Additional Covenant Defeasance Clause Samples
The Additional Covenant Defeasance clause allows a borrower or issuer to be released from certain restrictive covenants in a debt agreement, typically after meeting specific conditions such as depositing sufficient funds or government securities to cover future payments. In practice, this means that once the required financial arrangements are made, the issuer is no longer bound by obligations like maintaining certain financial ratios or restrictions on asset sales, though the core payment obligations may remain. This clause provides flexibility to the issuer and can make the debt instrument more attractive to investors by clarifying the circumstances under which covenants can be lifted, thereby reducing ongoing compliance burdens once the debt is effectively secured.
Additional Covenant Defeasance of the Base Indenture shall apply in respect of any Outstanding Notes; provided that subject to the conditions set forth under Section 4.2(3) of the Base Indenture, the Company may, at its option and at any time, elect to have the Obligations of the Company released with respect to Sections 3.3 and 5.1 hereof in connection with the Covenant Defeasance as provided under Section 4.2(2) of the Base Indenture. In the event such Covenant Defeasance occurs, the events set forth under Section 6.1 hereof shall no longer constitute an Event of Default with respect to the Notes.
Additional Covenant Defeasance. In addition to the “obligations” referred to in Section 10.3 of the Base Indenture, “Covenant Defeasance”, as defined in such Section, will also apply to the release of obligations of the Issuer, Hovnanian and the Guarantors set forth in Section 3.04 through 3.11 hereof, inclusive and clause (c) of Section 3.12 hereof, Section 5.01 hereof and each Guarantor’s obligations under its Guarantee Notation and clauses (iii) (with respect to the covenants so defeased), (iv), (v), (vi) and (ix) of Section 4.01(a) hereof will no longer constitute Events of Default.
Additional Covenant Defeasance. In addition to the obligations referred to in Section 13.03 of the Base Indenture, the term “covenant defeasance”, as defined in Section 13.03, shall also apply to the obligations of the Company set forth in Section 4.01(c), Section 4.01(d) (insofar as it relates to Section 10.05 of the Base Indenture), Section 4.01(e), Section 4.01(f), Section 4.01(g) and Article 5 of this Supplemental Indenture.
Additional Covenant Defeasance. In addition to the covenants set forth in Section 11.02(b)(ii) of the Original Indenture, the Company at any time may terminate, with respect to Debt Securities of a particular series, its obligations under Section 2.02 of this Second Supplemental Indenture, upon the terms and subject to the conditions of Article XI of the Original Indenture. If the Company exercises, with respect to a particular series of Debt Securities, its "covenant defeasance option" under Section 11.02(b)(ii) of the Original Indenture, as supplemented by this Second Supplemental Indenture, then, in addition to the Events of Default specified in the second sentence of the second paragraph of Section 11.02(b) of the Original Indenture, payment of the Debt Securities of the defeased series may not be accelerated because of the Event of Default specified in Section 2.03 of this Second Supplemental Indenture.
Additional Covenant Defeasance. In addition to the “obligations” referred to in Section 10.3 of the Base Indenture, “Covenant Defeasance”, as defined in such Section, shall also apply to the release of obligations of the Guarantors set forth in Section 5.02 and each Guarantor’s obligations under its Guarantee, and clauses (v) (with respect to the covenants so defeased), (vi), (vii), (viii) and (xi) of Section 4.02(a) shall no longer constitute Events of Default.
Additional Covenant Defeasance. In addition to the “obligations” referred to in Section 10.3 of the Base Indenture, “Covenant Defeasance”, as defined in such Section, will also apply to the release of obligations of the Issuer, Hovnanian and the Guarantors set forth in Section 3.04 through 3.11 hereof, inclusive, clause (c) of Section 3.12 hereof, Section 3.13 hereof, Section 5.01 hereof and each Guarantor’s obligations under its Guarantee Notation and clauses (iii) (with respect to the covenants so defeased), (iv), (v), (vi), (vii) (with respect to Significant Subsidiaries), (viii) (with respect to Significant Subsidiaries) and (ix) of Section 4.01(a) hereof will no longer constitute Events of Default or Defaults.
Additional Covenant Defeasance. In addition to the “obligations” referred to in Section 10.3 of the Base Indenture, “Covenant Defeasance”, as defined in such Section, will also apply to the release of obligations of the Issuer, Hovnanian and the Guarantors set forth in Section 3.04 through 3.11 hereof, inclusive, clause (c) of Section 3.12 hereof, Section 3.13 hereof, Section 5.01 hereof and each Guarantor’s obligations under its Guarantee Notation and clauses (iii) (with respect to the covenants so defeased), (iv), (v), (vi), (vii) (with respect to Significant Subsidiaries), (viii) (with respect to Significant Subsidiaries) and (ix) of Section 4.01(a) hereof will no longer constitute Events of Default or Defaults.