Equity Cure Clause Samples
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Equity Cure. Notwithstanding anything to the contrary contained in this Section 11, in the event that the Borrower fails to comply with the requirement of the financial covenant set forth in Section 10.7, from the beginning of any fiscal period until the expiration of the 10th Business Day following the date financial statements referred to in Sections 9.1(a) or (b) are required to be delivered in respect of such fiscal period for which such financial covenant is being measured, any holder of Capital Stock or Stock Equivalents of the Borrower or any direct or indirect parent of the Borrower shall have the right to cure such failure (the “Cure Right”) by causing cash net equity proceeds derived from an issuance of Capital Stock or Stock Equivalents (other than Disqualified Stock, unless reasonably satisfactory to the Administrative Agent) by the Borrower (or from a contribution to the common equity capital of the Borrower) to be contributed, directly or indirectly, as cash common equity to the Borrower, and upon receipt by the Borrower of such cash contribution (such cash amount being referred to as the “Cure Amount”) pursuant to the exercise of such Cure Right, such financial covenant shall be recalculated giving effect to the following pro forma adjustments:
(a) Consolidated EBITDA shall be increased, solely for the purpose of determining the existence of an Event of Default resulting from a breach of the financial covenant set forth in Section 10.7 with respect to any period of four consecutive fiscal quarters that includes the fiscal quarter for which the Cure Right was exercised and not for any other purpose under this Agreement, by an amount equal to the Cure Amount;
(b) Consolidated First Lien Secured Debt shall be decreased solely to the extent proceeds of the Cure Amount are actually applied to prepay any of the Credit Facilities and there shall be no pro forma reduction in Indebtedness with the proceeds of the Cure Amount for determining compliance with the financial covenant set forth in Section 10.7 unless such proceeds are actually applied to prepay Indebtedness under the Credit Facilities; and
(c) if, after giving effect to the foregoing recalculations, the Borrower shall then be in compliance with the requirements of the financial covenant set forth in Section 10.7, the Borrower shall be deemed to have satisfied the requirements of the financial covenant set forth in Section 10.7 as of the relevant date of determination with the same effect as though ther...
Equity Cure. Notwithstanding anything to the contrary contained in Section 7.01, in the event that the Borrower fails to comply with either Financial Covenant, from the end of any fiscal period until the expiration of the 10th Business Day following the date financial statements referred to in Section 5.01(a) or Section 5.01(b), as applicable, are required to be delivered in respect of such fiscal period for which such Financial Covenant is being measured, if the Borrower receives a Specified Equity Contribution, the Borrower may apply the amount of the net cash proceeds thereof to increase EBITDA with respect to such fiscal quarter; provided that (i) in each period of four consecutive fiscal quarters, there shall be no more than two fiscal quarters in which a Specified Equity Contribution is made, (ii) no more than five Specified Equity Contributions shall be made in the aggregate during the term of this Agreement, (iii) the amount of any Specified Equity Contribution shall be no more than the amount required to cause the Borrower to be in pro forma compliance with Section 6.13 for any applicable period, (iv) all Specified Equity Contributions shall be disregarded for purposes of determining any baskets, financial ratio based calculations or pricing with respect to the covenants contained in this Agreement and the calculation of the Available Amount and Required Percentage and (v) there shall be no pro forma reduction in Indebtedness with the proceeds of any Specified Equity Contribution for determining compliance with Section 6.13 for the fiscal quarter in respect of when such Specified Equity Contribution is made (either directly through prepayment or indirectly as a result of the netting of unrestricted cash). Notwithstanding anything to the contrary herein, no Revolving Lender shall be required to fund any Revolving Loans or other advance, and no Issuing Bank shall be required to issue any Letter of Credit, at any time during the period beginning on the date the Borrower notifies any Administrative Agent that it intends to make a Specified Equity Contribution and ending on the date the Specified Equity Contribution is made.
Equity Cure. If a Cure Event occurs, any Cure Fund Payments received by (x) Borrowers, in the case of the Current Ratio or Collateral Coverage Ratio, or (y) Holdings, in the case of the Debt to Capitalization Ratio, in either case, during the applicable Cure Period will, at the request of Borrowers, be included (i) as cash in the calculation of the Collateral Formula Amount (in the event of a Default with respect to the Collateral Coverage Covenant), (ii) Net Worth of Holdings (in the event of a Default with respect to the Debt to Capitalization Covenant) or (iii) as cash in the determination of ▇▇ ▇▇▇▇▇’▇ current assets (in the event of a Default with respect to the Current Ratio Covenant) solely for the purposes of determining compliance with such Financial Covenants at the end of such test period and any subsequent test period that includes such test; provided that (a) the amount of any Cure Fund Payment will be (x) with respect to a Default under the Collateral Coverage Covenant, an amount greater than or equal to the amount required to cause the Collateral Coverage Ratio, determined on a pro forma basis, to equal the Collateral Coverage Cure Target, and (y) with respect to all other Financial Covenant Defaults, an amount greater than or equal to the least amount required to cause the Loan Parties to be in compliance with Financial Covenants, (b) notwithstanding anything in this Agreement to the contrary, all Cure Fund Payments will be disregarded for all other purposes, including calculating basket levels, pricing and other items governed by reference to the Financial Covenants, liquidity or availability and may not be used for any other purpose hereunder, (c) all Cure Fund Payments shall be promptly used by Borrowers to prepay Loans and other Obligations in the manner prescribed by Section 2.4(d), and (d) for the avoidance of doubt, any Loans prepaid with any Cure Fund Payments shall be deemed outstanding for purposes of determining compliance with such financial covenants for the test period in respect of which Cure Fund Payment was received. So long as Borrowers are otherwise entitled to exercise its rights under this Section 8.2, (i) from the effective date of delivery of an irrevocable written notice from Borrowers to Agent of Borrowers’ intent to exercise their rights hereunder (a “Cure Notice”) until the earlier to occur of the end of the applicable Cure Period and the date on which Agent is notified that the Cure Fund Payment will not be made, neither Agen...
Equity Cure. Notwithstanding anything to the contrary contained in this Article VI, for purposes of determining compliance with Sections 6.1 and 6.2 as of the last day of any Fiscal Quarter, any cash equity contribution in the Borrower (which is funded with proceeds of equity issued by the Borrower not constituting Disqualified Capital Stock) received after the last day of such Fiscal Quarter and on or prior to the day that is fifteen (15) Business Days after the day on which financial statements are required to be delivered pursuant to Section 5.1(a) or 5.1(b), as applicable (the “Cure Period”), will, upon notice by the Borrower (which notice must be received by the Administrative Agent no later than the day on which financial statements are required to be delivered for the applicable Fiscal Quarter) (the “Cure Notice”), be included in the calculation of Consolidated EBITDA for purposes of determining compliance with Sections 6.1 and 6.2 for the applicable Fiscal Quarter and applicable subsequent periods that include such Fiscal Quarter (any such equity contribution so included in the calculation of Consolidated EBITDA, a “Specified Equity Contribution”); provided that (a) no Lender shall be required to make any extension of credit during the fifteen (15) Business Day period referred to above unless the Borrower has received the proceeds of such Specified Equity Contribution, (b) in each four Fiscal Quarter period, there shall be a period of two Fiscal Quarters in which no Specified Equity Contribution is made and only five Specified Equity Contributions may be made during the term of this Agreement, (c) the amount of any Specified Equity Contribution shall not exceed the amount required to cause the Borrower to be in compliance with Sections 6.1 and 6.2, (d) all Specified Equity Contributions will be disregarded for purposes of determining the availability of any baskets with respect to the covenants contained in this Agreement and the other Loan Documents, and (e) there shall be no pro forma reduction in Indebtedness (through either netting of cash or prepayment of indebtedness) with the proceeds of any Specified Equity Contribution for determining compliance with Sections 6.1 and 6.
Equity Cure. Notwithstanding anything to the contrary contained in this Section 11, in the event that Holdings fails to comply with the requirement of the financial covenants set forth in Section 10.7, from the end of such applicable Test Period until the expiration of the 10th Business Day following the date the Section 9.1 Financials in respect of such fiscal period for which such financial covenant is being measured are required to be delivered pursuant to Section 9.1, any holder of Capital Stock or Stock Equivalents of Holdings (other than a Restricted Subsidiary of Holdings) or any direct or indirect parent of Holdings shall have the right to cure such failure (the “Cure Right”) by causing cash net equity proceeds derived from an issuance of Capital Stock or Stock Equivalents (other than Disqualified Stock, unless reasonably satisfactory to the Administrative Agent) by Holdings to be contributed as common equity to the Borrower, and upon receipt by the Borrower of such cash contribution (such cash amount being referred to as the “Cure Amount”) pursuant to the exercise of such Cure Right, such financial covenant shall be recalculated giving effect to the following pro forma adjustments:
(a) Consolidated EBITDA shall be increased, solely for the purpose of determining the existence of an Event of Default resulting from a breach of the financial covenants set forth in Section 10.7 with respect to any period of four consecutive fiscal quarters that includes the fiscal quarter for which the Cure Right was exercised and not for any other purpose under this Agreement, by an amount equal to the Cure Amount;
Equity Cure. (a) If any of the requirements of the financial covenants in paragraphs (a) to (c) of Clause 22.2 (Financial condition) are not complied with (or would but for this Clause 22.4 not be complied with) in respect of a Relevant Period (a “Breach Period”), but
(i) after the expiry of such Breach Period and on or prior to the date falling 20 Business Days after the date on which the Compliance Certificate relating to the relevant Quarterly Financial Statements, Semi-Annual Financial Statements and/or Annual Financial Statements (as applicable) for a period ending on the last day of that Breach Period is delivered (or, if earlier, is due to be delivered) to the Facility Agent under paragraph (a) of Clause 21.2 (Provision and contents of Compliance Certificate) (the “Cure Date”) a New Shareholder Injection is made available to the Borrower (the proceeds of such New Shareholder Injection so received by the Borrower in cash, after deducting all fees, costs, expenses and/or Taxes incurred therewith, being the “Cure Amount”);
(ii) the Borrower has elected to apply such Cure Amount to cure the breach of such requirements under paragraphs (a) to (c) of Clause 22.2 (Financial condition) for such Breach Period pursuant to paragraphs (b) and (c) below; and
(iii) such Cure Amount is sufficient to cure the breach of such requirements under paragraphs (a) to (c) of Clause 22.2 (Financial condition) for such Breach Period (as determined in accordance with paragraph (c)), then, if, after giving effect to the adjustments under paragraph (c) below, the requirements of the financial covenants in paragraphs (a) to (c) of Clause 22.2 (Financial condition) are met in respect of such Breach Period, such requirements shall be deemed to have been satisfied as at the original date of determination of such financial covenants for such Breach Period as though there had been no failure to comply with such financial covenants under paragraphs (a) to (c) of Clause 22.2 (Financial condition) for such Breach Period and any Default or Event of Default occasioned thereby shall be deemed to have been remedied for all purposes under the Finance Documents.
(b) Paragraph (a) above will only apply in respect of a Breach Period if each of the following conditions is satisfied:
(i) the Borrower delivers to the Facility Agent a certificate within 20 Business Days after the date on which the relevant Compliance Certificate referred to in paragraph (a) above was (or, if earlier, was due to be delivered) de...
Equity Cure. 21.3.1 In this Clause:
Equity Cure. Solely for purposes of determining compliance with the financial covenants set forth in this Section 6.01, Eligible Equity Proceeds received after the Closing Date and on or prior to the earlier of the date on which the Guarantor’s Forms 10-K or 10-Q are filed or required to be filed in respect of the fiscal quarter most recently ended (the "Specified Fiscal Quarter") shall, at the request of Borrower, be included in the calculation of Consolidated EBITDA for the purposes of determining compliance with the financial covenants set forth in Sections 6.01(a) and (b) above for the Specified Fiscal Quarter (and will remain in the calculation of Consolidated EBITDA for such Specified Fiscal Quarter when calculating compliance with Sections 6.01(a) and (b) for the subsequent three quarter ends which include such Specified Fiscal Quarter) (any such equity contribution so included in the calculation of Consolidated EBITDA, a "Specified Equity Contribution"); provided that (i) there shall not be more than two Specified Equity Contributions during the term of this Agreement and (ii) not more than one Specified Equity Contribution may be made in any four quarter period. For the avoidance of doubt, all Specified Equity Contributions shall be disregarded for all other purposes of this Agreement.
Equity Cure. (a) If, as at the end of any Relevant Period, the Company is in breach of its obligations under one or more of paragraphs (a), (b) or (c) of Clause 22.2 (Financial condition), the Company shall be entitled to remedy that breach by applying the proceeds of New Shareholder Injections in or towards prepayment of the Utilisations in accordance with this Clause 22.4 and Clause 8.3 (Application of mandatory prepayments and cancellations).
(b) Any New Shareholder Injections must be provided within 10 Business Days of the date of delivery to the Agent of the financial statements and the Compliance Certificate in which such breach was evidenced.
(c) The Company may not apply the proceeds of New Shareholder Injections pursuant to this Clause 22.4:
(i) more than four times over the life of the Facilities; or
(ii) in respect of two consecutive Relevant Periods.
(d) The Company will apply all amounts of any New Shareholder Injections made for the purposes of this Clause 22.4 (Equity Cure) upon receipt in prepayment of the Utilisations as if that prepayment was a mandatory prepayment applied in accordance with Clause 8.3 (Application of mandatory prepayments and cancellations).
(e) The amount of any New Shareholder Injections applied in prepayment of Utilisations pursuant to this Clause 22.4 in respect of a breach which occurred during or at the end of a Relevant Period shall:
(i) for the purposes of paragraph (a) of Clause 22.2 (Financial condition), be deemed to have been received on the first day of the last Financial Quarter forming part of that Relevant Period and included in the calculation of Cashflow;
(ii) for the purposes of paragraph (b) of Clause 22.2 (Financial condition), be deemed to have increased the Cashflow during that Relevant Period; and
(iii) for the purposes of paragraph (c) of Clause 22.2 (Financial condition), be deemed to have reduced the Total Debt as at the end of that Relevant Period; and the financial covenants set out in paragraphs (a) to (c) (inclusive) of Clause 22.2 (Financial condition) shall be recalculated accordingly.
(f) For the avoidance of doubt any New Shareholder Injections applied in accordance with this Clause 22.4 to remedy a breach of a financial covenant may be deemed to have been applied to adjust the calculation of Cashflow, Finance Charges and Total Debt as set out above for any Relevant Period which includes the last Financial Quarter of the Relevant Period in respect of which the breach occurred, but not in any other c...
Equity Cure. (a) Notwithstanding anything to the contrary contained in Section 8.1, in the event that the Borrower fails (or, but for the operation of this Section 8.4, would fail) to comply with the requirements of the covenants set forth in Section 7.7 as of the end of any fiscal quarter, then until the expiration of the tenth (10th) Business Day subsequent to the date the Compliance Certificate calculating the covenants set forth in Section 7.7 is required to be delivered pursuant to Section 6.1(c) for such fiscal quarter, Holdings shall have the right to issue Equity Interests (which Equity Interests will be common Equity Interests), indirectly through Parent, to the Investors for cash, or otherwise receive cash contributions to its capital from the Investors, and, in each case, to contribute any such cash as common equity to the capital of the Borrower (collectively, the “Cure Right”). During such 10-Business Day period, the Administrative Agent and the Lenders agree that no actions may be taken in respect of the exercise of remedies under Sections 8.2 or 8.3 or under any other provision of this Agreement or any other Loan Document solely in respect of such failure to comply with the requirements set forth in Section 7.7. Upon the receipt by the Borrower of such cash (the “Cure Amount”), the Borrower shall recalculate the covenants set forth in Section 7.7 giving effect to the following pro forma adjustments:
(i) Consolidated EBITDA shall be increased for such fiscal quarter, solely for the purpose of measuring the covenants set forth in Section 7.7, and not for any other purpose under this Agreement, by an amount equal to the Cure Amount; and
(ii) if, after giving effect to the foregoing recalculations, the Borrower shall then be in compliance with the requirements of the covenants set forth in Section 7.7, the Borrower shall be deemed to have satisfied the requirements of the covenants set forth in Section 7.7 as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of the covenant set forth in Section 7.7 that had occurred shall be deemed cured for the purposes of this Agreement.
(b) Notwithstanding anything herein to the contrary, (i) the Cure Right shall not be exercised in more than two (2) fiscal quarters during each four (4) fiscal quarter period, (ii) the Cure Amount shall be no greater than the amount required for purposes of complying with the...