 (in each case using consolidated Indebtedness of NSA REIT and its Subsidiaries as of the date of, and after giving effect to, such Senior Unsecured Debt Issuance and the repayment of any Indebtedness in connection therewith, and Gross Asset Value as at the end of the most recent Reference Period); and
(x) (i) subject to compliance with Section 8.12 (including any concurrent provision of the Guaranty required to be delivered to the Administrative Agent pursuant to Section 8.12), unsecured Parent Guarantees by NSA REIT of Indebtedness incurred otherwise permitted under this Section 10.3 so long as, both before and immediately after giving effect to finance a Limited Condition Transactionany such Parent Guaranty, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other no Default or Event of Default that exists and the Borrower is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security compliance with the Obligations, the aggregate principal amount financial covenants set forth in Section 10.1 (in each case using consolidated Indebtedness of such Indebtedness shall not exceed an amount so long as on NSA REIT and its Subsidiaries as of the date of of, and after giving effect to, such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis Parent Guaranty, and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment Gross Asset Value as at the time end of incurrence;
the most recent Reference Period) and (ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount Existing Non-Recourse Guaranty so long as on and as the loan obligations relating thereto do not exceed $2,212,500.”
8. Amendment to Section 10.5 (Investments) of the date of such incurrence the Consolidated Secured Net Leverage Ratio Credit Agreement. Clause (determined on a Pro Forma Basisb) is no more than (x) 4.00:1.00 or (y) to the extent incurred contained in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as Section 10.5 of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) Credit Agreement is no more than (1) 4.25:1.00 or (2) amended to the extent incurred read in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the its entirety as follows: “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Sources: Credit Agreement (National Storage Affiliates Trust)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) the Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness of any Loan Party under the Loan Documents (including Acquired Indebtedness) or issue any Indebtedness incurred pursuant shares of Disqualified Stock and the Borrower will not permit any of its Restricted Subsidiaries to Section 2.14 or 2.15);
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and issue any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofshares of Preferred Stock; provided provided, however, that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Indebtedness of the Borrower or Disqualified Stock and any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary may issue shares of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Borrower and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing beginning of such Attributable four-quarter period; provided, further, that the aggregate amount of Indebtedness (including Acquired Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed that may be Incurred and Disqualified Stock or Preferred Stock that may be issued pursuant to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees foregoing by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness Guarantors of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) Loans shall not exceed the greater of (x) $9,750,000 100,000,000125,000,000 and (y) 155.0% of Consolidated EBITDA of the Borrower determined Total Assets at the time of Incurrence, at any one time outstanding.
(b) In addition, the following shall be permitted:
(1) the Incurrence by the Borrower or its Restricted Subsidiaries of (i) the Obligations under this Agreement and the Collateral Documents and (ii) the ABL Credit Agreement and Guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate amount not to exceed at any one time outstanding, the greater of (x) $300,000,000310,000,000 and (y) the Borrowing Base as of the date of such incurrence on a Pro Forma BasisIncurrence;
(h2) [Reserved];Indebtedness Incurred by the Borrower and the Guarantors on the Amendment No. 1 Effective Date in respect of the Senior Notes and the guarantees with respect thereto;
(3) Indebtedness representing deferred compensation to employees of Holdings existing on the ClosingAmendment No. 1 Effective Date and listed on Schedule 7.03;
(4) Indebtedness (including, without limitation, Capitalized Lease Obligations and mortgage financings as purchase money obligations), Incurred by the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes Subsidiaries, Disqualified Stock issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Borrower to finance all or any part of the purchase, lease, construction, installation, replacement, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets used or useful in the business of the Borrower or its Restricted Subsidiaries or in a Similar Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (4), not to exceed at any one time outstanding the greater of (x) $75,000,00095,000,000 and (y) 3.75% of Consolidated Total Assets at the time of Incurrence;
(5) Indebtedness Incurred by the Borrower or any of its Restricted Subsidiaries constituting reimbursement obligations with respect of to letters of credit, bank guarantees, bankers’ acceptances, bank guarantees, warehouse receipts or similar instruments issued facilities entered into, or created relating to obligations or liabilities incurred, in the ordinary course of business, including without limitation letters of credit in respect of workers workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance insurance; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Borrower or any of its Restricted Subsidiaries related to indemnification, adjustment of purchase price, earn out or similar obligations, in each case, Incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary of the Borrower not exceeding the proceeds of such disposition, 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;
(7) Indebtedness of the Borrower to a Restricted Subsidiary; provided that (x) such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business (and not in connection with the borrowing of money), is expressly subordinated in right of payment to the Obligations and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Borrower or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (7);
(8) shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Borrower or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock or Disqualified Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (8);
(9) Indebtedness of a Restricted Subsidiary to the Borrower or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business (and not in connection with the borrowing of money), such Indebtedness is unsecured and subordinated in right of payment to the Guaranty of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Borrower or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (9);
(10) Hedging Obligations that are Incurred in the ordinary course of business (and not for speculative purposes);
(11) obligations (including reimbursement obligations with respect to reimbursement-type obligations regarding workers compensation claims;
(pletters of credit and bank guarantees) obligations in respect of performance, bid, appeal and surety bonds and performance bonds, bankers’ acceptance facilities and completion guarantees, customs, VAT or other tax guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practicebusiness;
(qa) letters Indebtedness or Disqualified Stock of credit issued in currencies not available hereunder the Borrower or any Restricted Subsidiary of the Borrower and Preferred Stock of any Restricted Subsidiary of the Borrower in an aggregate principal amount at or liquidation preference up to 100.0% of the net cash proceeds received by the Borrower since immediately after the Closing Date from the issue or sale of Equity Interests of the Borrower or cash contributed to the capital of the Borrower or any time outstanding Parent Entity (to the extent the net cash proceeds are contributed to the Borrower) (in each case, other than Excluded Contributions, Contribution Indebtedness or proceeds of Disqualified Stock or proceeds of Designated Preferred Stock or sales of Equity Interests to the Borrower or any of its Subsidiaries) as determined in accordance with Section 7.06(a)(4)(iii)(B) and (C) to the extent such net cash proceeds or cash have not been applied pursuant to exceed $5,000,000;
such clauses to make Restricted Payments or to make Investments, payments or exchanges pursuant to Section 7.06(b) or to make Permitted Investments (rother than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) and (b) Indebtedness supported by a Letter or Disqualified Stock of Credit, the Borrower or any Restricted Subsidiary of the Borrower and Preferred Stock of any Restricted Subsidiary of the Borrower in a an aggregate principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party whichor liquidation preference that, when aggregated with the principal amount or liquidation preference of all other Indebtedness Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (12)(b), does not exceed at any one time outstanding the greater of (x) $125.0 million155,000,000 and (y) 6.0% of Consolidated Total Assets at the time of any incurrence pursuant to this clause 12(b) (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this Section 7.03(sclause (12)(b) and then shall cease to be deemed incurred or outstanding for all purposes of this clause (12)(b) but shall be deemed incurred pursuant to the first paragraph of this covenant from and after the first date on which the Borrower or such Persons taken togetherRestricted Subsidiary could have incurred such Indebtedness, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Disqualified Stock or Preferred Stock under Section 1.097.03(a), in each case determined at the time of incurrence);
(t13) Credit Agreement Refinancing Indebtedness;
(u) any Guarantee by the Borrower or a Restricted Subsidiary of Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness or other obligations of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount Incurrence of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment obligations by the Borrower or such Restricted Subsidiary is permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not by its express terms subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu Obligations, any such Guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of security payment to such Guarantor’s Guaranty hereunder substantially to the same extent as such Indebtedness is subordinated to the Obligations;
(14) the Incurrence or issuance by the Borrower or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Borrower that serves to Refinance any Indebtedness, Disqualified Stock or Preferred Stock Incurred as permitted under Section 7.03(a) and 7.03(b)(2), 7.03(b)(3), (12)(a), this clause (14), (15), (18) and (20), or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so Refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay accrued and unpaid interest and dividends and premiums (including reasonable tender premiums), defeasance costs and fees and expenses in connection with the Term Loans, the Term Loans shall be such Refinancing (subject to the following proviso, “most favored nation” pricing adjustment Refinancing Indebtedness”) on or prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(if applicablei) set forth in has a Weighted Average Life to Maturity at the proviso time such Refinancing Indebtedness is Incurred that is not less than the remaining Weighted Average Life to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes Maturity of the calculations in this Section 7.03(v)Indebtedness, Disqualified Stock or Preferred Stock being Refinanced;
(Aii) with respect to any Revolving Credit Commitments, has a borrowing Stated Maturity which is no earlier than the Stated Maturity of the maximum amount of Loans available thereunder shall be assumed and Indebtedness being Refinanced;
(Biii) to the extent the proceeds of any such Refinancing Indebtedness incurred under this Section 7.03(v) are used to repay Refinances Junior Indebtedness, Pro Forma Effect shall be given such Refinancing Indebtedness is Junior Indebtedness and to the extent such repayment of Refinancing Indebtedness Refinances unsecured Indebtedness., such Refinancing Indebtedness is unsecured Indebtedness; and
(wiv) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
shall not include (x) all premiums Indebtedness, Disqualified Stock or Preferred Stock of the Borrower or a Guarantor that Refinances Indebtedness of a Restricted Subsidiary of the Borrower that is not a Guarantor or (if any)y) Indebtedness, interest (including post-petition interest), fees, expenses, charges and additional Disqualified Stock or contingent interest on obligations described in Sections 7.03(a) through 7.03(w)Preferred Stock of the Borrower or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary;
Appears in 1 contract
Indebtedness. CreateNo Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer guaranty, or otherwise become or remain directly or indirectly liable with respect to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Obligations;
(b) intercompany Indebtedness (xi) owed by any Credit Party to another Credit Party; (ii) owed by any Credit Party to any Subsidiary that is not a Guarantor Subsidiary (provided that such Indebtedness shall be subordinated to the Obligations in a manner reasonably satisfactory to the Administrative Agent); (iii) owed by any Subsidiary that is not a Guarantor Subsidiary to any other Subsidiary that is not a Guarantor Subsidiary; and (iv) owed by any Subsidiary that is not a Guarantor Subsidiary to any Credit Party to the extent permitted pursuant to Section 6.6(c);
(c) Indebtedness outstanding which, when aggregated with Indebtedness of the Borrower and its Consolidated Subsidiaries and Non-Consolidated Real Estate Entities (but, in the case of Non-Consolidated Real Estate Entities, only to the extent allocable to the Borrower or its Wholly Owned Subsidiaries), would not cause the Borrower to fail to be in pro forma compliance with the financial covenants set forth in Section 6.7(a), Section 6.7(b) and Section 6.7(c) together with Permitted Refinancings thereof; provided that the maximum aggregate amount of secured Recourse Indebtedness that is incurred pursuant to this Section 6.1(c) by the Borrower and its Subsidiaries shall not exceed 15% of Total Asset Value at any time outstanding.
(d) [Intentionally Omitted];
(e) guaranties by the Borrower of Indebtedness of a Guarantor Subsidiary or guaranties by a Guarantor Subsidiary of Indebtedness of the Borrower or another Guarantor Subsidiary, in each case, with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.1; provided, that if the Indebtedness that is being guarantied is unsecured and/or subordinated to the Obligations, the guaranty shall also be unsecured and/or subordinated to the Obligations;
(f) (i) Indebtedness existing on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof 6.1 and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing Refinancings thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(cg) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(di) Indebtedness of the Borrower or any Restricted Subsidiary owing its Subsidiaries with respect to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but onlyCapital Leases, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) purchase money Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) its Subsidiaries and (Ciii) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma BasisPermitted Refinancings thereof;
(h) Indebtedness representing deferred compensation to employees consisting of Holdings or any financing of its Restricted Subsidiaries incurred insurance premiums in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06[Intentionally Omitted];
(j) cash management obligations and other Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price endorsements for collection or deposit, netting services, overdraft protections and similar arrangements in each case in connection with deposit accounts; provided that such Indebtedness is extinguished within ten (including earn-outs10) or other similar adjustmentsBusiness Days after its incurrence;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in utility supply arrangementsarrangements and (ii) customary indemnification obligations, in each case, incurred in the ordinary course of business and not in connection with debt for money borrowed;
(l) letters of credit, bank guaranties or similar instruments in support of obligations in respect of workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money or Capital Leases); 89 Credit and Guaranty Agreement
(m) Indebtedness arising from agreements of the Borrower or any of its Subsidiaries providing for indemnification, adjustment of purchase or acquisition price, earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets (including Equity Interests) of the Borrower or any of its Subsidiaries not prohibited by Section 6.6 or Section 6.8;
(n) Indebtedness incurred by the Borrower or any of its Subsidiaries representing deferred compensation to directors, officers, employees, members of management and consultants of such Person in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptancesacceptances supporting trade payables, warehouse receipts or similar instruments issued or created facilities entered into in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations Indebtedness incurred in respect lieu of performance, bid, appeal (and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or not in an amount in excess of) any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practiceJunior Payment permitted pursuant to Section 6.4;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000[Intentionally Omitted];
(r) Indebtedness supported by a Letter of Creditto the extent constituting Indebtedness, Investments in a principal amount not to exceed the face amount of such Letter of Credit;repurchase agreements constituting Cash Equivalents; and
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay constituting Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations Indebtedness described in Sections 7.03(aclauses (a) through 7.03(w);(r) above.
Appears in 1 contract
Sources: Credit and Guaranty Agreement (Northstar Realty Finance Corp.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Permitted Subordinated Indebtedness;
(b) Indebtedness of the Loan Parties under the Loan Documents;
(xc) (i) Indebtedness outstanding on the Closing Effective Date and listed on Schedule 7.03(b) 7.03 and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on in respect of the Closing Date Senior Notes and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(cd) Guarantees by the Borrower and any a Restricted Subsidiary Company in respect of Indebtedness of the Borrower or any another Restricted Subsidiary Company otherwise permitted hereunder; provided that (Ax) no Guarantee by any Restricted Subsidiary of any Senior Note or any Permitted Subordinated Indebtedness constituting a junior lien financing (or Specified Junior Financing Obligation any Permitted Refinancing thereof) shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Subsidiary Guarantee in accordance with Section 6.12 and (By) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness;
(Ce) any Guarantee by a Loan Party of Indebtedness of a Restricted Company that constitutes an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party shall only must be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and expressly subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable IndebtednessLoan Party, it being understood that such Loan Party may make payments thereon unless an Event of Default has occurred and is continuing;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided by the Like-Kind-Exchange Companies in connection with “1031 exchange” transactions under Section 1031 of the Code (or regulations promulgated thereunder, including Revenue Procedure 2000-37) that any such Guarantees by Loan Parties is limited in recourse to the properties (real or personal) which are the subject of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to “1031 exchange” transactions (collectively, the extent constituting an Investment permitted by Section 7.02(c)(iii“Specified Non-Recourse Indebtedness”);
(g) subject to the Specified Debt Test, Indebtedness of Foreign Restricted Subsidiaries of the Borrower or any Borrower;
(h) subject to the Specified Debt Test, Indebtedness of a Restricted Subsidiary Company assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is and not incurred in contemplation of such Permitted Acquisition or other Investment or thereof, and any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basisthereof;
(hi) Indebtedness incurred by any Restricted Company representing deferred compensation to employees of Holdings or any of its a Restricted Subsidiaries Company incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings any Restricted Company to future, present or former directors, officers, members of management, employees or consultants of the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, heirs, family members, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings the Borrower permitted by Section 7.067.06(c);
(jk) Indebtedness incurred by Holdings or any of its a Restricted Subsidiaries Company in a Permitted Acquisition, any other Investment permitted hereunder, merger Acquisition or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries Company under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceAcquisitions;
(m) Indebtedness (including intercompany Indebtedness among the Restricted Companies) in an aggregate principal amount that at respect of the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDACash Management Practices;
(n) Indebtedness consisting of (i) the financing of insurance premiums (or other obligations referred to in Section 7.01(e)) or (ii) take-or-pay obligations of a Restricted Company contained in supply arrangements, in each case, in the ordinary course of businessbusiness (including, in each case, reimbursement and related obligations with respect to letters of credit issued in connection with any of the foregoing);
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of bid, performance, bidstay, customs, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower a Restricted Company (or any of its Restricted Subsidiaries other obligations referred to in Section 7.01(f) or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto(k)), in each case in the ordinary course of business or consistent with past practicepractice (including, in each case, reimbursement and related obligations with respect to letters of credit issued in connection with any of the foregoing);
(p) Guarantees by the Borrower of Indebtedness permitted under this Section 7.03;
(q) letters Indebtedness in respect of credit issued Swap Contracts entered into in currencies the ordinary course of business and not available hereunder for speculative purposes;
(r) Indebtedness incurred in connection with a receivables securitization transaction involving the Restricted Companies and a Securitization Vehicle (a “Securitization Financing”); provided that (i) the Net Cash Proceeds of such Indebtedness are applied to prepay the Term Loans pursuant to Section 2.05(b), (ii) such Indebtedness when incurred shall not exceed 100% of the cost or fair market value, whichever is lower, of the property being acquired on the date of acquisition, (iii) such Indebtedness is created and any Lien attaches to such property concurrently with or within forty-five (45) days of the acquisition thereof, and (iv) such Lien does not at any time encumber any property other than the property financed by such Indebtedness;
(i) Attributable Indebtedness and purchase money obligations (including obligations in respect of mortgage, industrial revenue bond, industrial development bond and similar financings), in each case of the Borrower or a Restricted Subsidiary to finance the purchase, repair or improvement of fixed or capital assets within the limitations set forth in Section 7.01(p) and any Permitted Refinancing thereof, provided that the aggregate principal amount of all such Indebtedness under this clause (i) shall not exceed $50,000,000 at any time outstanding and (ii) Indebtedness secured by Liens permitted under Sections 7.01(e)(ii), 7.01(f) or 7.01(r);
(t) subject to the Specified Debt Test, other Indebtedness of Restricted Subsidiaries in an aggregate principal amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 350,000,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing IndebtednessShareholders’ Equity;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) other unsecured Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of not permitted by the Applicable Requirementsforegoing clauses, so long as (i) no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) has occurred and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from therefrom and (ii) immediately after giving effect to the incurrence of such unsecured Indebtedness, the Borrower shall be in Pro Forma Compliance with Section 7.09(a); provided that:and
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(xv) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w)(v) above;
Appears in 1 contract
Sources: Credit Agreement (Lender Processing Services, Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower Parent and any Restricted Subsidiary in respect of Indebtedness of the Borrower Parent or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the BorrowerParent) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party of any Permitted Ratio Debt or Indebtedness under Section 7.03(g) or (m) (or any Permitted Refinancing in respect thereof) shall only be permitted to if such Guarantee meets the extent constituting an Investment permitted by requirements of clauses (s), (g) or (m), as the case may be, of this Section 7.02(c)(iii)7.03;
(d) Indebtedness of the Borrower Parent or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note constitutes a negotiable instrument and is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower Parent or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of $13,000,000 25,000,000 and 2037.5% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)LTM EBITDA, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the BorrowerParent’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower Parent or any Restricted Subsidiary (i) assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; (provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment Acquisition) or any Permitted Refinancing thereof or (ii) incurred to finance any Permitted Acquisition or any Permitted Refinancing thereof; provided that after giving Pro Forma Effect pro forma effect to such Permitted Acquisition and the assumption or incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) $25,000,000, plus (y) any additional amount of such Indebtedness so long as the greater of $16,250,000 and 25% of Consolidated EBITDA Total Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.091.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation) plus is no greater than 5.00 to 1.00 and, if such Indebtedness is to be secured on a first priority basis, it shall be designated as “Additional First Lien Debt” under (yand as defined in) additional indebtedness so long the Closing Date Intercreditor Agreement and the Consolidated Senior Secured Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation and treating all refinancing Indebtedness in respect of such Indebtedness that is unsecured or secured on a junior lien basis to the Term Loans as at all times being secured on a first priority basis (unless Parent complies with the Consolidated Total Net Leverage Ratio described in preceding clause (y) above at the time of the incurrence of such refinancing Indebtedness)) is no greater than 3.50 to 1.00, in each case determined on a Pro Forma Basis; provided that in the case of clause (y), any such Indebtedness assumed or incurred by a Restricted Subsidiary that is not a Loan Party (together with any Indebtedness assumed or incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(s)) does not exceed in the aggregate at any time outstanding the greater than 4.25:1:00of $12,500,000 and 18.75% of LTM EBITDA, in each case determined at the time of such assumption or incurrence; provided, on a Pro Forma Basis in accordance with Section 1.09; provided thatfurther, that in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the remaining Weighted Average Life to Maturity of any then outstanding Term Loan outstanding at Loans and meets the time such Indebtedness is incurred or issuedPermitted Other Debt Conditions, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be Permitted Acquisition or a permitted Investment made pursuant to a legally binding commitment entered into a that time when no Event of Default under Section 8.01(a) exists or 8.01(fwould result therefrom)) and , (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed may be in the greater form of (x) $9,750,000 one or more series of notes which may be unsecured or secured on a first lien, pari passu or junior basis with the Facilities or (y) one or more series of loans which may be unsecured or secured on a junior lien basis with respect to the Facilities and (D) the terms of any such Indebtedness that are not substantially identical to the then existing Loans shall be not materially more favorable (taken as a whole) to the investors providing such Indebtedness than those applicable to the then existing Loans or otherwise reasonably acceptable to the Administrative Agent (except for (x) covenants or other provisions applicable only to periods after the Maturity Date of the Initial Term Loans existing at the time of incurrence of such Indebtedness and (y) 15% of Consolidated EBITDA any financial maintenance covenant to the extent such covenant is also added for the benefit of the Borrower Lenders hereunder under any applicable existing corresponding Facility) or reflect market terms on the date of issuance, as determined at the time of such incurrence on a Pro Forma Basisby Parent;
(h) Indebtedness representing deferred compensation to employees of Holdings Parent or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings Parent or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings Parent or any direct or indirect parent of Holdings Parent permitted by Section 7.06; provided that such Indebtedness shall be subordinated in right of payment to the Obligations on terms reasonably satisfactory to the Administrative Agent;
(j) Indebtedness incurred by Holdings Parent or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger hereunder (including through a merger) or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings Parent or any of its Restricted Subsidiaries 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;
(l) Cash Management Obligations (as defined in the First Lien Credit Agreement) and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days in the ordinary course of its incurrencebusiness;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 25,000,000 and 3537.5% of Consolidated EBITDALTM EBITDA determined at the time of incurrence;
(n) 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;
(o) Indebtedness incurred by the Borrower Parent or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers workers’ compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower Parent or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,00018,750,000;
(r) Indebtedness supported by a Letter letter of Creditcredit issued under the First Lien Credit Agreement, in a principal amount not to exceed the face amount of such Letter letter of Creditcredit;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s7.03(u) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 18,750,000 and 1525% of Consolidated LTM EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(tv) Indebtedness of Parent and its Restricted Subsidiaries in respect of seller financing in an aggregate amount not to exceed $12,500,000 at any time and any Permitted Refinancing thereof;
(i) Indebtedness under the First Lien Credit Agreement in an aggregate principal amount not to exceed (A) $303,000,000, plus (B) the product of (x) the amount of any First Lien Incremental Term Loans, any Incremental Revolving Credit Commitments or First Lien Incremental Equivalent Debt, in each case, under and pursuant to, and incurred in accordance with the terms of, the First Lien Credit Agreement, multiplied by (y) 120%; provided that, if the First Lien Credit Agreement is amended, restated, modified, waived, supplemented or replaced following the Closing Date, this clause (B) shall in no event allow on any date of determination an aggregate principal amount of Indebtedness to be incurred pursuant to this clause (B) that is in excess of the product of (x) the aggregate principal amount that could have been incurred on such date pursuant to the provisions of Section 2.14 of the First Lien Credit Agreement as in effect on the Closing Date multiplied by (y) 120%, and (ii) any Permitted Refinancing in respect of any of the foregoing Indebtedness;
(ux) Indebtedness incurred in reliance on an amount equal to 100% of the Net Proceeds received by Parent from the issuance or sale of Equity Interests of Parent since the Amendment No. 1 Effective Date (other than proceeds of Disqualified Equity Interests or the Cure Amount or sales of Equity Interests to any of its Subsidiaries) to the extent such Net Proceeds have not been applied pursuant to Section 7.02, 7.06 or 7.13 (and do not otherwise increase the Cumulative Credit;
Credit or the Excluded Contribution and are not used to fund Equity Funded Employee Plan Costs) (v) “Contribution Indebtedness”); provided that such Indebtedness is designated as “Contribution Indebtedness” in a certificate from a Responsible Officer of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of on the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:date incurred;
(i) if such Indebtedness is (in the form of (x) one or more series of notes which may be unsecured, secured on a junior lien basis with the Facilities or secured on a pari passu in right of security basis with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 Facilities or (y) to the extent incurred in connection with a Permitted Acquisition one or other Investment permitted hereunder, the greater more series of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition loans which may be unsecured or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior lien basis in right of security with respect to the Obligations, Facilities incurred by the aggregate principal amount of Borrower or Parent to the extent that the Borrower or Parent shall have been permitted to incur such Indebtedness pursuant to and such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) be deemed to the extent be incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as reliance on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other InvestmentSection 2.14(d)(iv); provided that (A) such Indebtedness shall not mature earlier than the aggregate principal amount at any time outstanding Maturity Date applicable to the Initial Term Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of Subsidiaries that are non-Loan Parties the Initial Term Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently Guaranteed the Obligations and (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance (as determined by the Borrower) (such Indebtedness incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and clause (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence being referred to as “Incremental Equivalent Debt”) and (Bii) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)Refinancing thereof;
(xz) the Convertible Notes in an aggregate principal amount not to exceed $82,500,000;
(aa) obligations in respect of Disqualified Equity Interests in an amount not to exceed $3,125,000 at any time outstanding;
(bb) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(wSection 7.03(aa) and Section 7.03(cc); and
(cc) Indebtedness in respect of Permitted Debt Exchange Notes incurred or issued in accordance with Section 2.18 (and Permitted Refinancings thereof);
Appears in 1 contract
Sources: Second Lien Credit Agreement (Global Eagle Entertainment Inc.)
Indebtedness. CreateNone of Holdings, the Borrower or any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) Indebtedness (i) outstanding on the Amendment No. 5 Effective Date (provided that with respect to any Indebtedness in excess of $1,000,000 individually and $5,000,000 in the aggregate, such Indebtedness will only be permitted under this Section 7.03(b) if listed on Schedule 7.03(b)) and any refinancing thereof and (ii) Indebtedness of Holdings to any Subsidiary of Holdings and of any Subsidiary of Holdings to Holdings or any other Subsidiary of Holdings; provided that, other than in the case of intercompany current liabilities incurred in the ordinary course of business in connection with cash management, tax and accounting operations of Holdings and its Subsidiaries, (x) Indebtedness outstanding on the Closing Date of any Subsidiary of Holdings that is not a Loan Party owing to a Loan Party shall be (A) subject to Section 7.02 and listed on Schedule 7.03(b(B) and any Permitted Refinancing thereof evidenced by an Intercompany Note and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted a Subsidiary of Holdings that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant on terms reasonably satisfactory to the Intercompany NoteAdministrative Agent;
(c) Guarantees by the Borrower Holdings and any Restricted Subsidiary in respect of Indebtedness of the Borrower Holdings or any Restricted Subsidiary of Holdings otherwise permitted hereunder; provided that (A) no Guarantee by of the Senior Notes or any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, herein and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower Holdings or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to of any Restricted Subsidiary of Holdings that is not a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged as Collateral to secure the Administrative Agent in accordance with the terms of the Security Agreement Obligations and (y) all such any Indebtedness of any Loan Party owed to any a Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant reasonably satisfactory to subordination terms substantially consistent with the terms of Administrative Agent and shall be either unsecured or, if secured, secured by a Lien that is junior priority to the Intercompany NoteLiens securing the Obligations;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisitionto finance the purchase, constructionlease, repair, replacement, lease construction or improvement of a fixed property (real or capital asset incurred personal) or equipment (whether through the direct purchase of the assets or the Capital Stock of any Person owning such assets) by the Borrower Holdings or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 15,000,000 and 200.75% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence Total Assets (together with any Permitted Refinancings thereof) at any time outstanding and outstanding, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and (iii) any Permitted Refinancing of such Attributable Indebtednessany of the foregoing;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks that are incurred in the ordinary course of business (and not for speculative purposes and Guarantees thereofpurposes): (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted to be incurred under Section 7.03; (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (C) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases; provided that any such Guarantees by Loan Parties that, the aggregate amount of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment obligations under Swap Contracts permitted by Section 7.02(c)(iii)this clause (f) shall not exceed $20,000,000 at any one time outstanding;
(g) Indebtedness not to exceed $30,000,000 at any one time outstanding, (i) of the Borrower or any of its Restricted Subsidiary assumed or Subsidiaries incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or to finance an acquisition and (ii) of Persons that are acquired by the Borrower or any of its Restricted Subsidiaries or merged into the Borrower or a Restricted Subsidiary in accordance with terms of this Agreement; provided, however, that after giving Pro Forma Effect effect to such Permitted Acquisition acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of either: (x1) the greater of $16,250,000 and 25% of Consolidated EBITDA (Fixed Charge Coverage Ratio shall not be less than 2.00 to 1.00 determined on a Pro Forma Basis in accordance with Section 1.09as of the last day of the most recently ended Test Period or (2) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Fixed Charge Coverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, calculated on a Pro Forma Basis in accordance with Section 1.09as of the last day of the most recently ended Test Period would be greater than immediately prior to such acquisition; provided thatfurther, in the case of clause (ii)however, that (A) any such Indebtedness does not mature prior to described above has a final stated maturity at least six months after the date that is Maturity Date for the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, B-2 Loans and (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-any Loan Parties incurred pursuant to this Section 7.03(g) Party shall not exceed either be unsecured or, if secured by a Lien on the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence Collateral, secured on a Pro Forma Basisjunior basis to the Lien securing the Obligations;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business; provided that any such Indebtedness is either unsecured or, to the extent permitted under Section 7.01, secured by Liens that are junior in priority to the Obligations;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each caseother than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, constituting indemnification obligations assets or obligations in respect Subsidiary for the purpose of purchase price (including earn-outs) or other similar adjustmentsfinancing such acquisition;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment expressly permitted hereunder; provided that any such Indebtedness is either unsecured or, to the extent permitted under Section 7.01, secured by Liens that are junior in priority to the Obligations;
(lA) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or (B) Indebtedness arising from the honoring by of a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as provided that such Indebtedness is extinguished within 10 five Business Days of its incurrence;
(m) Indebtedness of Holdings or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed $15,000,000 at any one time outstanding; provided that, such Indebtedness may not be senior in right of payment or Lien priority to the greater Obligations and any unsecured debt that is pari passu with the Obligations in right of payment or any secured Indebtedness that is secured by a Lien that is pari passu with the Liens securing the Obligations incurred under this clause (m) shall not exceed $22,750,000 and 35% of Consolidated EBITDA5,000,000 at any one time outstanding;
(n) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; provided that, the amount of Indebtedness incurred under this Section 7.03(n) shall not exceed $25,000,000 at any one time outstanding;
(o) Indebtedness incurred by the Borrower Holdings or any of its Restricted Subsidiaries in constituting reimbursement obligations with respect of to letters of credit, credit and bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments guarantees issued or created in the ordinary course of business, including without limitation letters of credit in respect of workers workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers workers’ compensation claims; provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(p) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower Holdings or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practicebusiness;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at Indebtedness constituting the Senior Notes and any time outstanding not to exceed $5,000,000Permitted Refinancing thereof;
(r) Indebtedness supported by a Letter of CreditCredit or bank guarantee, in a principal amount not in excess of the stated amount of such Letter of Credit or bank guarantee;
(i) [reserved], (ii) Permitted Notes, the Net Proceeds of which are applied to the permanent repayment of Term Loans pursuant to Section 2.05(b)(iii), (iii) Permitted Notes that are offered on a pro rata basis to all Lenders that are “Qualified Institutional Buyers” (as defined in Rule 144A under the Securities Act of 1933, as amended) holding Term Loans and in a principal amount not to exceed the face amount of Term Loans exchanged for such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred Permitted Notes pursuant to this Section 7.03(sprocedures reasonably acceptable to the Administrative Agent (including procedures designed to comply with securities laws); provided that any Term Loans exchanged for such Permitted Notes shall be deemed to have been repaid immediately upon the effectiveness of such exchange, and (iv) in the case of Permitted Notes incurred under any of the foregoing clauses (ii) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09iii), in each case determined at the time of incurrencePermitted Refinancings thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w)(s) above and (y) through (z) below;
(u) [reserved];
(v) Indebtedness incurred by Foreign Subsidiaries to third parties other than Holdings or any of its Subsidiaries in an aggregate principal amount not to exceed $10,000,000 at any time outstanding and any Permitted Refinancing thereof;
(w) Indebtedness under the Foreign L/C Facility in an aggregate principal amount not to exceed $30,000,000 at any time outstanding; provided that such Indebtedness may be recourse to Holdings, but shall not be secured by a Lien on the assets of Holdings and any Permitted Refinancing thereof;
(x) [reserved];
(y) the Second Lien Notes and any Permitted Refinancing thereof; and
(z) the Third Lien Notes. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that (i) all Indebtedness outstanding under the Loan Documents will at all times be deemed to be outstanding in reliance only on the exception in clause (a) of Section 7.03, and (ii) all Indebtedness constituting the Senior Notes will be deemed to be outstanding in reliance only on the exception in clause (q) of Section 7.03.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Unsecured Indebtedness of the Borrower or any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant Restricted Subsidiary; provided that both immediately prior and after giving Pro Forma Effect to Section 2.14 such incurrence no Default or 2.15)Event of Default shall exist or result therefrom;
(b) Indebtedness of the Borrower and any of its Subsidiaries under the Loan Documents;
(xc) Indebtedness (i) outstanding on the Closing Date date hereof and listed on Schedule 7.03(b7.03(c) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Notedate hereof;
(cd) Guarantees by the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunderhereunder (except that a Restricted Subsidiary that is a Non-Loan Party may not, by virtue of this Section 7.03(d), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise incur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing High Yield Note, Second Lien Facility or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Guaranty and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(de) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) that, all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms set forth in Section 5.03 of the Intercompany NoteSecurity Agreement;
(ef) so long as the aggregate amount of Indebtedness incurred pursuant to this clause (f) does not exceed the greater of $100,000,000 and 4% of Total Assets, (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and construction, repair, replacement or improvement, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m7.05(f) and (iii) any Permitted Refinancing of such Attributable Indebtednessany Indebtedness set forth in the immediately preceding clauses (i) and (ii);
(fg) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(gh) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition, provided that (x) such Indebtedness (i) was not incurred in contemplation of such Permitted Acquisition, (ii) is secured only by the assets acquired in the applicable Permitted Acquisition (including any acquired Equity Interests), (iii) the only obligors with respect to any Indebtedness incurred pursuant to this paragraph shall be those Persons who were obligors of such Indebtedness prior to such Permitted Acquisition (and any owner of any Equity Interests of a Subsidiary acquired in such Permitted Acquisition, which owner may provide only a non-recourse pledge of such Equity Interests to support such Indebtedness), and (y) both immediately prior and after giving effect thereto no Default shall exist or other Investment not prohibited hereunderresult therefrom;
(i) Indebtedness of any Restricted Subsidiary (A) assumed in connection with any Permitted Acquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) incurred to finance a Permitted Acquisition or other Investment or and (ii) any Permitted Refinancing of the foregoing; provided, that in the case of each of (i) and (ii) above, such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (w) is unsecured or is subordinated to the Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Notes Indenture as of the Closing Date, (iix) both immediately prior and after giving Pro Forma Effect effect thereto, no Default shall exist or result therefrom, (y) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the Maturity Date of the Term Loans (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemptions provisions satisfying the requirement of clause (z) hereof) and (z) has terms and conditions (other than interest rate and redemption premiums), taken as a whole, that are not materially less favorable to such Permitted Acquisition the Borrower as the terms and conditions of the Senior Subordinated Notes as of the Closing Date; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, as applicable, together with a reasonably detailed description of the aggregate amount material terms and conditions of such Indebtedness at any time outstanding does not exceed or drafts of the sum documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrower within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees); provided further that notwithstanding anything contained in the Loan Documents to the contrary, (xa) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance only obligors with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of respect to any Indebtedness incurred pursuant to clause (ii), (A) such of this paragraph or any Permitted Refinancing of Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard respect thereof shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding those Persons who were obligors of such Indebtedness of immediately prior to such Permitted Acquisition and (b) Restricted Subsidiaries that are nonNon-Loan Parties incurred may not incur Indebtedness pursuant to this Section 7.03(gclause (i) shall not exceed the greater in an aggregate outstanding amount in excess of (x) $9,750,000 and (y) 155% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma BasisForeign Subsidiary Total Assets;
(hj) Indebtedness representing deferred compensation to employees of Holdings or any of its the Borrower and the Restricted Subsidiaries incurred in the ordinary course of business;
(ik) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower (or any direct or indirect parent of Holdings the Borrower) permitted by Section 7.06;
(jl) Indebtedness incurred by Holdings the Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(km) Indebtedness consisting of obligations of Holdings the Borrower or any of its the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ln) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(mo) Indebtedness in an aggregate principal amount that not to exceed $75,000,000 at the any time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDAoutstanding;
(np) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(oq) Indebtedness incurred by the Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(pr) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qs) letters Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is non recourse (except for Standard Securitization Undertakings) to the Borrower or any of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000its Restricted Subsidiaries;
(rt) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(su) Indebtedness in respect of the High Yield Notes and any Permitted Refinancing thereof;
(i) Indebtedness under a Second Lien Facility in an aggregate principal amount not to exceed $100,000,000 at any time outstanding; provided that at the time of the incurrence of such Indebtedness and after giving Pro Forma Effect thereto, no Default exists or would result therefrom, and (ii) Permitted Refinancings in respect thereof; provided that the amount of Indebtedness incurred pursuant to this clause (v) shall reduce on a dollar-for-dollar basis the Incremental Availability; and
(w) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (w) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 and 155% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Foreign Subsidiary Total Assets, in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such which Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) be secured only to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investmentby Section 7.01(n); provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);and
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(w) above. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (x) above, the Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that (i) all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred on such date in reliance only on the exception in clause (b) of Section 7.03, and (ii) all Indebtedness outstanding under the High Yield Notes will be deemed to have been incurred on such date in reliance only on the exception of clause (u) of Section 7.03.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower and any Loan Party of its Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding on the Closing date hereofRestatement Effective Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing date hereofRestatement Effective Date and any Permitted Refinancing thereofrefinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an intercompany note and (y) all such intercompany Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Notean intercompany note;
(c) Guarantees by the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunderhereunder (except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise incur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing High Yield Note, the Unsecured Term Loan, any Subordinated Lien Facility or Specified any Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Guaranty and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms set forth in Section 5.03 of the Intercompany NoteSecurity Agreement;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within three hundred and sixty-five (365) days after the applicable asset acquisition, construction, repair, replacement or improvement in an aggregate amount at any one time not to exceed the greater of $13,000,000 150,000,000 and 205.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence Total Assets (together with any Permitted Refinancings thereof) at any time outstanding and ), (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m7.05(f) and (iii) any Permitted Refinancing of such Attributable Indebtednessany Indebtedness set forth in the immediately preceding clauses (i) and (ii);
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition, provided that (x) such Indebtedness (i) was not incurred in contemplation of such Permitted Acquisition and any Permitted Refinancing thereof, (ii) is secured only by the assets acquired in the applicable Permitted Acquisition (including any acquired Equity Interests), (iii) the only obligors with respect to any Indebtedness incurred pursuant to this clause (g) shall be those Persons who were obligors of such Indebtedness prior to such Permitted Acquisition and (y) both immediately prior and after giving effect thereto no Default shall exist or other Investment not prohibited hereunderresult therefrom;
(i) Indebtedness (A) assumed in connection with any Permitted Acquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) of the Borrower or any Restricted Subsidiary incurred to finance a Permitted Acquisition and (ii) any Permitted Refinancing of the foregoing; provided, that in the case of each of (i) and (ii) above, such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (w) is unsecured or is subordinated to the Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Notes Indenture as of the Restatement Effective Date or as otherwise reasonably satisfactory to the Administrative Agent, (x) both immediately prior and after giving effect thereto no Default shall exist or result therefrom, (y) matures after, and does not require any scheduled amortization or other Investment scheduled payments of principal prior to, the Latest Term Loan Maturity Date of the Term Loans and (z) has terms and conditions (other than interest rate and redemption premiums), taken as a whole, that are not materially less favorable to the Borrower as the terms and conditions of the Senior Subordinated Notes as of the Restatement Effective Date or as otherwise consistent with the market for such Indebtedness; provided that notwithstanding anything contained in the Loan Documents to the contrary, (a) the only obligors with respect to any Indebtedness incurred pursuant to clause (A) of this paragraph or any Permitted Refinancing of Indebtedness in respect thereof or (ii) after giving Pro Forma Effect shall be those Persons who were obligors of such Indebtedness immediately prior to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (xb) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are nonNon-Loan Parties incurred may not incur Indebtedness pursuant to this Section 7.03(gclause (h) shall not exceed the greater in an aggregate outstanding amount in excess of (x) $9,750,000 and (y) 153.0% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma BasisTotal Assets;
(hi) Indebtedness representing deferred compensation to employees of Holdings the Borrower (or any direct or indirect parent of its the Borrower) and the Restricted Subsidiaries incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.06;
(jk) Indebtedness incurred by Holdings the Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of obligations of Holdings the Borrower or any of its the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(mn) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not to exceed the greater of $22,750,000 250,000,000 and 358.0% of Consolidated EBITDATotal Assets at any time outstanding; provided that a maximum of the greater of $100,000,000 and 3.0% of Total Assets in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties;
(no) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qr) letters Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to the Borrower or any of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000its Restricted Subsidiaries;
(rs) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(st) Indebtedness in respect of the High Yield Notes and the Unsecured Term Loan and, in each case, any Permitted Refinancing thereof;
(u) Indebtedness in respect of (i) any Permitted Other Debt issued or incurred in exchange for, or which modifies, extends, refinances, renews, replaces or refunds or the Net Cash Proceeds therefrom are applied to the prepayment of Term Loans in the manner set forth in Section 2.05(b)(iii) and (ii) any Permitted Refinancing of such Indebtedness; provided that, in the case of this subclause (ii), such Indebtedness otherwise complies with the definition of Permitted Other Debt;
(v) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (v) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 300,000,000 and 1510% of Consolidated EBITDA Total Assets;
(determined i) Indebtedness under a Subordinated Lien Facility in an aggregate principal amount not to exceed $200,000,000 at any time outstanding; provided that at the time of the incurrence of such Indebtedness and after giving Pro Forma Effect thereto, no Default exists or would result therefrom, and (ii) Permitted Refinancings in respect thereof; provided that the amount of Indebtedness incurred pursuant to this clause (w) shall not exceed at any time outstanding the sum of (1) $415,000,000 minus the aggregate amount of Incremental Term Loans and Incremental Revolving Credit Commitments incurred or effected pursuant to Section 2.14(a)(1) and the aggregate amount of Indebtedness incurred pursuant to Section 7.03(aa) plus (2) all voluntary prepayments of Term Loans and (to the extent coupled with a permanent reduction of the Revolving Credit Commitments) of Revolving Credit Loans prior to such time;
(x) Unsecured Indebtedness of the Borrower or any Restricted Subsidiary; provided that (A) both immediately prior and after giving Pro Forma Effect to such incurrence no Default or Event of Default shall exist or result therefrom and (B) if such Indebtedness is subordinated to the Obligations, it is done so on terms taken as a whole, that are not materially less favorable to the Borrower as the terms and conditions of the Senior Subordinated Notes as of the Restatement Effective Date, as otherwise consistent with the market for such Indebtedness or reasonably satisfactory to the Administrative Agent;
(y) Indebtedness of the Borrower or any Restricted Subsidiary incurred to finance a Permitted Acquisition; provided that such Indebtedness shall (A) in the case of Indebtedness secured on a Pro Forma Basis pari passu basis with the Facilities, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in accordance the case of Indebtedness secured on a junior basis to the Facilities, have a maturity date that is at least 91 days after the Latest Maturity Date at the time such Indebtedness is incurred, (B) in the case of Indebtedness secured on a pari passu basis with the Facilities, have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Term Loans and, in the case of Indebtedness secured on a junior basis to the Facilities, shall not be subject to scheduled amortization prior to maturity, (C) if such Indebtedness is secured on a junior basis by a Loan Party, be subject to the Second Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be subject to the First Lien Intercreditor Agreement, (D) in the case of Indebtedness secured on a pari passu basis with the Facilities, be subject to the “most favored nation” provision contained in Section 1.092.14 and (E) have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole);
(z) to the extent constituting Indebtedness, obligations in respect of the ‘Subsequent Payment Amount’ (under and as defined in that certain Interest Purchase Agreement dated September 18, 2017 among the Borrower, ▇▇▇▇ Pharmica LLC, a limited liability company organized under the laws of Indiana, ▇▇▇▇ Group Incorporated, a corporation incorporated under the laws of Indiana, and the other Persons party thereto, as in effect on the Amendment No. 3 Effective Date);
(aa) (x) Indebtedness secured on a pari passu basis with the Facilities, (y) Indebtedness secured on a junior basis to the Facilities or (z) unsecured Indebtedness, in an aggregate principal amount not to exceed the sum of (i) $415,000,000 minus the aggregate amount of Incremental Term Loans and Incremental Revolving Credit Commitments incurred or effected pursuant to Section 2.14(a)(1) and the aggregate amount of Indebtedness incurred pursuant to Section 7.03(w) plus (ii) all voluntary prepayments of Term Loans and (to the extent coupled with a permanent reduction of the Revolving Credit Commitments) of Revolving Credit Loans prior to such time; provided that such Indebtedness shall (A) in the case of clause (x) above, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of clause (y) above, have a maturity date that is at least 91 days after the Latest Maturity Date at the time such Indebtedness is incurred, (B) in the case of clause (x) above, have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Term Loans and, in the case of clause (y) above, shall not be subject to scheduled amortization prior to maturity, (C) if such Indebtedness is secured on a junior basis by a Loan Party, be subject to the Second Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be (x) in the form of debt securities and (y) subject to the First Lien Intercreditor Agreement, (D) in the case of clause (x) above, be subject to the “most favored nation” provision contained in Section 2.14 and (E) have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole); provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(bb), does not exceed in the aggregate at any time outstanding, the greater of $100,000,000 and 3.0% of Total Assets, in each case determined at the time of incurrence;
(tbb) Credit Agreement Refinancing Indebtedness;
(u) Permitted Ratio Debt and Permitted Refinancings thereof; provided, further, that any such Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its pursuant to this definition by a Restricted Subsidiaries Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party that complies with clauses (apursuant to Section 7.03(aa), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited does not exceed in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 100,000,000 and (y) 153.0% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09)Total Assets, in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)incurrence;
(xcc) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);i
Appears in 1 contract
Sources: Credit Agreement (Catalent, Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party of any Permitted Ratio Debt or Indebtedness under Section 7.03(g) or (m) (or any Permitted Refinancing in respect thereof) shall only be permitted to if such Guarantee meets the extent constituting an Investment permitted by requirements of clauses (s), (g) or (m), as the case may be, of this Section 7.02(c)(iii)7.03;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note constitutes a negotiable instrument and is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of $13,000,000 18,000,000 and 2024% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)LTM EBITDA, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary (i) assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; (provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment Acquisition) or any Permitted Refinancing thereof or (ii) incurred to finance any Permitted Acquisition or any Permitted Refinancing thereof; provided that after giving Pro Forma Effect pro forma effect to such Permitted Acquisition and the assumption or incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) $60,000,000, plus (y) any additional amount of such Indebtedness so long as the greater of $16,250,000 and 25% of Consolidated EBITDA Total Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.091.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation) plus is no greater than 5.50 to 1.00, and, (yI) additional indebtedness so long if such Indebtedness is designated as “Additional First Lien Debt” under (and as defined in) the Closing Date Intercreditor Agreement, the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation and treating all refinancing Indebtedness in respect of such Indebtedness that is unsecured or secured on a junior lien basis to the First Lien Term Facility and the Revolving Credit Facility as at all times being secured on a first priority basis (unless the Borrower complies with the Consolidated Total Net Leverage Ratio described in preceding clause (y) above or the Consolidated Total Secured Net Leverage Ratio described in subclause (II) below, as the case may be, at the time of the incurrence of such refinancing Indebtedness)) is no greater than 3.75 to 1.00 or (II) if such Indebtedness is designated as “Additional Second Lien Debt” under (and as defined in) the Closing Date Intercreditor Agreement, the Consolidated Total Secured Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation and treating all refinancing Indebtedness in respect of such Indebtedness that is unsecured as at all times being secured on a pari passu basis to the Facility (unless the Borrower complies with the Consolidated Total Net Leverage Ratio described in preceding clause (y) above at the time of the incurrence of such refinancing Indebtedness) is no greater than 4.50 to 1.00, in each case determined on a Pro Forma Basis; provided that in the case of clause (y), any such Indebtedness assumed or incurred by a Restricted Subsidiary that is not a Loan Party (together with any Indebtedness assumed or incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(s) and (u) (and any Permitted Refinancing of the foregoing, to the extent assumed or incurred by a Restricted Subsidiary that is not a Loan Party)) does not exceed in the aggregate at any time outstanding the greater than 4.25:1:00of $60,000,000 and 60% of LTM EBITDA, in each case determined at the time of such assumption or incurrence; provided, on a Pro Forma Basis in accordance with Section 1.09; provided thatfurther, that in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the remaining Weighted Average Life to Maturity of any then outstanding Term Loan outstanding at Loans or First Lien Term Loans, as the time such Indebtedness is incurred or issuedcase may be, and meets the Permitted Other Debt Conditions, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be Permitted Acquisition or a permitted Investment made pursuant to a legally binding commitment entered into a that time when no Event of Default under Section 8.01(a) exists or 8.01(fwould result therefrom)) and , (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed be in the greater form of (x) $9,750,000 one or more series of notes which may be unsecured or secured on a senior lien, pari passu or junior lien basis with the Facility or (y) one or more series of loans which may be unsecured or secured on a junior lien basis with respect to the Facility, (D) in no event will any such Indebtedness incurred by a Loan Party (other than Indebtedness secured on a senior lien basis with respect to the Facility) be permitted to be mandatorily prepaid prior to the repayment in full of the Initial Term Loans, except (in the case of any such Indebtedness secured on a pari passu basis with the Facility only) if accompanied by at least a ratable payment of the Initial Term Loans and (E) the terms of any such Indebtedness that are not substantially identical to the then existing Loans shall be no less favorable (taken as a whole) to the Lenders under the then existing Loans than those applicable to the then existing Loans or otherwise reasonably acceptable to the Administrative Agent (except for (x) covenants or other provisions applicable only to periods after the Maturity Date of the Initial Term Loans existing at the time of incurrence of such Indebtedness and (y) 15% of Consolidated EBITDA any financial maintenance covenant to the extent such covenant is also added for the benefit of the Borrower Initial Term Loan Lenders hereunder) or reflect market terms on the date of issuance, as determined at by the time of such incurrence on a Pro Forma BasisBorrower;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06; provided that such Indebtedness shall be subordinated in right of payment to the Obligations on terms reasonably satisfactory to the Administrative Agent;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger hereunder (including through a merger) or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries 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;
(l) Cash Management Obligations (as defined in the First Lien Credit Agreement) and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days in the ordinary course of its incurrencebusiness;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 30,000,000 and 3542% of Consolidated EBITDALTM EBITDA determined at the time of incurrence;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers workers’ compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder a currency other than Dollars or an Approved Alternate Currency (as defined in the First Lien Credit Agreement) in an aggregate amount at any time outstanding not to exceed $5,000,0002,400,000;
(r) Indebtedness supported by a Letter letter of Creditcredit issued under the First Lien Credit Agreement, in a principal amount not to exceed the face amount of such Letter letter of Creditcredit;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s7.03(u) and then outstanding for all such Persons taken togethertogether and all Indebtedness assumed or incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(g) in reliance on clause (y) thereof and Section 7.03(s) (and any Permitted Refinancing of the foregoing, to the extent assumed or incurred by a Restricted Subsidiary that is not a Loan Party), does not exceed the greater of $9,750,000 60,000,000 and 1560% of Consolidated LTM EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower and its Restricted Subsidiaries in respect of seller financing and any Permitted Refinancing in respect thereof in an aggregate amount not to exceed $9,000,000 at any time outstanding;
(i) Indebtedness under the First Lien Credit Agreement (including any First Lien Incremental Term Loans under and pursuant to, and in accordance with the terms of, the First Lien Credit Agreement), (ii) any First Lien Incremental Equivalent Debt, (iii) any First Lien Credit Agreement Refinancing Indebtedness, (iv) any First Lien Permitted Debt Exchange Notes and (v) any Permitted Refinancing in respect of any of the foregoing Indebtedness (other than First Lien Credit Agreement Refinancing Indebtedness);
(x) Indebtedness in an amount equal to 100% of the Net Proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than proceeds of Disqualified Equity Interests, the Cure Amount or sales of Equity Interests to Holdings or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses Subsidiaries) to the extent such Net Proceeds or cash have been contributed, directly or indirectly, to common equity capital of the Borrower and have not been applied pursuant to Section 7.02, 7.06 or 7.13 (a), (c) and (ddo not otherwise increase the Cumulative Credit or the Excluded Contribution and are not used to fund Equity Funded Employee Plan Costs) (“Contribution Indebtedness”); provided that such Indebtedness is designated as applicable) “Contribution Indebtedness” in a certificate from a Responsible Officer of the Applicable Requirements, so long as no Default or Event of Default Borrower on the date incurred;
(limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(ay) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is in the form of (x) one or more series of notes which may be unsecured, secured on a junior lien basis with the Facility or secured on a pari passu in right of security basis with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 Facility or (y) to the extent incurred in connection with a Permitted Acquisition one or other Investment permitted hereunder, the greater more series of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition loans which may be unsecured or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior lien basis in right of security with respect to the ObligationsFacility, incurred by the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) Borrower to the extent incurred in connection with a Permitted Acquisition or other Investment that the Borrower shall have been permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if incur such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as pursuant to and in reliance on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other InvestmentSection 2.14(d)(iv); provided that (A) such Indebtedness shall not mature earlier than the aggregate principal amount at any time outstanding Maturity Date applicable to the Initial Term Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of Subsidiaries the Initial Term Loans, (C) no Person is a borrower or guarantor with respect to such Indebtedness unless such Person is a Guarantor which shall have previously or substantially concurrently Guaranteed the Obligations, (D) such Indebtedness shall not be secured by any Lien on any property or asset that are non-Loan Parties does not constitute Collateral securing the Facilities, (E) in no event will any Incremental Equivalent Debt be permitted to be mandatorily prepaid prior to the repayment in full of the Initial Term Loans, except (in the case of Incremental Equivalent Debt secured on a pari passu basis with the Facility only) if accompanied by at least a ratable payment of the Initial Term Loans and (F) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance (as determined by the Borrower) (such Indebtedness incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and clause (y)) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);bein
Appears in 1 contract
Sources: Second Lien Credit Agreement (Jason Industries, Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) in the case of the Borrower:
(i) Indebtedness owed to a wholly-owned Subsidiary Guarantor, which Indebtedness shall (A) constitute Pledged Debt, (B) be on terms (including subordination terms) acceptable to the Administrative Agent and (C) if greater than $1,500,000 be evidenced by promissory notes in form and substance reasonably satisfactory to the Administrative Agent and such promissory notes shall be pledged as security for the Obligations of any Loan Party the holder thereof under the Loan Documents (including any Indebtedness incurred to which such holder is a party and delivered to the Collateral Agent pursuant to Section 2.14 or 2.15)the terms of the Security Agreement;
(ii) Indebtedness under the Second Lien Credit Agreement in an aggregate principal amount not to exceed $100,000,000 plus any Permitted Incremental Second Lien Acquisition Indebtedness and any Permitted Incremental Junior Capex Indebtedness, and Indebtedness under any Junior Credit Agreement that constitutes Permitted Incremental Junior Capex Indebtedness, and any Permitted Refinancing Indebtedness in respect of any thereof; and
(iii) Specified Convertible Debt;
(b) in the case of any Subsidiary, (xi) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted to a wholly-owned Subsidiary otherwise permitted hereunderGuarantor; provided that (A) no Guarantee by any Restricted Subsidiary of any such Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation (1) shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, constitute Pledged Debt and (B2) if the Indebtedness being Guaranteed is subordinated to the Obligationsgreater than $1,000,000, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged notes in form and substance reasonably satisfactory to the Administrative Agent in accordance with and such promissory notes shall be pledged as security for the Obligations of the holder thereof under the Loan Documents to which such holder is a party and delivered to the Collateral Agent pursuant to the terms of the Security Agreement and (yB) all in the case of any such Indebtedness of any Loan Party owed to any Restricted a Subsidiary if any, that is not a Loan Party Party, or that is a Subsidiary Guarantor that is not wholly-owned, such Indebtedness shall be unsecured and subordinated (1) on terms reasonably acceptable to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
Administrative Agent and (e2) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount for all such Subsidiaries not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) 2,000,000 at any time outstanding and (ii) Attributable Indebtedness arising out Guarantees of sale-leaseback transactions permitted by Section 7.05(m) the “Obligations” as defined in the Second Lien Credit Agreement and any guarantees under the documentation related to any Junior Credit Agreement that constitutes Permitted Refinancing Incremental Junior Capex Indebtedness (but only to the extent that such Subsidiary shall have Guaranteed the Obligations as defined herein); and
(c) in the case of such Attributable Indebtednessthe Borrower and the Subsidiary Guarantors, without duplication:
(i) Indebtedness under the Loan Documents;
(fii) Indebtedness in respect of Swap Contracts designed to hedge against not for speculative purposes, incurred in the Borrower’s ordinary course of business and consistent with prudent business practice;
(iii) Surviving Indebtedness outstanding on the date hereof and listed on part (b) of Schedule 5.05 and Permitted Refinancing Indebtedness in respect of such Surviving Indebtedness;
(iv) Guarantees of the Borrower or any Restricted Subsidiary Guarantor in respect of Indebtedness otherwise permitted hereunder of the Borrower or any of the wholly-owned Subsidiary Guarantors;
(v) Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations and purchase money obligations for fixed or capital assets within the limitations set forth in Section 7.01(h) and Indebtedness of any Person that becomes a Subsidiary Guarantor after the date hereof in accordance with the terms of Section 7.03(i) which Indebtedness is existing at the time such Person becomes a Subsidiary of the Borrower (other than Indebtedness incurred solely in contemplation of such Person becoming a Subsidiary’s exposure ); provided that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $20,000,000;
(vi) [Intentionally omitted];
(vii) Indebtedness consisting of promissory notes issued by any Loan Party to interest ratescurrent or former officers, foreign exchange rates directors and employees (or commodities pricing risks their estates, spouses or former spouses) of the Borrower or any Subsidiary Guarantor issued to purchase or redeem capital stock of the Borrower permitted by Section 7.06; provided that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $1,000,000;
(viii) Indebtedness incurred in the ordinary course of business in connection with cash pooling arrangements, cash management and other similar arrangements consisting of netting arrangements and overdraft protections incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; in excess of $5,000,000 in the aggregate at any time outstanding, provided that any such Guarantees by Loan Parties obligations arising in respect of such Indebtedness of Restricted Subsidiaries that are not Loan Parties overdraft protections shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)extinguished within five Business Days;
(gix) Indebtedness consisting of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case financing of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred insurance premiums in the ordinary course of business;; and
(ix) Indebtedness consisting letters of promissory notes issued by Holdings credit to support workers compensation obligations, bankers acceptances, performance bonds, surety bonds and performance guarantees of the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangementsSubsidiary Guarantor, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding , not to exceed $5,000,000;5,000,000 in the aggregate at any time outstanding; and
(rxi) unsecured Indebtedness supported by a Letter of Credit, (except as may be secured to the extent set forth in a Section 7.01(w)) in an aggregate principal amount not to exceed the face amount of such Letter of Credit;$5,000,000 at any time outstanding, incurred at a time when no Default has occurred and is continuing.
(sd) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated For purposes of determining compliance with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s7.02, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (i) and then outstanding for all such Persons taken together, does not exceed through (xi) of the greater of $9,750,000 and 15% of Consolidated EBITDA immediately preceding paragraph (determined on a Pro Forma Basis in accordance with Section 1.09c), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or shall, in its sole discretion, classify such item of Indebtedness in any of its Restricted Subsidiaries that is a Loan Party manner that complies with clauses (a), (c) this Section 7.02 and (d) (as applicable) of will only be required to include the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) amount and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount type of such Indebtedness in one of such clauses. Accrual of interest, accretion of accreted value and the payment of interest through the issuance of shares of the Borrower’s common stock paid-in-kind shall not exceed be deemed to be an amount so long as on and as incurrence of the date Indebtedness for purposes of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness7.02.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Sources: First Lien Senior Secured Credit Agreement (Terremark Worldwide Inc)
Indebtedness. CreateEach Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(a) (i) Indebtedness of any Loan Party created under the Loan Documents (including with respect to Specified Refinancing Debt), (ii) Indebtedness of the Loan Parties evidenced by Refinancing Notes and any Permitted Refinancing Indebtedness incurred pursuant to Section 2.14 or 2.15)in respect thereof and (iii) Indebtedness of the Loan Parties evidenced by Refinancing Junior Loans and any Permitted Refinancing Indebtedness in respect thereof;
(b) (x) Indebtedness outstanding existing on the Closing Date date hereof and listed on set forth in Schedule 7.03(b) 6.01 and any Permitted Refinancing thereof Indebtedness in respect thereof;
(c) Indebtedness among the Parent Borrower and its Subsidiaries (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofincluding between or among Subsidiaries); provided that any such intercompany Indebtedness Indebtedness, individually, of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, Subsidiary in excess of $15,000,000 must be expressly subordinated to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent Obligations in accordance with the terms of the Security Agreement and Global Intercompany Note, within 30 days of the incurrence of such Indebtedness or such later date as the Administrative Agent may agree in its sole discretion;
(yd) all such Guarantees by the Parent Borrower of Indebtedness of any Loan Party owed to Subsidiary and by any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of Indebtedness of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Parent Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted other Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in Guarantees by the case Parent Borrower or any Restricted Subsidiary of assumed IndebtednessIndebtedness of any Unrestricted Subsidiary shall be subject to compliance with Section 6.04 (other than clause (e) thereof), such (ii) Guarantees permitted under this clause (d) shall be subordinated to the Obligations of the applicable Restricted Subsidiary to the same extent and on terms not materially less favorable to the Lenders as the Indebtedness so Guaranteed is not incurred in contemplation of such subordinated to the Obligations and (iii) no Indebtedness under the SplitCo Credit Documentation, Permitted Acquisition Ratio Debt, Incremental Equivalent Debt, Refinancing Notes or other Investment any Refinancing Junior Loans or any Permitted Refinancing Indebtedness in respect thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) Guaranteed by any Restricted Subsidiary unless such Restricted Subsidiary is a Loan Party that has Guaranteed the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred Obligations pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of businessGuaranty;
(i) Indebtedness consisting of promissory notes issued by Holdings the Parent Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses Subsidiary incurred to finance the purchase acquisition, lease, construction, replacement, repair or redemption improvement of Equity Interests of Holdings any assets or any direct or indirect parent of Holdings other Investments permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price hereunder (including earn-outs) or other similar adjustments;
rolling stock), including Capital Lease Obligations, mortgage financings, purchase money indebtedness (k) Indebtedness consisting of obligations of Holdings or including any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting servicesindustrial revenue bonds, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management industrial development bonds and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a checkfinancings); provided that, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished incurred prior to or within 10 Business Days of its incurrence;
two hundred seventy (m270) Indebtedness in an aggregate principal amount that at days after such acquisition or lease or the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party whichconstruction, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken togetherreplacement, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower repair or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence improvement and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum aggregate amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred permitted pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);this clause
Appears in 1 contract
Sources: Credit Agreement (Coty Inc.)
Indebtedness. CreateIncur, incurcreate, assume or suffer permit to exist any Indebtedness, exceptexcept that the Borrower and any Restricted Subsidiary (other than an Inactive Subsidiary or Finsub (except as expressly permitted by subsection (q) below)) may incur, create, assume or permit to exist:
(a) Indebtedness of any Loan Party under for borrowed money existing on the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Restatement Closing Date and set forth in Schedule 6.01;
(b) Indebtedness created under (xi) Indebtedness outstanding on this Agreement, (ii) the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof Tranche C Credit Agreement and (yiii) intercompany Indebtedness outstanding on the Closing Date other Loan Documents; provided, however, that the sum of the Tranche C Loans and the undrawn Tranche C Commitments shall not exceed $566,200,000 at any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Notetime;
(c) Guarantees by The Existing Senior Subordinated Notes, the Borrower New Subordinated Notes and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Additional Subordinated Notes;
(d) Indebtedness pursuant to (i) Hedging Agreements and (ii) the Additional L/C Facility; provided, however, that the Additional L/C Exposure (whether created under the Tranche C Credit Agreement or otherwise) shall not exceed $50,000,000 at any time;
(e) Indebtedness of the Borrower (i) Terex or any Restricted Subsidiary owing to any Loan Party or any other wholly owned Restricted Subsidiary (other than an Inactive Subsidiary or issued or transferred Finsub) to any direct other wholly owned Restricted Subsidiary (other than an Inactive Subsidiary or indirect parent of a Loan Party which is substantially contemporaneously transferred Finsub), (ii) any wholly owned Restricted Subsidiary (other than an Inactive Subsidiary or Finsub) to a Loan Party Terex or (iii) Finsub to Terex or any wholly owned Restricted Subsidiary of a Loan Party(other than an Inactive Subsidiary) but onlyincurred pursuant to the Receivables Program; provided, in the case of however, that (i) any Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms prior payment in full of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding Obligations and (ii) Attributable any Indebtedness arising out of sale-leaseback transactions Finsub incurred pursuant to this subsection (e) shall be permitted by Section 7.05(m) and only for such limited period of time as is required to account for any Permitted Refinancing sale of such Attributable IndebtednessProgram Receivables, which period of time shall not in any event exceed two Business Days;
(f) Indebtedness in respect resulting from endorsement of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not negotiable instruments for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred collection in the ordinary course of business;
(ig) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries arising under indemnity agreements to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses title insurers to finance cause such title insurers to issue to the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06Collateral Agent mortgagee title insurance policies;
(jh) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting arising with respect to customary indemnification obligations or obligations in respect of and purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of adjustment obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Asset Sales and Permitted Acquisitions or any other Investment permitted hereunder;
(li) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements incurred in the ordinary course of business with respect to surety and any Guarantees thereof or the honoring by a bank or appeal bonds, performance, insurance and return-of-money bonds and other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceobligations;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(nj) Indebtedness consisting of (i) the financing of insurance premiums Acquired Indebtedness or (ii) takePurchase Money Indebtedness or Capital Lease Obligations incurred in the ordinary course of business after the Original Closing Date; provided that the aggregate principal amount of any such Indebtedness pursuant to this paragraph (j) shall not exceed $125,000,000;
(k) Indebtedness of O&K Mining; provided that the aggregate principal amount of any such Indebtedness pursuant to this paragraph (k) shall not exceed DM17,500,000 or the Euro equivalent;
(l) Floor Plan Guarantees;
(m) Indebtedness incurred under (i) the Italian Facilities in an amount not exceeding Lit12,850,000,000 or the Euro equivalent in the aggregate at any time outstanding and (ii) the Irish Facilities in an amount not exceeding ,10,000,000 in the aggregate at any time outstanding;
(n) Indebtedness incurred to extend, renew or refinance Indebtedness described in paragraph (a), (c), (j), (k) or (l) above ("Refinancing Indebtedness") so long as (i) such Refinancing Indebtedness is in an aggregate principal amount not greater than the aggregate principal amount of the Indebtedness being extended, renewed or refinanced, plus the amount of any interest or premiums required to be paid thereon plus fees and expenses associated therewith, (ii) such Refinancing Indebtedness has a later or equal final maturity and a longer or equal weighted average life than the Indebtedness being extended, renewed or refinanced, (iii) if the Indebtedness being extended, renewed or refinanced is subordinated to the Obligations, the Refinancing Indebtedness is subordinated to the Obligations to the extent of the Indebtedness being extended, renewed or refinanced and (iv) the covenants, events of default and other non-or-pay obligations pricing provisions of the Refinancing Indebtedness shall be no less favorable to the Lenders than those contained in supply arrangementsthe Indebtedness being extended, renewed or refinanced;
(o) Indebtedness classified as Capital Lease Obligations incurred in each case, connection with the purchase of inventory to be sold in the ordinary course of business;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice[Intentionally Omitted];
(q) letters Indebtedness of credit issued in currencies not available hereunder Finsub incurred pursuant to the Receivables Program Documentation in an amount not exceeding $100,000,000 in the aggregate amount at any time outstanding not to exceed $5,000,000outstanding;
(r) other unsecured Indebtedness supported by a Letter of Credit, in a an aggregate principal amount not to exceed the face amount of such Letter of Credit;exceeding $15,000,000 at any time outstanding; and
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with of Foreign Subsidiaries acquired after the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does Restatement Closing Date under local credit lines not exceed the greater of exceeding $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis 25,000,000 in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)outstanding;
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Sources: Amendment Agreement (Terex Corp)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Obligations;
(b) Indebtedness (xincluding any unused commitment in respect thereof) Indebtedness outstanding on the Closing Date and listed on in Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Secured Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation of any Loan Party shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Secured Obligations on the terms set forth herein, herein and (B) if the Indebtedness being Guaranteed is subordinated to the Secured Obligations, such Guarantee shall be subordinated to the Guarantee of the Secured Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only), provided that, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting such Indebtedness is an Investment permitted by Section 7.02(c)(iii)7.02 or consists of any part of a Permitted Reorganization or IPO Reorganization Transaction; provided further that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Collateral Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Secured Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset thereof in an aggregate amount not to exceed the greater of $13,000,000 3,750,000 and 2012.5% of Trailing Four-Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)EBITDA, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Secured Hedge Obligations and other Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary (i) assumed or incurred in connection with any Permitted Acquisition or other similar Investment not prohibited hereunderpermitted hereunder and any Permitted Refinancing thereof; provided that (ix) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other similar Investment permitted hereunder or any Permitted Refinancing thereof and (y) the obligors with respect to such Indebtedness are limited to the Persons acquired in such Permitted Acquisition or Investment or (ii) incurred to finance any Permitted Acquisition or Investment permitted hereunder (including earn-out obligations, Indebtedness incurred to finance the payment thereof and seller notes); provided, that after giving Pro Forma Effect pro forma effect to such Permitted Acquisition or Investment permitted hereunder and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness incurred pursuant to this clause (ii) does not exceed at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 4,500,000 and 2515.0% of Trailing Four Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00EBITDA, in each case case, determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA as of the Borrower determined at the time applicable date of such incurrence on a Pro Forma Basisincurrence;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former managers, officers, managersdirectors, consultantsadvisors, directors and service providers, consultants or employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower or any direct or indirect parent of Holdings the Borrower permitted by Section 7.06;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in connection with the Transactions, a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price adjustments or other similar adjustments (including earn-outs) or other similar adjustmentsouts and obligations in respect of transaction tax benefits);
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries 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;
(l) (i) Secured Cash Management Obligations and Obligations, (ii) other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management Cash Management Services and similar arrangements in the ordinary course of business and any Guarantees thereof or thereof, (iii) Indebtedness resulting from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of businessbusiness and solely with respect to each incurrence pursuant to this clause (iii), so long as such Indebtedness is extinguished within 10 Business Days of its incurrence, and (iv) endorsement of instruments or other payment items for deposit in the ordinary course of business;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 10,000,000 and 3533.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of incurrence;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) to extent constituting Indebtedness, obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case case, in the ordinary course of business or consistent with past practicepractice or to the extent required by Laws or pursuant to any statutory filing;
(q) letters of credit in an aggregate face amount at any time outstanding not to exceed the greater of $3,000,000 and 10.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of incurrence consisting of (i) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding or (ii) documentary or commercial letters of credit not to exceed $5,000,000issued hereunder;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Restricted Subsidiary that is not a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s7.03(u) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 5,250,000 and 1517.5% of Trailing Four Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)EBITDA, in each case determined at as of the time date of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings and Limited Originator Recourse) to the Borrower or any of its the Restricted Subsidiaries Subsidiaries; provided, that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness at any time outstanding in connection therewith shall not exceed $15,000,000;
(w) [reserved];
(x) [reserved];
(y) unsecured Indebtedness in an amount so equal to the lesser of 100% of the net cash proceeds received by Holdings (or any direct or indirect parent thereof) since immediately after the Closing Date from the issuance or sale of Equity Interests of Holdings (or any direct or indirect parent thereof) or cash contributed to the capital of Holdings (or any direct or indirect parent thereof) (in each case, other than proceeds of Disqualified Equity Interests or sales of Equity Interests to Holdings (or any direct or indirect parent thereof) or any of its Subsidiaries) to the extent such net cash proceeds or cash have been contributed to the Borrower and have not been applied pursuant to Section 7.02, 7.06 or 7.13 and do not constitute Cure Amounts;
(i) Indebtedness in respect of Other Term Loans and Other Notes incurred or issued in accordance with Section 2.14 and (ii) Permitted Refinancings thereof;
(aa) Indebtedness incurred by the Borrower as a result of the exchange of Term Loans assigned to the Borrower pursuant to Section 10.07(k), as long as on such Indebtedness would be a Permitted Refinancing of such Term Loans;
(bb) obligations in respect of Disqualified Equity Interests (x) issued to and held by the Borrower, Holdings or any Restricted Subsidiary (to the extent permitted by Section 7.02) or (y) in an amount not to exceed the greater of $1,200,000 and 4.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio incurrence;
(determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(icc) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent intercompany Indebtedness incurred in connection with a Permitted Acquisition Reorganization or other IPO Reorganization Transaction, so long as such intercompany Indebtedness constitutes an Investment permitted hereunderpursuant to Section 7.02(j); and
(dd) Indebtedness in respect of aircraft or related equipment financing in an amount not to exceed $20,000,000 at any time outstanding (together with any amounts incurred under any Aircraft Trust Arrangement); provided, the greater of that, (I) 3.75:1.00 and any such Indebtedness that constitutes Pari Passu Secured Obligations shall be subject to the separate agreement among the Lenders entered into on the Closing Date or a Parity Intercreditor Agreement, as applicable, (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if any such Indebtedness that is incurred pursuant to Section 7.03(a), Section 7.03(s), Section 7.03(t), Section 7.03(u), Section 7.03(z) or Section 7.03(aa) and is secured by the Collateral on a junior basis shall be subject to a Junior Intercreditor Agreement, and (III) any such Indebtedness that constitutes Pari Passu Secured Obligations or which is secured by the Collateral on a junior basis shall be junior in right of security payment to the Revolving Credit Facility to the extent set forth in such agreement among Lenders or such Intercreditor Agreement. For purposes of determining compliance with any Dollar-denominated restriction on the Obligationsincurrence of Indebtedness, the aggregate Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09)was incurred, in each the case determined at of term debt, or first committed, in the time case of incurrence and (B) revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, Refinance, renew or defease other Indebtedness denominated in a term loan that is not subordinated foreign currency, and such extension, replacement, refunding, Refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in right of payment to the Loan Documents and that is secured by a Lien effect on the Collateral that ranks pari passu in right date of security with the Term Loanssuch extension, the Term Loans replacement, refunding, Refinancing, renewal or defeasance, such Dollar-denominated restriction shall be subject deemed not to have been exceeded so long as the “most favored nation” pricing adjustment (if applicable) set forth in principal amount of such Refinancing Indebtedness does not exceed the proviso to Section 2.14(e)(iii) as if principal amount of such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of being extended, replaced, refunded, Refinanced, renewed or defeased, plus the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum aggregate amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtednessfees, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all underwriting discounts, premiums (if any), interest including tender premiums) and other costs and expenses (including OID) incurred in connection with such Refinancing. Interest (including post-petition interest), the accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and premiums (if any), fees, expenses, charges and additional or contingent interest on obligations shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in Sections 7.03(a) through 7.03(w7.03(dd);, the Borrower shall, in its sole discretion, divide or classify or later divide or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents on the Closing Date will be deemed to be incurred in reliance on the exception in Section 7.03(a).
Appears in 1 contract
Sources: Credit Agreement (AEVEX Corp.)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any Permitted Refinancing thereofrefinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any amount in excess of $5,000,000 owed by a Restricted Subsidiary that is not a Loan Party (including a Specified Property Owning Entity) to a Loan Party shall be evidenced by an Intercompany Note and (y) all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the an Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no in the case of any Guarantee by of Indebtedness of any Restricted Subsidiary of that is not a Loan Party by any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be Loan Party, such Guarantee is permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, under Section 7.02 and (B) 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 (as reasonably determined by the Borrower) to the Lenders Lender as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party the Borrower or any Restricted Subsidiary of a Loan PartySubsidiary; provided that (A) but only, in the case of any Indebtedness of any Restricted Subsidiary that is not a non-Loan Party owing to a any Loan Party, to the extent constituting an Investment such Indebtedness is permitted by under Section 7.02(c)(iii)7.02; provided that any amount in excess of $5,000,000 owed by a Restricted Subsidiary that is not a Loan Party (xincluding a Specified Property Owning Entity) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement an Intercompany Note and (yB) all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured evidenced by an Intercompany Note and shall be subordinated in right of payment to the Obligations pursuant Loans (for the avoidance of doubt, any such Indebtedness owing to subordination terms substantially consistent with a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms of the Intercompany Notesuch Indebtedness expressly provide otherwise);
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)asset, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(mand (iii) and any Permitted Refinancing of such Attributable Indebtednessany of the foregoing, in an aggregate principal amount of Indebtedness at any time outstanding under this Section 7.03(e) not to exceed the greater of (x) $125,000,000 and (y) an amount of Indebtedness that would result in an Incremental Loan-to-Value Ratio of the Borrower and the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to the date of determination equal to 2.0%, in each case determined at the time of incurrence;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, so long as such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or Acquisition, and any Permitted Refinancing thereof or (ii) thereof; provided that immediately after giving Pro Forma Effect pro forma effect to such Permitted Acquisition and the incurrence assumption of such Indebtedness, as applicable(i) if Secured Indebtedness, the aggregate amount Senior Loan-to-Value Ratio as of the last day of the most recently ended Test Period on or prior to the date of determination is no greater than 45.0% and (ii) either (x) the Interest Coverage Ratio of the Borrower and the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to the date of determination would be greater than immediately prior to such transactions or (y) after incurring at least $1.00 of additional Indebtedness the Interest Coverage Ratio of the Borrower and the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to the date of determination would be equal to or greater than 2.0 to 1.0; provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party under this Section 7.03(g), together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q) or 7.03(w), does not exceed in the aggregate an Incremental Loan-to-Value Ratio of the Borrower and the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to the date of determination equal to 2.0% at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries Subsidiary under the Senior Notes Indenture and the New Senior Notes Indenture in an aggregate principal amount not to current or former officers, managers, consultants, directors exceed $1,300,000,000 and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06Permitted Refinancing thereof;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment expressly permitted hereunder;
(l) Cash Management Obligations obligations in respect of treasury services agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements arrangements, in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(m) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount that at the any time of, and after giving effect to, the incurrence thereof, would outstanding not to exceed the greater of (x) $22,750,000 250,000,000 and 35% (y) an amount of Consolidated EBITDAIndebtedness that would result in an Incremental Loan-to-Value Ratio of the Borrower and the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to the date of determination equal to 4.0%;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder unsecured Indebtedness in an aggregate principal amount, not to exceed when aggregated with the Initial Loans and with the amount of Incremental Loans pursuant to Section 2.14(d)(v)), the greater of (A) $300,000,000 and (B) an unlimited amount so long as the Incremental Loan-to-Value Ratio, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period, as if any Incremental Loans available under such Incremental Commitments had been outstanding on the last day of such period, and, in each case, without netting the cash proceeds of any such Incremental Loans, does not exceed 5.0%;; provided (A) no such Indebtedness may be guaranteed by any Person which is not a Loan Party and (B) have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) (provided that a certificate of the Borrower as to the satisfaction of the conditions described in this clause (B) delivered at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (B), shall be conclusive unless the Lender notifies the Borrower within such five Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)); provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party under this Section 7.03(q), together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g) or 7.03(w), does not exceed in the aggregate an Incremental Loan-to-Value Ratio of the Borrower and the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to the date of determination equal to 2.0% at any time outstanding not to exceed $5,000,000determined at the time of incurrence;
(r) Indebtedness supported by a Letter letter of Creditcredit, in a principal amount not to exceed the face amount of such Letter letter of Creditcredit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) Permitted Ratio Debt and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrenceany Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) without duplication, Indebtedness incurred in reliance on pursuant to the Cumulative CreditSenior REIT Loan Documents;
(v) Indebtedness of Foreign Subsidiaries in an aggregate principal amount at any one time outstanding not to exceed an amount of Indebtedness that would result in an Incremental Loan-to-Value Ratio of the Borrower and the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to the date of determination equal to 1.0% as of any date of incurrence;
(w) unsecured Indebtedness of the Borrower or any Restricted Subsidiary, so long as the Interest Coverage Ratio on a consolidated basis for the Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such Indebtedness had been incurred and the application of proceeds therefrom had occurred at the beginning of such four-quarter period and, without duplication, Permitted Refinancings of such Indebtedness; provided that such Indebtedness (i) shall have a maturity date that is at least 91 days after the Latest Maturity Date at the time such Indebtedness is incurred, (ii) shall have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities, (iii) shall not be subject to scheduled amortization and is not subject to mandatory redemption, repurchase, prepayment or sinking fund obligations (except customary asset sale or change of control provisions that provide for the prior repayment in full of the Loans and all other Obligations), in each case on or prior to the Latest Maturity Date at the time such Indebtedness is incurred, (iv) such Indebtedness may not be guaranteed by any Person which is not a Loan Party and (v) shall have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) (provided that a certificate of the Borrower as to the satisfaction of the conditions described in this clause (iv) delivered at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (iv), shall be conclusive unless the Lender notifies the Borrower within such five Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)); provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party under this Section 7.03(w), together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g) or 7.03(q) does not exceed in the aggregate an Incremental Loan-to-Value Ratio of the Borrower and the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to the date of determination equal to 2.0% at any time outstanding determined at the time of incurrence;
(x) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a)to current or former officers, (c) managers, consultants, directors and (d) (as applicable) of the Applicable Requirementsemployees, so long as no Default their respective estates, spouses or Event of Default (limited in connection with Indebtedness incurred former spouses to finance a Limited Condition Transaction, to Defaults the purchase or Events redemption of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA Equity Interests of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes or any direct or indirect parent of the calculations in this Borrower permitted by Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v7.06(g);
(xy) without duplication, “Permitted Ratio Debt” and any “Permitted Refinancing” thereof (each as defined in the Senior REIT Credit Agreement);
(z) without duplication, “Credit Agreement Refinancing Indebtedness” (as defined in the Senior REIT Credit Agreement);
(aa) without duplication, amounts incurred under Sections 2.14 and 7.03(q) of the Senior REIT Credit Agreement; and
(bb) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w7.03(z) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in Sections 7.03(a) through 7.03(x) above, the Borrower shall, in its sole discretion, classify or later divide or classify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will at all times be deemed to be outstanding in reliance only on the exception in Section 7.03(a);.
Appears in 1 contract
Indebtedness. Create, Each Borrower and Guarantor shall not incur, assume create, assume, become or suffer be liable in any manner with respect to, or permit to exist exist, any Indebtedness, exceptexcept for:
(i) the Obligations;
(ii) purchase money Indebtedness (including Capital Leases) arising after the date hereof to the extent secured by purchase money security interests in Equipment (including Capital Leases) and purchase money mortgages on real estate not to exceed $500,000 in the aggregate at any time outstanding so long as such security interests and mortgages do not apply to any property of such Person other than the Equipment or real estate so acquired, and the Indebtedness secured thereby does not exceed the cost of the Equipment or real estate so acquired, as the case may be;
(iii) unsecured Indebtedness of a Borrower to any other Borrower arising after the date hereof pursuant to loans by such Borrower to such other Borrower to the extent permitted under Section 5(j)(iv) hereof;
(iv) unsecured Indebtedness of a Borrower to any Guarantor arising after the date hereof pursuant to loans by such Guarantor to such Borrower to the extent permitted under Section 5(j)(v) hereof;
(v) unsecured Indebtedness of a Guarantor or a Subsidiary of any Guarantor or any Borrower (other than a Borrower) to any Borrower arising after the date hereof pursuant to loans by such Borrower to such Guarantor or a Subsidiary of such Guarantor to the extent permitted under Section 5(j)(vi) hereof,
(vi) Indebtedness of any Subsidiary of Guarantor, other than Borrowers and Guarantor, PROVIDED, THAT, (i) as to any such Indebtedness, Borrowers and Guarantor shall not be directly or indirectly liable (by virtue of such Borrower or Guarantor being the primary obligor on, guarantor of, or otherwise liable in any respect of such Indebtedness), and (ii) the occurrence of a default with respect thereto shall not result in, or permit any holder of any Indebtedness of any Borrower or Guarantor to declare a default on Indebtedness of any Borrower or Guarantor or cause the payment thereof to be accelerated or payable prior to its stated maturity;
(vii) Indebtedness of Borrowers, Guarantor or any of their respective Subsidiaries under swap agreements, cap agreements, collar agreements, exchange agreements, futures or forward hedging contracts or similar contractual arrangements intended to protect a Person against fluctuations in interest rates, currency exchange rates or the price of raw materials used or produced in the business of any Borrower; PROVIDED, THAT, such arrangements are with banks or other financial institutions that have combined capital and surplus and undivided profits of not less than US$250,000,000 and are not for speculative purposes and such Indebtedness shall be unsecured;
(viii) Indebtedness of Borrowers to Congress Financial Corporation ("Revolving Loan Lender") evidenced by or arising under the Revolving Loan Lender Agreements (as in effect on the date hereof), PROVIDED, THAT:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15);
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an $20,000,000, less the aggregate amount so long as of all repayments, repurchases or redemptions thereof, whether optional or mandatory, plus interest thereon at the applicable rates provided in the Revolving Loan Lender agreements in effect on and the date hereof,
(b) as of the date hereof, no default or event of default, or event which with notice or passage of time or both would constitute an event of default exists or has occurred under any of the Revolving Loan Lender agreements;
(c) Borrowers and Guarantor shall not, directly or indirectly, make, or be required to make, any payments in respect of such incurrence Indebtedness, EXCEPT, THAT, Borrowers may make regularly scheduled payments of principal, interest and fees, on an unaccelerated basis, in respect of such Indebtedness in accordance with the Consolidated First Lien Net Leverage Ratio terms of the Revolving Loan Lender agreements as in effect on the date hereof;
(determined d) Borrowers and Guarantor shall not, directly or indirectly, amend, modify, alter or change any of the material terms of such Indebtedness or any of the Revolving Loan Lender agreements as in effect on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds date hereof, EXCEPT, THAT, Borrowers may, after prior written notice to Lender, amend, modify, alter or change the terms thereof so as to extend the maturity thereof or defer the timing of any borrowing under payments in respect thereof, or to forgive or cancel any portion of such revolving credit facilityIndebtedness other than pursuant to payments thereof, or to reduce the interest rate or any fees in connection therewith, or to make the provisions thereof less restrictive or burdensome than the terms or conditions of the Revolving Loan Lender agreements as in effect on the date hereof; and
(e) is no more than Borrowers shall furnish to Lender all notices or equal to (x) 3.75:1.00 or (y) to the extent incurred demands in connection with a Permitted Acquisition such Indebtedness either received by any Borrower or other Investment permitted hereunderGuarantor or on its behalf promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf concurrently with the greater of (I) 3.75:1.00 and (II) sending thereof, as the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrencecase may be;
(iiix) if such Indebtedness is secured of Borrowers and Guarantor to SouthTrust Bank evidenced by or arising under the SouthTrust Bank agreements (as in effect on a junior basis in right of security with the Obligationsdate hereof), PROVIDED, THAT:
(a) the aggregate principal amount of such Indebtedness shall not exceed an $1,885,000.00, less the aggregate amount so long as of all repayments, repurchases or redemptions thereof, whether optional or mandatory, plus interest thereon at the applicable rates provided in the SouthTrust Bank agreements in effect on and the date hereof,
(b) as of the date hereof, no default or event of default, or event which with notice or passage of time or both would constitute an event of default exists or has occurred under any of the SouthTrust Bank agreements;
(c) Borrowers and Guarantor shall not, directly or indirectly, make, or be required to make, any payments in respect of such incurrence Indebtedness, EXCEPT, THAT, Borrowers may make regularly scheduled payments of principal, interest and fees, on an unaccelerated basis, in respect of such Indebtedness in accordance with the Consolidated Secured Net Leverage Ratio terms of the SouthTrust Bank agreements as in effect on the date hereof;
(determined d) Borrowers and Guarantor shall not, directly or indirectly, amend, modify, alter or change any of the material terms of such Indebtedness or any of the SouthTrust Bank agreements as in effect on a Pro Forma Basisthe date hereof, EXCEPT, THAT, Borrowers may, after prior written notice to Lender, amend, modify, alter or change the terms thereof so as to extend the maturity thereof or defer the timing of any payments in respect thereof, or to forgive or cancel any portion of such Indebtedness other than pursuant to payments thereof, or to reduce the interest rate or any fees in connection therewith, or to make the provisions thereof less restrictive or burdensome than the terms or conditions of the SouthTrust Bank agreements as in effect on the date hereof; and
(e) is no more than Borrowers shall furnish to Lender all notices or demands in connection with such Indebtedness either received by any Borrower or Guarantor or on its behalf promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf concurrently with the sending thereof, as the case may be;
(x) 4.00:1.00 Indebtedness of Borrowers or Guarantor evidenced by or arising under the Subordinated Notes (y) to as in effect on the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunderdate hereof), the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;PROVIDED, THAT:
(iiia) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an $200,000.00, less the aggregate amount so long as of all repayments, repurchases or redemptions thereof, whether optional or mandatory, plus interest thereon at the applicable rates provided in the Subordinated Notes in effect on and the date hereof,
(b) as of the date hereof, no default or event of default, or event which with notice or passage of time or both would constitute an event of default exists or has occurred under any of the Subordinated Notes;
(c) such Indebtedness is and shall remain unsecured;
(d) such Indebtedness is, in all respects, subject to, and subordinate in right of payment to, the right of Lender to receive the prior indefeasible payment and satisfaction in full of all of the Obligations;
(e) Borrowers shall not, directly or indirectly, make, or be required to make, any payments in respect of such incurrence Indebtedness;
(xf) Borrowers shall not, directly or indirectly, (A) amend, modify, alter or change any of the material terms of such Indebtedness or any of the Subordinated Notes as in effect on the date hereof, EXCEPT, THAT, Borrowers may, after prior written notice to Lender, amend, modify, alter or change the terms thereof so as to extend the maturity thereof or defer the timing of any payments in respect thereof, or to forgive or cancel any portion of such Indebtedness other than pursuant to payments thereof, or to reduce the interest rate or any fees in connection therewith, or to make the provisions thereof less restrictive or burdensome than the terms or conditions of the Subordinated Notes as in effect on the date hereof, or (B) make optional prepayments of principal or redeem, retire, defease, purchase or otherwise acquire such Indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, and
(g) Borrowers shall furnish to Lender all notices or demands in connection with such Indebtedness either received by any Borrower or Guarantor or on its behalf promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf concurrently with the sending thereof, as the case may be; and
(xi) the Consolidated Total Net Leverage Ratio unsecured Indebtedness of Borrowers, Guarantor and their Subsidiaries set forth on Schedule 5(xi) hereto; PROVIDED, THAT, (determined i) the Borrower, Guarantor or Subsidiary obligated on such Indebtedness may only make regularly scheduled or other mandatory payments of principal and interest in respect of such Indebtedness in accordance with the terms of the agreement or instrument evidencing or giving rise to such Indebtedness as in effect on the date hereof, (ii) Borrowers, Guarantor and Subsidiaries shall not, directly or indirectly, (A) amend, modify, alter or change the terms of such Indebtedness or any agreement, document or instrument related thereto as in effect on the date hereof EXCEPT, THAT, Borrowers may, after prior written notice to Lender, amend, modify, alter or change the terms thereof so as to extend the maturity thereof, or defer the timing of any payments in respect thereof, or to forgive or cancel any portion of such Indebtedness (other than pursuant to payments thereof), or to reduce the interest rate or any fees in connection therewith, or (B) redeem, retire, defease, purchase or otherwise acquire such Indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, and (iii) Borrowers and Guarantor shall furnish to Lender all notices or demands in connection with such Indebtedness either received by a Pro Forma BasisBorrower or Guarantor or on its behalf, promptly after the receipt thereof, or sent by a Borrower or Guarantor or on its behalf, concurrently with the sending thereof, as the case may be.
(xii) is no more than the Indebtedness set forth on Schedule 5(h)(ix) attached hereto; provided, that, (i) Borrowers may only make regularly scheduled payments of principal and interest in respect of such Indebtedness in accordance with the terms of the agreement or instrument evidencing or giving rise to such Indebtedness as in effect on the date hereof, (ii) Borrowers shall not, directly or indirectly, (A) amend, modify, alter or change the terms of such Indebtedness or any agreement, document or instrument related thereto as in effect on the date hereof except, that, Borrowers may, after prior written notice to Lender, amend, modify, alter or change the terms thereof so as to (1) 4.25:1.00 extend the maturity thereof, or (2) defer the timing of any payments in respect thereof, or to forgive or cancel any portion of such Indebtedness (other than pursuant to payments thereof), or (3) reduce the extent incurred interest rate or any fees in connection therewith, (4) make any covenants contained therein less restrictive or burdensome as to such Borrower, or (B) redeem, retire, defease, purchase or otherwise acquire such Indebtedness, or set aside or otherwise deposit or invest any sums for such purpose (except with the proceeds of Refinancing Indebtedness with respect thereto), and (iii) Borrowers shall furnish to Lender all material notices or demands in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness either received by Borrower or on its behalf, promptly after the receipt thereof, or sent by such Borrower or on its behalf, concurrently with the sending thereof, as the case may be; and
(xiii) Indebtedness of any Borrower, Guarantor or its Subsidiaries that are non-Loan Parties incurred arising pursuant to this loans permitted under Section 7.03(v5(j) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtednesshereof.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Sources: Loan Agreement (JLM Industries Inc)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, exceptother than:
(a) Indebtedness of any Loan Party the Parent Borrower and the Restricted Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(bi) Indebtedness existing on the Specified Date; provided that any Indebtedness (other than Indebtedness refinanced on the Original Closing Date in connection with the Original Transactions) that is in excess of (x) $5,000,000 individually or (y) $10,000,000 in the aggregate (when taken together with all other Indebtedness outstanding in reliance on this clause (b) that is not set forth on Schedule 7.03(b)) shall only be permitted under this clause (b) to the Closing Date and listed extent that such Indebtedness is set forth on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Original Closing Date hereof and any Permitted Refinancing thereof; provided that any all such intercompany Indebtedness (other than the Parent Borrower Obligor Cash Management Note) of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an intercompany note reasonably satisfactory to the Intercompany NoteAdministrative Agent;
(c) Guarantees by the Parent Borrower and or any of its Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee Guaranty of the Obligations substantially on the terms set forth herein, in the Guaranty and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee Guaranty shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and Indebtedness; provided that, in any event, any Guaranty of the New Senior Notes or Permitted Additional Notes shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the New Senior Notes Indenture on the Original Closing Date;
(Cd) any Guarantee by a Loan Party of Indebtedness of a the Parent Borrower or any of its Restricted Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party (other than the Parent Borrower Obligor Cash Management Note) shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with an intercompany note reasonably satisfactory to the terms of the Intercompany NoteAdministrative Agent;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and construction, repair, replacement or improvement, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(mtransactions, and (iii) Indebtedness arising under Capitalized Leases other than those in effect on the Specified Date or entered into pursuant to subclauses (i) and (ii) of this clause (e) and, in the case of clauses (i), (ii) and (iii), any Permitted Refinancing thereof; provided that not more than $150,000,000 in aggregate principal amount of such Attributable IndebtednessIndebtedness incurred pursuant to this paragraph (e) shall be outstanding at any time;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) [Reserved];
(h) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; Acquisition: provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such acquisition, and any Permitted Acquisition or other Investment or Refinancing of any of the foregoing and so long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding pursuant to this paragraph (h) does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00250,000,000, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(hi) [Reserved];
(j) Indebtedness representing deferred compensation to employees of Holdings the Parent Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(ik) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses Controlled Investment Affiliates or former spouses Immediate Family Members to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.06;
(jl) Indebtedness incurred by Holdings arising from agreements of the Parent Borrower or any a Restricted Subsidiary providing for indemnification, adjustment of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger purchase price or any Disposition permitted hereundersimilar obligations, in each case, constituting indemnification incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business or assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that such Indebtedness is not reflected on the balance sheet (other than by application of FASB Interpretation No. 45 as a result of an amendment to an obligation in existence on the Original Closing Date) of the Parent Borrower or any Restricted Subsidiary (contingent obligations or obligations referred to in respect a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of purchase price this clause (including earn-outs) or other similar adjustmentsl));
(km) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder[Reserved];
(ln) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(mo) Indebtedness in an aggregate principal amount that at the any time of, and after giving effect to, the incurrence thereof, would outstanding not to exceed the greater of $22,750,000 and 35% of Consolidated EBITDA1,000,000,000;
(np) 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;
(oq) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of businessbusiness or consistent with past practice, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pr) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(vi) Indebtedness of the Borrower or any of CCOH and its Restricted Subsidiaries Subsidiaries, the proceeds of which are solely used to refinance the CCU Term Note; provided that the Net Cash Proceeds from such repayment is a Loan Party that complies with clauses (a)applied to prepay the CF Facilities to the extent required by the CF Credit Agreement, (cii) and Indebtedness (d) including Acquired Indebtedness (as applicabledefined in the CCOH Indentures as in effect on the Amendment No. 3 Effectiveness Date)) of the Applicable RequirementsCCOH and its Restricted Subsidiaries; provided that (A) immediately prior and after giving effect thereto, so long as no Default or Event of Default shall have occurred and is continuing, (limited B) immediately after giving effect thereto, the Consolidated Leverage Ratio (as defined in connection the CCOH Indentures as in effect on the Amendment No. 3 Effectiveness Date) of CCOH is no greater than 7.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred and the application of proceeds therefrom had occurred at the beginning of the most recently ended four fiscal quarters for which internal financial statements are available and (C) within five (5) Business Days after the receipt of the Net Cash Proceeds of such Indebtedness, (1) CCOH shall have (x) declared and paid to the holders of its common stock a pro rata dividend in an aggregate amount equal to 100% of such Net Cash Proceeds or (y) made an intercompany subordinated loan (with Indebtedness incurred customary subordination provisions reasonably acceptable to finance the Administrative Agent) to the Parent Borrower in an aggregate amount equal to the amount that would have been paid to the Parent Borrower if a Limited Condition Transactiondividend had been declared and paid in accordance with clause (x) above, and (2) the Parent Borrower shall have made a prepayment of the CF Facilities to Defaults or Events of Default under Sections 8.01(athe extent required by the CF Credit Agreement (as in effect on the Amendment No. 3 Effectiveness Date) and (fiii) any Permitted Refinancing of the foregoing; provided that no Loan Party (as defined in the CF Credit Agreement) is an obligor under any such Permitted Refinancing;
(t) Indebtedness under the CF Facilities and Permitted Alternative Incremental Facilities Indebtedness and any other Default or Event Permitted Refinancings thereof in an aggregate principal amount not to exceed at the time of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if any such Indebtedness is secured on a pari passu in right the sum of security with the Obligations, (a) the aggregate principal amount of the commitments under the CF Facilities on the Original Closing Date plus (b) the maximum aggregate amount of Incremental Term Loans and Revolving Commitment Increases (each as defined under the CF Credit Agreement) and Permitted Alternative Incremental Facilities Indebtedness that would be permitted to be incurred at such Indebtedness shall not exceed an amount so long time under the CF Credit Agreement (as such agreement is in effect on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and Amendment No. 3 Effectiveness Date) assuming that all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) conditions precedent to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) thereof set forth in the proviso to Section 2.14(e)(iiiCF Credit Agreement have been satisfied;
(i) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes and Guarantees by Guarantors in respect of the calculations New Senior Notes in this Section 7.03(v), (A) with respect an aggregate principal amount not to any Revolving Credit Commitments, a borrowing of exceed $2,310,000,000 plus the maximum amount of Loans available thereunder shall be assumed PIK Interest Amount and (Bii) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(vPermitted Refinancing thereof;
(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.[Reserved];
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w(u) above and (x) through (aa) below;
(x) Guarantees incurred in the ordinary course of business in respect of obligations not constituting Indebtedness to suppliers, customers, franchisees, lessors and licensees;
(y) Indebtedness incurred in the ordinary course of business in respect of obligations of the Parent Borrower or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services;
(z) Indebtedness in respect of (i) Permitted Additional Notes provided the Net Cash Proceeds therefrom are immediately after the receipt thereof, used to prepay the CF Facilities to the extent required by the CF Credit Agreement and (ii) any Permitted Refinancing of the foregoing;
(aa) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(bb) Indebtedness consisting of obligations of the Parent Borrower and its Restricted Subsidiaries under deferred compensation to employees or other similar arrangements incurred by such Person in connection with the Transactions, any Permitted Acquisition or any other Investment expressly permitted hereunder;
(cc) Indebtedness incurred by a Securitization Entity in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to Holdings or any of its Subsidiaries or the Parent Borrower or any of its Subsidiaries (other than another Securitization Entity);; and
(dd) Indebtedness of any Non-Loan Party that is a Restricted Subsidiary in an amount not to exceed $400,000,000 at any one time outstanding. Notwithstanding the foregoing, no Restricted Subsidiary that is not a Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Subsidiary Guarantor. In addition, notwithstanding the foregoing, (i) Restricted Subsidiaries that are not Loan Parties may not incur Indebtedness pursuant to, without duplication, clauses (h) and (o) of this Section in an aggregate combined principal amount at any time outstanding in excess of $500,000,000 in each case determined at the time of incurrence and (ii) until the Existing Notes Condition shall have been satisfied, (A) the Parent Borrower shall not, and shall not permit any Restricted Subsidiary to, create, incur, assume or suffer to exist any Guarantee of the Retained Existing Notes and (B) all Indebtedness owed to the Parent Borrower by any Subsidiary Guarantor (other than the Parent Borrower Obligor Cash Management Note) shall be unsecured and subordinated to the Obligations pursuant to an intercompany note reasonably satisfactory to the Administrative Agent. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased plus the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Parent Borrower dated such date prepared in accordance with GAAP.
Appears in 1 contract
Sources: Credit Agreement (Clear Channel Communications Inc)
Indebtedness. CreateParent, Holdings and the Borrowers shall not, nor shall they permit any other Restricted Subsidiary to, directly or indirectly, create, incur, assume or issue, assume, suffer to exist exist, guarantee or otherwise become directly or indirectly liable for, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) any Indebtedness (including Acquired Indebtedness); provided however, except:that the Borrowers (but, for the avoidance of doubt, not any other Restricted Subsidiaries) may incur Indebtedness (including Acquired Indebtedness) (and the Loan Parties may guarantee such Indebtedness) that is either (x) unsecured or (y) secured on the Collateral by Liens ranking junior in Lien priority to the Liens securing the Obligations, in each case if either (1) in the case of any such Indebtedness that is unsecured, the Total Net Leverage Ratio, on a Pro Forma Basis does not exceed 3.50:1.00, or (2) in the case of any such Indebtedness that is secured on the Collateral by Liens ranking junior in Lien priority to the Liens securing the Obligations, the Senior Secured Net Leverage Ratio, on a Pro Forma Basis, does not exceed 2.50:1.00 (“Ratio Debt”), provided that any Ratio Debt (A) shall be subject to the Intercreditor Agreement at all times, (B) shall be subject to Section 2.14(d)(ii)(D) of this Agreement on the same basis as a “New Term Facility” as set forth therein, (C) be subject to Section 2.14(d)(iv) of this Agreement on the same basis as a “New Term Facility” as set forth therein, (D) shall rank pari passu in right of payment with, or be subordinated in right of payment to, the Term Facilities, not be Guaranteed by any Person that is not a Borrower or Guarantor under the Term Facilities, (E) shall be subject to Section 2.14(f)(iii) of this Agreement on the same basis as a “New Term Facility” as set forth therein and (F) to the extent secured, such Ratio Debt shall be secured only pursuant to clause (24) of the definition of “Permitted Liens”. The foregoing limitations will not apply to (collectively, “Permitted Debt”):
(a) (x) Indebtedness of any Loan Party arising under the Loan Documents (including any refinancing thereof in accordance with Section 2.18, (y) Indebtedness incurred pursuant to Section 2.14 of the Loan Parties evidenced by Refinancing Notes and any Permitted Refinancing thereof (or 2.15successive Permitted Refinancings thereof) and (z) Indebtedness of the Loan Parties evidenced by Incremental Equivalent Debt and any Permitted Refinancing thereof (or successive Permitted Refinancings thereof);
(b) (x) Indebtedness outstanding on of Loan Parties arising under the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date Sustainable Revolving Credit Facility Agreement and any Permitted Refinancing thereof; provided that (i) the aggregate outstanding principal amount (including in the determination of principal amount outstanding, amounts outstanding in respect of letters of credit, ancillary facilities and any incremental facilities incurred thereunder) of Indebtedness (and commitments therefor) permitted under this IF "1" = "1" "#4875-2924-7575v15" "" #4875-2924-7575v15 AMERICAS 120585256
Section 7.01 (b) shall not exceed (x) SEK 2,100,000,000 plus (y) the greater of (x) $50,000,000 and (y) 50.0% of Four Quarter Consolidated EBITDA at any time, and (ii) such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to the Intercompany NoteIntercreditor Agreement;
(c) Guarantees by the Borrower and any Restricted Subsidiary Indebtedness of Parent in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary Convertible Bonds so long as the Convertible Bonds constitute a Subordinated Financing up to an aggregate outstanding principal amount as of any date not to exceed $300,000,000 plus any capitalized or “paid-in-kind” interest accruing thereon, which Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated subject to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Intercreditor Agreement;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, Parties in the case form of Indebtedness of a nonpost-Loan Party owing closing payment adjustments, earn out, contingent payment or similar obligations to a Loan Party, which the seller may become entitled to the extent constituting an Investment permitted such payment is determined by Section 7.02(c)(iii)a final closing balance sheet or such payment depends on the performance of such business after the closing or is otherwise contingent on the happening (or not happening) of a certain event or events; provided that that, the aggregate amount of Indebtedness permitted under this Section 7.01(d), together with the aggregate amount of Indebtedness permitted under Section 7.01(h) shall not exceed the sum of (x) no $10,000,000 in any fiscal year and (ii) $20,000,000 in the aggregate during the term of this Agreement, unless such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note (1) is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations Term Facility pursuant to subordination the Intercreditor Agreement on terms substantially consistent with satisfactory to the terms of Required Lenders and (2) does not require cash payments, or have a maturity date occurring, prior to the Intercompany Notedate that is one hundred and eighty one (181) days after the Latest Maturity Date;
(e) Indebtedness of the Borrowers and the Restricted Subsidiaries of Parent existing on the Closing Date and set forth in Schedule 7.01 (iother than Indebtedness described in clause (a) Attributable Indebtedness and other above);
(f) Indebtedness (including including, without limitation, Capitalized LeasesLease Obligations and mortgage financings as purchase money obligations) financing an acquisitionunder this clause (f) incurred by the Borrowers or any of the Restricted Subsidiaries of Parent to finance all or any part of the purchase, lease, construction, repairinstallation, replacement, lease repair or improvement of a property (real or personal), plant or equipment or other fixed or capital asset incurred by assets (whether through the Borrower direct purchase of assets or the Equity Interests of any Person owning such assets) and Indebtedness arising from the conversion of the obligations of the Borrowers or any Restricted Subsidiary prior under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Parent, any Borrower or within 270 days after the acquisitionsuch Restricted Subsidiary, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate outstanding principal amount or liquidation preference, including all Indebtedness incurred and outstanding to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (f), not to exceed the greater of (x) $13,000,000 5,000,000 and 20(y) 20.0% of Four Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)then outstanding, in each case determined at the time of incurrence (together with or issuance thereof, plus, in the case of any Permitted Refinancings thereof) at refinancing of any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
under this clause (f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest ratesportion thereof, foreign exchange rates or commodities pricing risks the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any connection with such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)refinancing;
(g) Indebtedness of incurred by the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings Borrowers or any of its the Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting Parent constituting reimbursement obligations with respect to letters of promissory notes issued by Holdings credit or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) bank guarantees or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management documentary credits and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds instruments issued in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time ofincluding, and after giving effect towithout limitation, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (i) the financing letters of insurance premiums credit or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower performance or any of its Restricted Subsidiaries surety bonds in respect of letters of credit, bank guarantees, bankersworkers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers workers’ compensation claims;
, health, disability or other employee benefits (pwhether current or former) obligations or property, casualty or liability insurance and (ii) guarantees of Indebtedness incurred by customers in respect connection with the purchase or other acquisition of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower equipment or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case supplies in the ordinary course of business or consistent with past practicebusiness;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(rh) Indebtedness supported by a Letter arising from agreements of Creditthe Borrowers or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price or similar obligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets or a principal amount not to exceed the face amount Subsidiary of such Letter Parent in accordance with IF "1" = "1" "#4875-2924-7575v15" "" #4875-2924-7575v15 AMERICAS 120585256 this Agreement, other than guarantees of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of any Person acquiring all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence portion of such Indebtednessbusiness, assets or Subsidiary for the purpose of financing such acquisition; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities permitted under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder7.01(h), the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security together with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this under Section 7.03(v7.01(d) shall not exceed the greater sum of (x) $9,750,000 10,000,000 in any fiscal year and (yii) 15% $20,000,000 in the aggregate during the term of Consolidated EBITDA this Agreement, unless such Indebtedness (1) is subordinated to the Term Facility pursuant to the Intercreditor Agreement on terms satisfactory to the Required Lenders and (2) does not require cash payments, or have a maturity date occurring, prior to the date that is one hundred and eighty one (181) days after the Latest Maturity Date;
(i) Indebtedness of the Borrower Borrowers to a Restricted Subsidiary; provided that any such Indebtedness shall be permitted pursuant to this clause (determined on i) only if it is subject to the Intercreditor Agreement if so required by the terms of the Intercreditor Agreement;
(j) shares of Preferred Stock of a Pro Forma Basis Restricted Subsidiary issued to the Borrowers or another Loan Party; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in accordance with Section 1.09)any Loan Party that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Loan Party or any other subsequent transfer of any such shares of Preferred Stock (except to the Borrowers or another Loan Party) shall be deemed, in each case determined at the time case, to be an issuance of incurrence and shares of Preferred Stock not permitted by this clause (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(vj);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Sources: Credit Agreement (Oatly Group AB)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower and any Loan Party of its Subsidiaries under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding on the Closing Date date hereof and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Notedate hereof;
(c) Guarantees by the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunderhereunder (except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise incur under this Section 7.03); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing High Yield Note, Subordinated Lien Facility or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth herein, in the Guaranty and (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with the terms set forth in Section 5.03 of the Intercompany NoteSecurity Agreement;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)acquisition, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and construction, repair, replacement or improvement, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m7.05(f) and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate amount of such Attributable IndebtednessIndebtedness incurred pursuant to this clause (e) and outstanding at any one time shall not exceed the greater of $100,000,000 and 2.5% of Total Assets;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition, provided that (x) such Indebtedness (i) was not incurred in contemplation of such Permitted Acquisition, (ii) is secured only by the assets acquired in the applicable Permitted Acquisition (including any acquired Equity Interests), (iii) the only obligors with respect to any Indebtedness incurred pursuant to this clause (g) shall be those Persons who were obligors of such Indebtedness prior to such Permitted Acquisition, and (y) both immediately prior and after giving effect thereto no Default shall exist or other Investment not prohibited hereunderresult therefrom;
(i) Indebtedness (A) assumed in connection with any Permitted Acquisition; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) of the Borrower or any Restricted Subsidiary incurred to finance a Permitted Acquisition or other Investment or and (ii) any Permitted Refinancing of the foregoing; provided, that in the case of each of (i) and (ii) above, such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (w) is unsecured or is subordinated to the Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Notes Indenture as of the Closing Date, (iix) both immediately prior and after giving Pro Forma Effect effect thereto, no Default shall exist or result therefrom, (y) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the Maturity Date of the Term Loans (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemptions provisions satisfying the requirement of clause (z) hereof) and (z) has terms and conditions (other than interest rate and redemption premiums), taken as a whole, that are not materially less favorable to such Permitted Acquisition the Borrower as the terms and conditions of the Senior Subordinated Notes as of the Closing Date; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, as applicable, together with a reasonably detailed description of the aggregate amount material terms and conditions of such Indebtedness at any time outstanding does not exceed or drafts of the sum documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrower within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees); and provided further that notwithstanding anything contained in the Loan Documents to the contrary, (xa) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance only obligors with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of respect to any Indebtedness incurred pursuant to clause (ii), (A) such of this paragraph or any Permitted Refinancing of Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard respect thereof shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding those Persons who were obligors of such Indebtedness of immediately prior to such Permitted Acquisition and (b) Restricted Subsidiaries that are nonNon-Loan Parties incurred may not incur Indebtedness pursuant to this Section 7.03(gclause (h) shall not exceed the greater in an aggregate outstanding amount in excess of (x) $9,750,000 and (y) 155% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma BasisForeign Subsidiary Total Assets;
(hi) Indebtedness representing deferred compensation to employees of Holdings the Borrower (or any direct or indirect parent of its the Borrower) and the Restricted Subsidiaries incurred in the ordinary course of business;
(ij) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.06;
(jk) Indebtedness incurred by Holdings the Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kl) Indebtedness consisting of obligations of Holdings the Borrower or any of its the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lm) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(mn) Indebtedness in an aggregate principal amount not to exceed $250,000,000 at any time outstanding; provided that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater a maximum of $22,750,000 and 35% 100,000,000 in aggregate principal amount of Consolidated EBITDAsuch Indebtedness may be incurred by Non-Loan Parties;
(no) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qr) letters Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to the Borrower or any of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000its Restricted Subsidiaries;
(rs) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(st) Indebtedness in respect of the High Yield Notes and any Permitted Refinancing thereof;
(u) [Intentionally omitted]
(v) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (v) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 100,000,000 and 155% of Consolidated EBITDA Foreign Subsidiary Total Assets;
(determined on i) Indebtedness under a Pro Forma Basis Subordinated Lien Facility in accordance with Section 1.09), in each case determined an aggregate principal amount not to exceed $200,000,000 at any time outstanding; provided that at the time of incurrencethe incurrence of such Indebtedness and after giving Pro Forma Effect thereto, no Default exists or would result therefrom, and (ii) Permitted Refinancings in respect thereof; provided that the amount of Indebtedness incurred pursuant to this clause (w) shall reduce on a dollar-for-dollar basis the Incremental Availability;
(tx) Credit Agreement Refinancing IndebtednessUnsecured Indebtedness of the Borrower or any Restricted Subsidiary; provided that (A) both immediately prior and after giving Pro Forma Effect to such incurrence no Default or Event of Default shall exist or result therefrom and (B) if such Indebtedness is subordinated to the Obligations, it is done so on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Notes Indenture as of the Closing Date;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(vy) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness Subsidiary incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such IndebtednessPermitted Acquisition; provided that:
, both immediately prior to and after giving effect thereto, (i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness no Default shall not exceed an amount so long as on exist or result therefrom and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis the Borrower shall be in right of security compliance with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Senior Secured Net Leverage Ratio Incurrence Test (determined calculated on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;); and
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(xz) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w);(y) above. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that (i) all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred on such date in reliance only on the exception in clause (a) of Section 7.03, and (ii) all Indebtedness outstanding under the High Yield Notes will be deemed to have been incurred on such date in reliance only on the exception of clause (t) of Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a1) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15Incremental Loans and Extended Loans);
(b2) [Reserved];
(3) Credit Agreement Refinancing Indebtedness, Incremental Equivalent Debt and, in each case, any Permitted Refinancing thereof;
(4) (xa) Indebtedness outstanding existing on the Closing Date date hereof and listed set forth on Schedule 7.03(b) 7.03 and any Permitted Refinancing thereof and thereof, (yb) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofDate; provided provided, that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Non-Loan Party shall be subject to the Intercompany Subordination Agreement and (c) Indebtedness consisting of payments required under the Acquisition Agreement;
(5) (a) Guarantees in respect of Indebtedness of the Borrower or any of the Restricted Subsidiaries otherwise permitted hereunder; provided, that
(i) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted under this clause (5)(a) unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty,
(ii) if the Indebtedness being Guaranteed is subordinated in right of payment to the Obligations, such Guarantee shall be subordinated in right of payment to the Guaranty on terms at least as favorable to the Lenders as those contained in the subordination terms with respect to such Indebtedness, and
(iii) a Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms may not, by virtue of the Intercompany Note;
this clause (e) (i) Attributable 5)(a), Guarantee Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any that such Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount would not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only otherwise be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities incur under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder7.03, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);and
Appears in 1 contract
Indebtedness. CreateNo Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer guaranty, or otherwise become or remain directly or indirectly liable with respect to exist any IndebtednessIndebtedness or issue any Preferred Stock, except:
(a) the Obligations, including Indebtedness of under any Loan Party under the Loan Documents (including Hedge Agreement with any Indebtedness incurred pursuant to Section 2.14 or 2.15)Lender Counterparty;
(b) (x) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed Wholly-Owned Included Domestic Subsidiary of Borrower to Borrower or to any Restricted other Wholly-Owned Included Domestic Subsidiary of Borrower, or of Borrower to any Wholly-Owned Included Domestic Subsidiary of Borrower, provided, (i) all such Indebtedness shall be evidenced by promissory notes and all such notes shall be subject to a First Priority Lien pursuant to the Pledge and Security Agreement, (ii all such Indebtedness owed by Borrower to any of its Included Subsidiaries shall be unsecured and subordinated in right of payment to the payment in full of the Obligations pursuant to the terms of the applicable promissory notes or an intercompany subordination agreement that is in any such case, are reasonably satisfactory to Administrative Agent, and (ii all such Indebtedness shall include provisions as to the waiver of any subrogation rights until after the Obligations have been paid in full;
(c) Borrower and its Wholly-Owned Included Domestic Subsidiaries may become and remain liable with respect to Contingent Obligations in respect of any obligations of Borrower or any of its Wholly-Owned Included Domestic Subsidiaries permitted under this Agreement; provided, any such Contingent Obligations shall (i) be unsecured, and (ii) include provisions as to the waiver of any subrogation rights until after the Obligations have been paid in full;
(d) Contingent Obligations of Borrower or any of its Subsidiaries arising from customary agreements providing for indemnification, adjustment of purchase price or similar obligations of any such Person in connection with the Merger Agreement, the Capstar Documentation and Permitted Acquisitions or Asset Sales permitted pursuant to Sections 6.6 and 6.7;
(e) Contingent Obligations under guaranties in the ordinary course of business of the obligations of suppliers, landlords, customers, franchisees and licensees of Borrower and its Subsidiaries in an aggregate amount at any time not a Loan Party to exceed $1,000,000;
(f) Indebtedness of Holdings or Borrower in respect of any Permitted Sponsor Subordinated Debt;
(g) Indebtedness of Holdings and Muzak Holdings Finance in respect of the Holdings Notes, provided, (i) the Net High Yield Proceeds received in connection therewith shall not exceed $40,000,000 and shall be contributed to Borrower as Equity Capital and (ii) such Indebtedness shall (a) be unsecured and on terms and conditions acceptable to Requisite Lenders, (b) mature no earlier than the tenth anniversary of the date of issuance thereof, (c) require by its terms, that all interest on such debt be "paid-in-kind" through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) contain other terms and conditions which shall be satisfactory to Requisite Lenders, and (e) be issued on or before the first anniversary of the Closing Date;
(h) Indebtedness of Borrower and Muzak Finance in respect of the Senior Subordinated Notes in an aggregate principal amount of not less than $115,000,000, provided, such Indebtedness shall (i) be unsecured and subordinated to the Obligations pursuant of Borrower hereunder on terms and conditions acceptable to Requisite Lenders, (ii) mature no earlier than December 31, 2007, (iii) contain other terms and conditions which shall be satisfactory to Requisite Lenders, and (iv) be issued on or before the Intercompany Notefirst anniversary of the Closing Date;
(ci) Guarantees by the Borrower Contingent Obligations of Holdings and any Restricted Subsidiary Borrower's Subsidiaries in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; Senior Subordinated Notes, provided that such Contingent Obligations shall (Ai) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant of such Subsidiaries hereunder on terms and conditions acceptable to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding Requisite Lenders and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) contain other terms and any Permitted Refinancing of such Attributable Indebtednessconditions which shall be satisfactory to Requisite Lenders;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(gj) Indebtedness of Holdings consisting of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; obligation to repurchase membership interests of former officers and directors of Holdings pursuant to the Securities Repurchase Agreements, provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined incurred by Holdings measured on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as cumulative basis from the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) Closing Date shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments2,000,000;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunderDeferred Management Fees, subject to Section 6.4;
(l) Cash Management Obligations additional unsecured Indebtedness of Borrower and other Indebtedness its Subsidiaries in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and an aggregate outstanding principal amount not to exceed $5,000,000 at any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencetime;
(m) Indebtedness in an aggregate principal amount that at the time of, each of Borrower and after giving effect to, the incurrence Holdings may become and remain liable with respect to any Preferred Stock of Borrower and Holdings which by its terms does not require any payment of Cash dividends or interest and does not mature or provide for any repurchase or redemption thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDAin whole or in part, contingent or otherwise, on or prior to December 31, 2007;
(n) Indebtedness consisting of (i) described in Schedule 6.1, and until the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangementsClosing Date, in each case, in the ordinary course of business;Existing Debt; and
(o) additional secured Indebtedness incurred by the of Borrower or any of and its Restricted Subsidiaries in respect of letters of creditSubsidiaries, bank guaranteesincluding, bankers’ acceptanceswithout limitation, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performanceCapital Leases, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount $2,500,000 at any time; provided, however, (i) neither Holdings nor any of such Letter its Subsidiaries shall incur any Contingent Obligations in respect of Credit;
any obligations of any Subsidiary other than an Included Subsidiary and (sii) Indebtedness incurred by a Restricted any Subsidiary that is a non-Loan not an Included Subsidiary may only become and remain liable with respect to Indebtedness if such Indebtedness is without recourse to any other Credit Party whichor their respective assets, when aggregated with and in the principal amount case of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken togetherElectro, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the an aggregate outstanding principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness2,400,000.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Indebtedness. CreateDirectly or indirectly, incur, assume or suffer to exist Incur any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including Acquired Indebtedness) or issue any Indebtedness incurred pursuant to Section 2.14 or 2.15);
(b) (x) Indebtedness outstanding on the Closing Date shares of Disqualified Stock, and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and will not permit any of its Restricted Subsidiary in respect Subsidiaries to issue any shares of Preferred Stock other than Indebtedness (including Acquired Indebtedness), Disqualified Stock or Preferred Stock of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A“Incremental Equivalent Debt”) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of in an amount equal to, without duplication, the Obligations on the terms set forth herein, (B) 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 (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party amount of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only could be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
Incurred under (d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, and in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(elieu of) (i) Attributable Indebtedness and other Indebtedness the Cash-Capped Incremental Facility (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by such Incremental Equivalent Debt the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09“Incremental Equivalent Cash Component Debt”), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of salethe Prepayment-leaseback transactions permitted by Section 7.05(mBased Incremental Facility (such Incremental Equivalent Debt the “Incremental Equivalent Prepayment Component Debt”) and any Permitted Refinancing of and/or (iii) the Ratio-Based Incremental Facility (such Attributable Indebtedness;
Incremental Equivalent Debt Incurred under this clause (f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iiiiii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage “Incremental Equivalent Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09Component Debt”); provided that, in the case of clause (ii)any Incremental Equivalent Debt Incurred by any Loan Party, (Aw) except in the case of Extendable Bridge Loans or Permitted Earlier Maturity Debt, such Indebtedness does not mature prior to the date that is Incremental Equivalent Debt shall have a final maturity no earlier than the Latest Maturity Date, Date of the Initial Term Loan Facility or the 2022 Incremental2023 Term Loan Facility and shall have a Weighted Average Life to Maturity no shorter than that of the Initial2023 Term Loan Facility or the 2022 Incremental Term Loan Facility, (x) shall not be Guaranteed by any Subsidiary of the Borrower that is not a Guarantor under the Initial Term Loan Facility or the 2022 Incremental2023 Term Loan Facility, (y) shall be unsecured or secured (provided that any such Incremental Equivalent Debt secured by the Collateral shall rank either on a first lien pari passu basis with the Liens on the Collateral securing the Initial Term Loan Facility and the 2022 Incremental2023 Term Loan Facility or on a junior lien basis to the Liens on the Collateral securing the Initial2023 Term Loan Facility and the 2022 Incremental Term Loan Facility) (and in each case, to the extent such Incremental Equivalent Debt is secured by the Collateral, or subordinated in right of payment or security, such New Term Facility shall be subject to a Market Intercreditor Agreement) and (z) may share (I) on a greater than pro rata basis, pro rata basis or less than pro rata basis with voluntary prepayments or repayments in respect of the Weighted Average Life to Maturity of any existing Term Loan outstanding at the time such Indebtedness is incurred Loans and (II) on a pro rata basis or issued, less than pro rata basis (B) no Event of Default shall exist or result therefrom but not greater than pro rata basis (other than in connection the case of prepayment with a Limited Condition Transaction where Refinancing Indebtedness)) with mandatory prepayments or repayments in respect of the standard shall be no Default existing Term Loans. The foregoing limitations will not apply to (collectively, “Permitted Debt”):
(a) (v) Indebtedness arising under the Loan Documents including any refinancing thereof in accordance with Section 8.01(a2.18, (w) Indebtedness of the Loan Parties evidenced by Refinancing Notes and any Permitted Refinancing thereof (or 8.01(fsuccessive Permitted Refinancings thereof), (x) Indebtedness of the Loan Parties evidenced by New Incremental Notes and any Permitted Refinancing thereof (or successive Permitted Refinancings thereof), (y) Specified Refinancing Debt and any Permitted Refinancing thereof (or successive Permitted Refinancings thereof) and (Cz) Permitted Debt Exchange Notes and any Permitted Refinancing thereof (or successive Permitted Refinancings thereof);
(b) Indebtedness Incurred under the aggregate principal amount at ABL Credit Agreement by the ABL Loan Parties consisting of Permitted ABL Debt, and any time outstanding of such Permitted Refinancing thereof (or successive Permitted Refinancings thereof);
(c) Indebtedness of the Borrower and its Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed is existing on the greater Closing Date and, in the case of (x) Indebtedness in excess of $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence 16,000,000, listed on a Pro Forma BasisSchedule 7.01;
(hd) Indebtedness representing deferred compensation to employees of Holdings (including, without limitation, Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Borrower or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes Subsidiaries, Disqualified Stock issued by Holdings or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Equity Interests of any Person owning such assets) and Indebtedness arising from the conversion of the obligations of the Borrower or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of the Borrower or such Restricted Subsidiary, in an aggregate principal amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (d), not to exceed the greater of (x) $62,000,000 and (y) 30.0% of Consolidated EBITDA of the Group Parties, at any one time outstanding, plus, in the case of any refinancing of any Indebtedness permitted under this clause (d) or any portion thereof, the aggregate amount of Incremental Amounts Incurred in connection with such refinancing; provided that Capitalized Lease Obligations Incurred by the Borrower or any Restricted Subsidiary pursuant to this clause (d) in connection with a Sale/Leaseback Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale/Leaseback Transaction are used by the Borrower or such Restricted Subsidiary to permanently repay outstanding Term Loans under this Agreement or other Indebtedness that is secured by pari passu Liens on the Collateral;
(e) Indebtedness Incurred by the Borrower or any of its Restricted Subsidiaries constituting reimbursement obligations with respect of to letters of credit, credit or bank guarantees, bankers’ acceptances, warehouse receipts guarantees or similar instruments issued or created in the ordinary course of business, including including, without limitation, (i) letters of credit or performance or surety bonds in respect of workers workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers workers’ compensation claims;
, health, disability or other employee benefits (pwhether current or former) obligations or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in respect connection with the purchase or other acquisition of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower equipment or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case supplies in the ordinary course of business or consistent with past practicebusiness;
(qf) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of CreditIndebtedness, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness Disqualified Stock or Preferred Stock arising from agreements of the Borrower or any of its the Restricted Subsidiaries that is a Loan Party that complies with clauses (a)providing for indemnification, (c) and (d) (as applicable) earn-outs, adjustment of the Applicable Requirementspurchase or acquisition price or similar obligations, so long as no Default or Event of Default (limited in each case, Incurred in connection with Indebtedness incurred to finance the acquisition or disposition of any business, assets or a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness Subsidiary of the Limited Condition Transaction) is continuing Borrower in accordance with this Agreement, other than guarantees of Indebtedness Incurred or would result from the incurrence Disqualified Stock or Preferred Stock issued by any Person acquiring all or any portion of such Indebtedness; provided that:
(i) if business, assets or Subsidiary for the purpose of financing such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrenceacquisition;
(iig) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as or Disqualified Stock of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on Borrower owing to a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other InvestmentRestricted Subsidiary; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are nonor Disqualified Stock owing to a Non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness Party is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) Borrower’s Obligations with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) this Agreement pursuant to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)Intercompany Note;
(xh) all premiums shares of Preferred Stock of a Restricted Subsidiary issued to the Borrower or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (if any)except to the Borrower or another Restricted Subsidiary) shall be deemed, interest in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(wh);
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)and Credit Agreement Refinancing Indebtedness;
(b) (xi) Indebtedness outstanding existing on the Closing Effective Date and listed set forth on Schedule 7.03(b9.3(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereofdate hereofEffective Date; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant subject to the Intercompany NoteSubordination Agreement;
(ci) Guarantees by the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any of the Restricted Subsidiaries otherwise permitted hereunder (other than Guarantees by a Loan Party of Indebtedness of a Non-Loan Party and except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 9.3(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 9.3); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth hereinin the Guaranty, and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations Guaranty on terms (taken as a whole) at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination terms of such Indebtedness (taken as a whole), and (Cii) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a would have been permitted as an Investment by such Loan Party shall only be permitted to the extent constituting an Investment permitted by in such Restricted Subsidiary under Section 7.02(c)(iii9.2(c);
(d) Indebtedness of the Borrower or any of the Restricted Subsidiary Subsidiaries owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)9.2; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (yi) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with Intercompany Subordination Agreement and (ii) in the terms event of any such Indebtedness in respect of the Intercompany Notesale, transfer or assignment of Current Asset Collateral, such Indebtedness shall be duly noted on the books and records of the Loan Parties as being owing in respect of Current Asset Collateral;
(e) (i) Attributable Indebtedness Capitalized Lease Obligations of the Borrower and the Restricted Subsidiaries, (ii) mortgage financings and other purchase money obligations or Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any of the Restricted Subsidiary prior Subsidiaries or (iii) Disqualified Equity Interests issued by the Borrower or any of the Restricted Subsidiaries, in each case, incurred to or within 270 days after finance the acquisition, lease, construction, repair, replacementreplacement or improvement of property, lease real or improvements personal, and whether through the direct purchase of property or the Equity Interests of any Person owning such property; provided that such Indebtedness or Disqualified Equity Interests is incurred prior to or within two hundred seventy (270) days after the applicable asset in an acquisition, lease, construction, repair, replacement or improvement; provided further that the aggregate principal amount of such Indebtedness and Disqualified Equity Interests at any one time outstanding incurred pursuant to this clause (e) (and any Permitted Refinancing thereof) shall not to exceed the greater of $13,000,000 50,000,000 and 202.75% of Consolidated EBITDA Total Assets (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined measured at the time of incurrence incurrence); provided, further, that the aggregate principal amount of such Indebtedness incurred on behalf of or representing Guarantees of Indebtedness of Joint Ventures of the Borrower or any Restricted Subsidiary under this clause (together with any Permitted Refinancings thereofe) shall not exceed $10,000,000 at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtednessoutstanding;
(f) Indebtedness in respect of Swap Contracts that are not for speculative purposes and that are designed to hedge against Holdings’, the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)risks;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of the Borrower and its Restricted Subsidiaries incurred in the ordinary course of business;
(ih) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to future, current or former officers, directors, managers, consultants, directors consultants and employeesemployees of the Borrower (or any direct or indirect parent thereof) and its Restricted Subsidiaries, their respective estates, spouses or former spouses spouses, in each case, to finance the purchase or redemption of Equity Interests of Holdings the Borrower (or any direct or indirect parent of Holdings the Borrower) permitted by Section 7.069.6(f);
(ji) Indebtedness incurred by Holdings the Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisitionan Acquisition permitted under this Agreement, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments; provided, in the case of any Disposition, any such Indebtedness shall at no time exceed the gross proceeds, including the Fair Market Value of non-cash proceeds (measured at the time received and without giving effect to any subsequent changes in value), actually received by the Borrower and its Restricted Subsidiaries in connection with such Disposition;
(kj) Indebtedness consisting of obligations of Holdings or any of its the Borrower and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with Permitted the Transaction and Acquisitions expressly permitted under this Agreement or any other Investment expressly permitted hereunder;
(lk) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract
Indebtedness. CreateNeither Holdings nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under (i) the Loan Documents and (including ii) the Senior Notes Documents in an aggregate principal amount under this clause (ii) not to exceed $745,000,000 and any Indebtedness incurred pursuant to Section 2.14 or 2.15)Permitted Refinancing thereof;
(b) (xi) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness owed to Holdings or any Restricted Subsidiary outstanding on the Closing Date and any Permitted Refinancing thereofrefinancing thereof with Indebtedness owed to Holdings or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated in right of payment to the Obligations pursuant to the an Intercompany NoteNote (subject to Section 6.16);
(c) Guarantees by the Borrower Holdings and any Restricted Subsidiary in respect of Indebtedness of the Borrower Holdings or any Restricted Subsidiary of Holdings otherwise permitted hereunder; provided that (A) no Guarantee by of any Restricted Subsidiary of Senior Notes or any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee Guaranty of the Obligations on the terms set forth herein, herein and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee Guaranty of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)Indebtedness;
(d) Indebtedness of the Borrower Holdings or any Restricted Subsidiary owing to any Loan Party Holdings or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)7.02; provided that (x) no that, subject to Section 6.16, any such Indebtedness owed to a Loan Party shall be evidenced (i) owing by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any a Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated in right of payment to the Obligations pursuant to subordination terms substantially consistent with an Intercompany Note and (ii) owed contractually to a Loan Party by any other Loan Party or any Restricted Subsidiary shall be evidenced by, and pledged to the terms of Collateral Agent pursuant to, the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower Holdings or any Restricted Subsidiary prior to or within 270 365 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 207.5% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case Total Assets determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and outstanding, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and (iii) any Permitted Refinancing of such Attributable Indebtednessany of the foregoing;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s Holdings’ or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii)purposes;
(g) Indebtedness of the Borrower Holdings or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereundersimilar permitted Investment; provided that that: (iI) solely in the case of Indebtedness assumed Indebtedness, in connection with any Permitted Acquisition or similar permitted Investment (A) such Indebtedness is may be assumed on an unlimited basis so long as after giving Pro Forma Effect to the assumption thereof (and the other transactions consummated concurrently therewith), the Consolidated First Lien Net Leverage Ratio does not exceed 6.00 to 1.00 and (B) any such assumed Indebtedness was not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or similar permitted Investment; and (iiII) after giving Pro Forma Effect to in the case of Indebtedness incurred in connection with such Permitted Acquisition and or similar permitted Investment (including to finance the incurrence of such Indebtedness, as applicable, consummation thereof) (A) the aggregate amount of such incurred Indebtedness at any time outstanding does not exceed the sum of (x1) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 90,000,000 and (y) 1515.5% of Consolidated EBITDA and (2) additional unlimited amounts that would otherwise be permitted to be incurred as Permitted Ratio Debt hereunder; provided, further, that any such Indebtedness assumed or incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s) or 7.03(v) or as a Permitted Refinancing by a Restricted Subsidiary that is not a Loan Party of Indebtedness initially incurred under any of the Borrower foregoing clauses, does not exceed in the aggregate at any time outstanding the greater of (x) $200,000,000 and (y) 35.0% of Consolidated EBITDA determined at the time of such incurrence on a Pro Forma Basisincurrence;
(h) Indebtedness representing deferred compensation to employees of Holdings (or any direct or indirect parent thereof) or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current future, present or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment expressly permitted hereunder;
(l) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management protections and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds each case in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrenceconnection with deposit accounts;
(m) Indebtedness of Holdings or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (i) the greater of $22,750,000 200,000,000 and 3535.0% of Consolidated EBITDAEBITDA at any time outstanding plus (ii) 100% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests, Designated Equity Contributions or sales of Equity Interests to Holdings or any of its Subsidiaries) of Holdings or any direct or indirect parent of Holdings after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of Holdings that has not been applied to incur debt pursuant to this clause (m)(ii), to make Restricted Payments pursuant to Section 7.06 (other than pursuant to Section 7.06(h)(y)), to make Investments pursuant to clause 7.02(n), (v), (w), (y) or (z), to make prepayments of subordinated indebtedness pursuant to Section 7.13 (other than 7.13(a)(iv)(y));
(n) Indebtedness consisting of (ia) the financing of insurance premiums or (iib) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Borrower Holdings or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 Business Days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower Holdings or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters Indebtedness not to exceed the sum of credit issued (A) the Incremental Equivalent Starter Amount plus (B) the Incremental Repayment Amount as the same shall be reduced by any Incremental Facilities incurred pursuant to Section 2.14(d)(v)(B), plus (C) additional unlimited amounts incurred as if such Incremental Equivalent Debt was incurred pursuant to the Incurrence Based Incremental Amount described in currencies Section 2.14(d)(v)(C) (such Indebtedness, “Incremental Equivalent Debt”); provided that (1) (x) if the proceeds of such Incremental Equivalent Debt are being used to finance a Permitted Acquisition, Investment, or irrevocable repayment, repurchase or redemption of any Indebtedness, no Event of Default under Sections 8.01(a) or (f) with respect to the Borrower shall have occurred and be continuing or would exist after giving effect to such Indebtedness, or (y) if the proceeds of such Incremental Equivalent Debt are being used for any other purpose permitted hereunder, no Event of Default shall have occurred and be continuing or would exist after giving effect to such Incremental Equivalent Debt; (2) such Indebtedness shall (x) in the case of Incremental Equivalent Debt secured on a pari passu basis to the Liens securing the Obligations, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and (y) in the case of Incremental Equivalent Debt secured on a junior lien basis with the Liens securing the Obligations or that is unsecured, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred (in each case, other than with respect to Incremental Equivalent Debt that constitutes Permitted Earlier Maturity Indebtedness); provided that the foregoing requirements of this clause (2) shall not available hereunder 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 (2) and such conversion or exchange is subject only to conditions customary for similar conversions or exchanges; (3) such Indebtedness shall, in the case of Incremental Equivalent Debt secured on a pari passu basis to the Liens securing the Obligations, have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities (other than with respect to Incremental Equivalent Debt that constitutes Permitted Earlier Maturity Indebtedness); provided that the foregoing requirements of this clause (3) 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 (3) and such conversion or exchange is subject only to conditions customary for similar conversions or exchanges and, in the case of Incremental Equivalent Debt secured on a junior lien basis with the Lien securing the Obligations or that is unsecured, shall not be subject to scheduled amortization prior to maturity; (4) if such Incremental Equivalent Debt is secured on a junior lien basis to the Liens securing the Obligations, the Other Debt Representative shall be subject to the Junior Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Liens securing the Obligations, the Other Debt Representative shall be subject to the First Lien Intercreditor Agreement; (5) in the case of Incremental Equivalent Debt (other than with respect to Incremental Equivalent Debt up to an amount not to exceed (x) in the case of any Permitted Acquisition or similar permitted Investment, $300,000,000 and (y) otherwise, $150,000,000), in the form of term loans secured on a pari passu basis with the Liens securing the Obligations, such Incremental Equivalent Debt shall be subject to MFN Protection as if such Indebtedness were an Incremental Term Loan; (6) such Incremental Equivalent Debt shall otherwise have terms and conditions, covenants or other provisions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of Holdings are not materially less favorable (when taken as a whole) to Holdings than the terms and conditions of the Loan Documents (when taken as a whole); provided that a certificate of Holdings as to the satisfaction of the conditions described in this clause (7) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that Holdings has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (7), shall be conclusive unless the Administrative Agent notifies Holdings within such five (5) Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)) unless (x) the Lenders of the Term Loans receive the benefit of such more restrictive terms or (y) any such provisions apply after the Latest Maturity Date at the time of incurrence of such Indebtedness or shall otherwise be reasonably satisfactory to the Administrative Agent (it being understood that to the extent any more restrictive terms added for the benefit of any such Permitted Ratio Debt, no consent shall be required from the Administrative Agent or any of the Lenders to the extent that such more restrictive terms are added for the benefit of any existing Facility); and (7) Incremental Equivalent Debt may be incurred by Restricted Subsidiaries that do not constitute Loan Parties so long as the aggregate amount of Incremental Equivalent Debt incurred pursuant to this clause (7), together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), 7.03(v) and 7.03(s) and as Permitted Refinancing of any of the foregoing by a Restricted Subsidiary that is not a Loan Party, does not exceed in the aggregate at any time outstanding not to exceed outstanding, the greater of $5,000,000200,000,000 and 35.0% of Consolidated EBITDA;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) [reserved];
(v) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(sclause (v) and then outstanding for all such Persons taken togetheroutstanding, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), 7.03(q) or 7.03(s) or as a Permitted Refinancing of any of the foregoing by a Restricted Subsidiary that is not a Loan Party, does not exceed the greater of $9,750,000 200,000,000 and 1535.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.outstanding;
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v)[reserved];
(x) Indebtedness arising from Permitted Intercompany Activities to the extent constituting an Investment that would otherwise be permitted under Section 7.02; and
(y) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);i
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (xi) Indebtedness outstanding existing on the Closing Date and listed date hereof set forth on Schedule 7.03(b9.3(b) and any Permitted Refinancing thereof and (yii) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof; date hereof provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant subject to the Intercompany NoteSubordination Agreement;
(ci) Guarantees by the Borrower and any the Restricted Subsidiary Subsidiaries in respect of Indebtedness of the Borrower or any of the Restricted Subsidiaries otherwise permitted hereunder (except that a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 9.3(c), Guarantee Indebtedness that such Restricted Subsidiary could not otherwise permitted hereunderincur under this Section 9.3); provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth hereinin the Guaranty, and (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness Indebtedness, and (Cii) any Guarantee Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a would have been permitted as an Investment by such Loan Party shall only be permitted to the extent constituting an Investment permitted by in such Restricted Subsidiary under Section 7.02(c)(iii9.2(c);
(d) Indebtedness of the Borrower or any of the Restricted Subsidiary Subsidiaries owing to any Loan Party the Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii)9.2; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (yi) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary Person that is not a Loan Party shall be unsecured and subordinated subject to the Obligations pursuant to subordination terms substantially consistent with Intercompany Subordination Agreement and (ii) in the terms event of any such Indebtedness in respect of the Intercompany Notesale, transfer or assignment of Current Asset Collateral, such Indebtedness shall be duly noted on the books and records of the Loan Parties as being owing in respect of Current Asset Collateral;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any and the Restricted Subsidiary prior to or within 270 days after Subsidiaries financing the acquisition, construction, repair, replacement, lease replacement or improvements improvement of fixed or capital assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable asset acquisition, construction, repair, replacement or improvement and any Permitted Refinancing thereof in an aggregate principal amount pursuant to this sub-clause (i) not to exceed the greater of $13,000,000 55,000,000 and 202.50% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)Total Assets, in each case determined at the time date of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and incurrence, (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m(other than sale-leaseback transactions with respect to any Designated Assets) with respect to properties acquired after the Effective Date and any Permitted Refinancing thereof in an aggregate amount outstanding pursuant to this sub-clause (ii) at any time not to exceed the greater of such (x) $55,000,000 and (y) 2.50% of Total Assets, in each case determined at the date of incurrence, and (iii) Attributable IndebtednessIndebtedness arising out of sale-leaseback transactions with respect to any Designated Assets, and any Permitted Refinancing thereof;
(f) Indebtedness in respect of Swap Contracts designed to hedge against Holdings, the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma Basis;
(h) Indebtedness representing deferred compensation to employees of Holdings or any of the Borrower and its Restricted Subsidiaries incurred in the ordinary course of business;
(ih) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, managers, consultants, directors consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent of Holdings thereof) permitted by Section 7.069.6;
(ji) Indebtedness incurred by Holdings the Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder, merger hereunder or any Disposition permitted hereunderDisposition, in each case, case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(kj) Indebtedness consisting of obligations of Holdings or any of its the Borrower and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(lk) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrencethereof;
(ml) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount that at the any time of, and after giving effect to, the incurrence thereof, would outstanding not to exceed the greater of $22,750,000 75,000,000 and 353.50% of Consolidated EBITDATotal Assets (determined at the time of incurrence); provided that a maximum of the greater of $25,000,000 and 1.25% of Total Assets (determined at the time of incurrence) in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties;
(nm) 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;
(on) Indebtedness incurred by the Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(po) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qp) letters of credit issued in currencies not available hereunder Indebtedness in an aggregate principal amount not to exceed (i) $725,000,000 at any time outstanding under the Term Facility plus (ii) the amount of (A) the Maximum Incremental Amount, (B) Permitted Pari Passu Secured Debt, (C) Secured Obligations under Secured Hedge Agreements, and (D) Obligations under Secured Cash Management Agreements (in the case of each of the foregoing clauses (A), (B), (C) and (D), as defined in the Term Facility Credit Agreement) at any time outstanding and not to exceed $5,000,000incurred in violation of Section 9.3(f), in each case and, in respect of clauses (i) and (ii), any Permitted Refinancing thereof;
(i) Indebtedness in respect of the Senior Notes (including any guarantees thereof) and (ii) any Permitted Refinancing thereof;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(s) Indebtedness incurred by a Restricted Foreign Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness of all such Foreign Subsidiaries incurred pursuant to this Section 7.03(sclause (r) and then outstanding for all such Persons taken togetheroutstanding, does not exceed the greater of $9,750,000 25,000,000 and 151.25% of Consolidated EBITDA Total Assets (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence);
(s) other secured, unsecured or subordinated Indebtedness of the Borrower or any Restricted Subsidiary (and any Permitted Refinancing thereof), so long as (A) the Payment Conditions shall have been satisfied after giving effect thereto, (B) the maturity date and Weighted Average Life to Maturity of such Indebtedness is at least six (6) months after the Latest Maturity Date at the time of incurrence of such Indebtedness, and (C) if such Indebtedness is secured, (i) any such Liens with respect to any Current Asset Collateral shall be junior to the Liens securing the Obligations and (ii) such Indebtedness is subject to an intercreditor agreement containing terms that are at least as favorable to the Secured Parties as those contained in the Intercreditor Agreement;
(t) Credit Agreement Refinancing IndebtednessReserved;
(u) Indebtedness incurred in reliance on respect of letters of credit issued for the Cumulative Credit;
(v) Indebtedness account of any of the Borrower or any Subsidiaries of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) Holdings to finance the purchase of the Applicable Requirements, Inventory so long as no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(ax) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligationsunsecured, and (y) the aggregate principal amount of such Indebtedness shall does not exceed an amount $40,000,000 at any time;
(v) Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the date hereof, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary (other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the date hereof) and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 9.1(p) and, in each case, any Permitted Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary incurred or assumed in connection with any Permitted Acquisition that is secured only by Liens permitted under Section 9.1(p) (and any Permitted Refinancing of the foregoing) and so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a all Indebtedness resulting from any Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount Refinancing thereof at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(vclause (v)(ii) shall does not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.55,000,000; and
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(aclauses (a) through 7.03(w(v) above. Notwithstanding the foregoing, no Restricted Subsidiary that is a Non-Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Guarantor. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP. Notwithstanding anything to the contrary contained in this Agreement, Indebtedness incurred pursuant to the Term Facility (and any Permitted Refinancing thereof) may only be incurred pursuant to Section 9.3(p);.
Appears in 1 contract
Sources: Credit Agreement (JOANN Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Documents;
(b) (x) Indebtedness outstanding on the Closing Restatement Effective Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing thereof); provided that any all such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees by the Borrower and or any Restricted Subsidiary in respect of Indebtedness of the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness and (C) any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all the aggregate amount of such Indebtedness of any non-Loan Party owed to any Restricted Subsidiary that is not a Loan Party at any time outstanding shall be unsecured and subordinated to not exceed the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany NoteNon-Guarantor Cap;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements improvement of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 25,000,000 and 2025.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)LTM EBITDA, in each case determined at as of the time date of incurrence (together with any Permitted Refinancings thereof) incurrence, at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtednessoutstanding;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; , provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary (i) assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; (provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof thereof) in an aggregate amount not to exceed the greater of $25,000,000 and 25.0% of LTM EBITDA, in each case determined as of the date of incurrence, at any time outstanding, or (ii) incurred to finance any Permitted Acquisition and that complies with the Applicable Requirements; so long as after giving Pro Forma Effect to such Permitted Acquisition and the assumption or incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (xA) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater no more than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.094.00 to 1.00; provided that, that in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding (or, if the initial Delayed Draw Term A Loan Funding Date has not yet occurred and there is no other Class of Term Loans outstanding hereunder, of the Delayed Draw Term A Loans assuming on any date of determination that such Loans are outstanding) at the time such Indebtedness is incurred or issued, issued and does not require any scheduled amortization or other scheduled payments of principal prior to the Latest Maturity Date and (B) no Event of Default shall exist or result therefrom (other than limited, in connection with Indebtedness incurred to finance a Limited Condition Transaction where the standard shall be no Transaction, to Defaults or Events of Default under Section Sections 8.01(a) or 8.01(f)) and (Cf) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction); provided, further, that (x) the aggregate principal amount at only obligors with respect to any time outstanding Indebtedness incurred pursuant to clause (i) of this paragraph or any Permitted Refinancing of Indebtedness in respect thereof shall be those Persons who were obligors of such Indebtedness of immediately prior to such Permitted Acquisition and (y) any such Indebtedness incurred by Restricted Subsidiaries that are non-not Loan Parties Parties, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(g), Section 7.03(q) and Section 7.03(r) and then outstanding for all such Persons taken together, shall not exceed the greater of (x) $9,750,000 10,000,000 and (y) 1510.0% of Consolidated EBITDA LTM EBITDA, in each case determined as of the Borrower determined at the time date of such incurrence on a Pro Forma Basisincurrence;
(h) Indebtedness representing deferred compensation to current or former officers, managers, consultants, directors, Investment Advisers and employees (including their respective estates, spouses or former spouses) of Holdings or any of its Restricted Subsidiaries Consolidated Party incurred in the ordinary course of business;
(i) Indebtedness consisting of promissory notes issued by Holdings the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors directors, Investment Advisers and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Rollover Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06;
(j) Indebtedness incurred by Holdings the Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(k) Indebtedness consisting of obligations of Holdings the Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within 10 15 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (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;
(on) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(po) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qp) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000Credit Agreement Refinancing Indebtedness;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(sq) Indebtedness incurred by a Foreign Subsidiary or other Restricted Subsidiary that is not a non-Loan Party Party, which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s7.03(q), Section 7.03(g) and Section 7.03(r) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 10,000,000 and 1510.0% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09)LTM EBITDA, in each case determined at as of the time date of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(vr) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited limited, in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections Section 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that any such Indebtedness incurred by Restricted Subsidiaries that are not Loan Parties, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(r), Section 7.03(g) and Section 7.03(q) and then outstanding for all such Persons taken together, shall not exceed the greater of $10,000,000 and 10.0% of LTM EBITDA, in each case determined as of the date of incurrence; provided, further, that:
(i) if such Indebtedness is secured on a pari passu basis in right of security with to the Obligations, the aggregate principal amount of such Indebtedness shall not exceed the sum of (A) an unlimited amount so long as as, such amount on and as of the date of such incurrence incurrence, would not cause the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and (computed (x) assuming all previously established and simultaneously established revolving credit facilities under Section 2.14, this Section 7.03(v)(i7.03(r)(i) or Section 7.03(r)(ii) are fully drawn drawn, (y) without giving effect to any concurrent incurrence of any Indebtedness made pursuant to Section 2.14(d)(iii)(B), the following Section 7.03(r)(i)(B) and Section 7.03(r)(ii)(B) and (z) excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (yof the foregoing Indebtedness) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior exceed 3.00 to such Permitted Acquisition or Investment 1.00 at the time of incurrence, plus (B) an amount equal to the greater of $35,000,000 and 50% of LTM EBITDA determined as of the date of incurrence (net of Indebtedness incurred pursuant to Section 2.14(d)(iii)(B) and Section 7.03(r)(ii)(B));
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition Obligations or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed the sum of (A) an amount unlimited amount, so long as such amount, on and as of the date of such incurrence (xi) if being utilized to incur Indebtedness secured on a junior basis in right of security to the Obligations, would not cause the Consolidated Total Secured Net Leverage Ratio (determined on a Pro Forma BasisBasis (computed (x) is no more than assuming all previously established and simultaneously established revolving credit facilities under Section 2.14, Section 7.03(r)(i) or this Section 7.03(r)(ii) are fully drawn, (1y) 4.25:1.00 without giving effect to any concurrent incurrence of any Indebtedness made pursuant to Section 2.14(d)(iii)(B), the foregoing Section 7.03(r)(i)(B) or the following Section 7.03(r)(ii)(B) and (2z) excluding the cash proceeds of any borrowing under any of the foregoing Indebtedness) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior exceed 3.00 to such Permitted Acquisition or Investment 1.00 at the time of incurrence or (yii) the Interest Coverage Ratio (determined on a Pro Forma Basis) if being utilized to incur unsecured Indebtedness, would not be less than (1) 2.00:1.00 or (2) to cause the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Consolidated Total Net Leverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with (computed (x) assuming all previously established and simultaneously established revolving credit facilities under Section 1.092.14, Section 7.03(r)(i) or this Section 7.03(r)(ii) are fully drawn, (y) without giving effect to any concurrent incurrence of any Indebtedness made pursuant to Section 2.14(d)(iii)(B), in each case determined the foregoing Section 7.03(r)(i)(B) or the following Section 7.03(r)(ii)(B) and (z) excluding the cash proceeds of any borrowing under any of the foregoing Indebtedness) to exceed 4.00 to 1.00 at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment an amount equal to the Loan Documents greater of $35,000,000 and that is secured by a Lien on 50.0% of LTM EBITDA determined as of the Collateral that ranks pari passu in right date of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment incurrence (if applicable) set forth in the proviso net of Indebtedness incurred pursuant to Section 2.14(e)(iii2.14(d)(iii)(B) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For and Section 7.03(r)(i)(B)); and for purposes of the calculations in this Section 7.03(v7.03(r), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (it being understood that simultaneously established revolving credit facilities under Section 2.14, Section 7.03(r)(i) or this Section 7.03(r)(ii) shall be assumed to be fully drawn), (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v7.03(r) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.Indebtedness and (C) Indebtedness incurred under clause (i)(B) or (ii)(B) above shall be available at all times and not subject to any ratio test, whether incurred simultaneously with amounts under clause (i)(A) or (ii)(A) or otherwise;
(ws) Any any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v7.03(b), (e), (g), (r), (s), and (u);
(xt) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w7.03(s);; and
(u) additional unsecured Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in an amount not to exceed the greater of $10,000,000 and 10.0% of LTM EBITDA, in each case determined as of the date of incurrence, at any time outstanding.
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Indebtedness. CreateThe Parent and the Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(a) Indebtedness the Obligations arising under this Agreement or any other Loan Document or any guaranty of or suretyship arrangement for the Obligations arising under any Loan Party under the Loan Documents (including any Indebtedness incurred pursuant to Section 2.14 or 2.15)Document;
(b) (x) Indebtedness under the Unsecured Notes outstanding on the Closing Effective Date and listed on Schedule 7.03(b) 6.01(b), and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Closing Date and any Permitted Refinancing in respect thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) Guarantees Indebtedness of the Parent, the Borrower or any Restricted Subsidiary existing on the Effective Date (other than Indebtedness under Unsecured Notes outstanding on the Effective Date) that is listed on Schedule 6.01(c), and any refinancings, renewals or extensions (but not increases) thereof;
(d) Indebtedness under Capital Leases (as required to be reported on the consolidated financial statements of the Parent pursuant to GAAP) not to exceed $15,000,000;
(e) Indebtedness associated with bonds or surety obligations required by Governmental Requirements in connection with the operation of the Oil and Gas Properties;
(f) unsecured intercompany Indebtedness between (a) any of the Parent, the Borrower and any Restricted Subsidiary in respect of or (b) any Restricted Subsidiaries to the extent permitted by Section 6.04(d); provided that any such Indebtedness of is not held, assigned, transferred, negotiated or pledged to any Person other than the Parent, the Borrower or a Restricted Subsidiary, and provided, further, that any such Indebtedness owed by the Borrower or any Restricted Subsidiary otherwise permitted hereunder; provided that Guarantor to any (Aother) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee Guarantor shall be subordinated to the Guarantee of the Secured Obligations on terms at least as favorable set forth in the Guaranty;
(as reasonably determined by the Borrowerg) to the Lenders as those contained in the subordination of such extent that it constitutes Indebtedness, unsecured intercompany Indebtedness and (C) owed by any Guarantee by a Loan Party of Indebtedness of a Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(d) Indebtedness of the Parent, the Borrower or and any Restricted Subsidiary owing to any Loan Party or any other Restricted Unrestricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in existing on the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to subordination terms substantially consistent with the terms of the Intercompany Note;
(e) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement, lease or improvements of the applicable asset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence Effective Date (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in capitalized interest with respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereofthereto); provided that any such Guarantees by Loan Parties Indebtedness (if any) is not held, assigned, transferred, negotiated or pledged to any Person other than a wholly-owned Subsidiary of the Parent, and provided, further, that any such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted subordinated to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely Secured Obligations on terms set forth in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness at any time outstanding does not exceed the sum of (x) the greater of $16,250,000 and 25% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the case of clause (ii), (A) such Indebtedness does not mature prior to the date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the standard shall be no Default under Section 8.01(a) or 8.01(f)) and (C) the aggregate principal amount at any time outstanding of such Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(g) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower determined at the time of such incurrence on a Pro Forma BasisSubordination Agreement;
(h) Indebtedness representing deferred compensation to employees endorsements of Holdings or any of its Restricted Subsidiaries incurred negotiable instruments for collection in the ordinary course of business;
(i) other Indebtedness consisting (not included under subsections (a) through (h) of promissory notes issued by Holdings or this Section 6.01) not to exceed $35,000,000 in the aggregate at any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent of Holdings permitted by Section 7.06one time outstanding;
(j) unsecured Indebtedness incurred by Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment permitted hereunder, merger or any Disposition permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;under
(ka) Indebtedness consisting of obligations of Holdings or Unsecured Notes (other than the Unsecured Notes outstanding on the Effective Date and any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with Permitted Acquisitions or any other Investment permitted hereunder;
(l) Cash Management Obligations and other Refinancing Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business thereof) and any Guarantees thereof of any Credit Party in respect thereof, provided that (1) such Unsecured Notes and any Unsecured Notes Indenture under which such Unsecured Notes are issued contain customary terms and conditions for unsecured notes of similar type and of like tenor and amount and do not contain any financial covenants that are more onerous to the Parent, the Borrower and the Restricted Subsidiaries than those imposed by this Agreement or the honoring by a bank or other financial institution Loan Documents, (2) the final stated maturity date of a check, draft or similar instrument drawn against insufficient funds in such Unsecured Notes and the ordinary course average life of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
Unsecured Notes (m) Indebtedness in an aggregate principal amount that based on the stated final maturity date and payment schedule provided at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater date of $22,750,000 and 35% of Consolidated EBITDA;
(n) 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;
(o) Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount issuance of such Letter Unsecured Notes) shall not be earlier than 91 days after the Maturity Date (as in effect on the date of Credit;
(s) Indebtedness incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount issuance of all other Indebtedness incurred pursuant to this Section 7.03(ssuch Unsecured Notes) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined 3) at the time of incurrence;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred in reliance on the Cumulative Credit;
(v) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) and (d) (as applicable) of the Applicable Requirements, so long as no Default or Event of Default (limited in connection with Indebtedness incurred immediately after giving effect to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the each incurrence of such Indebtedness; provided that:
, no Default shall have occurred and be continuing, and provided, further, that immediately upon any incurrence of Indebtedness permitted by this clause (i) if such Indebtedness is secured on a pari passu j), the Borrowing Base then in right effect shall be automatically reduced by an amount equal to 25% of security with the Obligations, the aggregate principal amount of such Indebtedness shall incurred (calculated at the face amount of the Indebtedness incurred without giving effect to any original issue discount) and (b) any Permitted Refinancing Indebtedness in respect thereof; and
(k) Permitted Second Lien Debt, in any aggregate principal amount that does not exceed an $75,000,000 (as such principal amount so long as on may be increased by the amount of any capitalized interest or fees with respect thereto), and as of any refinancing or replacement thereof (provided such refinancing or replacement is permitted under the date Intercreditor Agreement and concurrently with the incurrence of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any refinancing or entry into such revolving credit replacement facility) is no more than or equal to (x) 3.75:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 Administrative Agent, the Permitted Second Lien Agent thereunder, and (II) the Consolidated First Lien Net Leverage Ratio immediately prior applicable Credit Parties shall have entered into an intercreditor agreement on terms substantially similar to those in the Intercreditor Agreement or such Permitted Acquisition or Investment other customary terms as are acceptable to each Lender); provided that at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount and immediately after giving effect to each incurrence of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (x) 4.00:1.00 or (y) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis) is no more than (1) 4.25:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.25:1.00 and (II) the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence or (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness of Subsidiaries that are non-Loan Parties incurred pursuant to this Section 7.03(v) shall not exceed the greater of (x) $9,750,000 and (y) 15% of Consolidated EBITDA of the Borrower (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence and (B) provided that if such Indebtedness is a term loan that is not subordinated in right of payment to the Loan Documents and that is secured by a Lien on the Collateral that ranks pari passu in right of security with the Term Loans, the Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(e)(iii) as if such Indebtedness were an Incremental Term Loan incurred thereunder. For purposes of the calculations in this Section 7.03(v), (A) with respect to any Revolving Credit Commitments, a borrowing of the maximum amount of Loans available thereunder shall be assumed and (B) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect no Default shall be given to such repayment of Indebtednessexist.
(w) Any Permitted Refinancings of Indebtedness incurred pursuant to Section 7.03(v);
(x) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in Sections 7.03(a) through 7.03(w);
Appears in 1 contract