Common use of Equity Cure Contributions Clause in Contracts

Equity Cure Contributions. For purposes of determining compliance with the Financial Covenants as of the last day of any fiscal quarter of the Borrower, any cash equity contribution to the Borrower by Holdings (to the extent funded by Holdings from the proceeds of the issuance of Qualified Equity Interests or Permitted Affiliate Sub Debt by Holdings) after the last day of any 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 for such fiscal quarter (each an “Equity Cure Contribution”) will, at the request of the Borrower, be included in the calculation of Consolidated EBITDA for purposes of determining compliance with the Financial Covenants for the applicable fiscal quarter and any applicable subsequent periods that include such fiscal quarter; provided, that (i) in each four (4) fiscal quarter period, there shall be a period of at least two (2) fiscal quarters in which no Equity Cure Contribution is made and only four (4) Equity Cure Contributions may be made during the term of this Agreement, (ii) the amount of any Equity Cure Contributions shall not exceed the amount required to cause the Borrower to be in compliance with the Financial Covenants, (iii) all Equity Cure Contributions will be used solely for curing the Financial Covenants and will be disregarded for purposes of determining the availability of any baskets, pricing or step-downs with respect to other provisions contained in the Loan Documents, (iv) the proceeds of each Equity Cure Contribution shall have been contributed to the Borrower as a cash common equity contribution or as Permitted Affiliate Sub Debt and shall be promptly used by the Borrower to prepay the Term Loans pursuant to Section 2.1(g)(6) and (e) there shall be no pro forma or other reduction of Total Net Debt (including by way of cash netting) using the proceeds of any Equity Cure Contribution for purposes of determining compliance for the fiscal quarter (and subsequent quarters in the applicable Test Period) in respect of which such Equity Cure Contribution was made.

Equity Cure Contributions. For purposes of determining compliance with the Financial Covenants as of the last day of any fiscal quarter of the Borrowercalendar month ending on or prior to August 31, 2019, any cash equity contribution to the Borrower by Holdings (to the extent funded by Holdings from the proceeds of the issuance of Qualified Equity Interests or Permitted Affiliate Sub Debt by Holdings) after the last day of any fiscal quarter such calendar month 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 under Section 5.1 for the period ending the last day of such fiscal quarter calendar month (each an “Equity Cure Contribution”) will, at the request of the Borrower, be included in the calculation of Consolidated EBITDA for purposes of determining compliance with the Financial Covenants for the applicable fiscal quarter calendar month and any applicable subsequent periods that include such fiscal quartercalendar month; provided, that (i) in each four (4) fiscal quarter any twelve month period, there shall not be a period of at least more than three (3) calendar months in which an Equity Cure Contribution is made, (ii) the Borrower shall not be permitted make an Equity Cure Contribution in more than two (2) fiscal quarters in which no Equity Cure Contribution is made and only four (4) Equity Cure Contributions may be made during the term of this Agreementconsecutive calendar months, (iiiii) the amount of any Equity Cure Contributions shall not exceed be less than $1,000,000 (provided, that, in the event that the amount required to cause the Borrower to be in compliance with the Financial CovenantsCovenants is less than the minimum Equity Cure Contribution set forth in this clause (iii), the Borrower must satisfy the minimum Equity Cure Contribution requirement of this clause (iii), but only the portion of such Equity Cure Contribution required to cause the Borrower to be in compliance with the Financial Covenants for such month shall be included in the calculation of Consolidated EBITDA for purposes of determining compliance with the Financial Covenants in accordance with the foregoing), (iiiv) all Equity Cure Contributions will be used solely for curing the Financial Covenants and will be disregarded for purposes of determining the availability of any baskets, pricing or step-downs with respect to other provisions contained in the Loan Documents, (iv) the proceeds of each Equity Cure Contribution shall have been contributed to the Borrower as a cash common equity contribution or as Permitted Affiliate Sub Debt and shall be promptly used by the Borrower to prepay the Term Loans pursuant to Section 2.1(g)(6) and (evi) there shall be no pro forma or other reduction of Total Net Debt (including by way of cash netting) using the proceeds of any Equity Cure Contribution for purposes of determining compliance for the fiscal quarter calendar month (and subsequent quarters months in the applicable Test Period) in respect of which such Equity Cure Contribution was made. For the avoidance of doubt, the provisions of this clause (e) shall not apply to, and no Equity Cure Contributions shall be made with respect to, any period after the month ending August 31, 2019.

Equity Cure Contributions. For purposes of determining compliance with the Financial Covenants as of the last day of any fiscal quarter of the Borrowercalendar month ending on or prior to August 31, 2019, , any cash equity contribution to the Borrower by Holdings (to the extent funded by Holdings from the proceeds of the issuance of Qualified Equity Interests or Permitted Affiliate Sub Debt by HoldingsHoldings to Hydrofarm Investment Corp. and solely designated as being for the purpose of curing the breach of Financial Covenants pursuant to this clause (e)) after the last day of any fiscal quarter such calendar month 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 under Section 5.1 for the period ending the last day of such fiscal quarter calendar month (each an “Equity Cure Contribution”) will, at the request of the Borrower, be included in the calculation of Consolidated EBITDA for purposes of determining compliance with the Financial Covenants for the applicable fiscal quarter calendar month and any applicable subsequent periods that include such fiscal quartercalendar month; provided, that (i) in each four (4) fiscal quarter any twelve month period, there shall not be a period of at least more than three (3) calendar months in which an Equity Cure Contribution is made, (ii) the Borrower shall not be permitted make an Equity Cure Contribution in more than two (2) fiscal quarters in which no Equity Cure Contribution is made and only four (4) Equity Cure Contributions may be made during the term of this Agreementconsecutive calendar months, (iiiii) the amount of any Equity Cure Contributions shall not exceed be less than $1,000,000 (provided, that, in the event that the amount required to cause the Borrower to be in compliance with the Financial Covenants, Covenants is less than the minimum Equity Cure Contribution set forth in this clause (iii) all ), the Borrower must satisfy the minimum Equity Cure Contributions will Contribution requirement of this clause (iii), but only the portion of such Equity Cure Contribution required to cause the Borrower to be used solely for curing in compliance with the Financial Covenants and will for such month shall be disregarded included in the calculation of Consolidated EBITDA for purposes of determining compliance with the availability of any baskets, pricing or step-downs Financial Covenants in accordance with respect to other provisions contained in the Loan Documentsforegoing), (iv) the proceeds of each Equity Cure Contribution shall have been contributed to the Borrower as a cash common equity contribution or as Permitted Affiliate Sub Debt and shall be promptly used by the Borrower to prepay the Term Loans pursuant to Section 2.1(g)(6), (v) all Equity Cure Contributions will be used solely for curing the Financial Covenants and will be disregarded for purposes of determining the availability of any baskets, pricing or step-downs with respect to other provisions contained in the Loan Documents, and (evi) there shall be no pro forma or other reduction of Total Net Debt (including by way of cash netting) using the proceeds of any Equity Cure Contribution for purposes of determining compliance for the fiscal quarter calendar month (and subsequent quarters months in the applicable Test Period) in respect of which such Equity Cure Contribution was made. For the avoidance of doubt, the provisions of this clause (e) shall not apply to, and no Equity Cure Contributions shall be made with respect to, any period after the month ending August 31, 2019.