Equity Cure Securities Clause Samples
The Equity Cure Securities clause allows a borrower or issuer to remedy a financial covenant breach by injecting new equity into the company. In practice, this means that if the company fails to meet certain financial ratios or requirements, it can raise additional capital—often through the issuance of new shares or other equity instruments—to restore compliance. This mechanism provides flexibility for companies facing temporary financial difficulties, helping them avoid default and maintain access to financing by addressing shortfalls through fresh equity contributions.
Equity Cure Securities. In the event the Borrower Representative delivers a Cure Notice, there shall be purchased on or after the Testing Date the common equity interests (or such other equity interests on terms reasonably acceptable to the Term Agent) of (or cash capital contributions on or after the Testing Date to) MediaCo, the proceeds of which are then contributed to the capital of any Borrower (“Equity Cure Securities”) for cash consideration in an amount equal to (but not greater than) the amount needed to cure the applicable Financial Covenant Default (the “Financial Covenant Cure Amount”) no later than five (5) Business Days after the date on which financial statements and a Compliance Certificate as of and for the period ending on the applicable Testing Date are required to be delivered (the “Required Contribution Date”). Such Financial Covenant Cure Amount received by Borrower Representative shall be included in the calculation of Consolidated EBITDA solely for the purposes of determining compliance with the financial covenant in Section 5.22 at the end of the Fiscal Quarter in which such Financial Covenant Default occurred and any subsequent period that includes such Fiscal Quarter but shall be disregarded for purposes of the calculation of Consolidated EBITDA for all other purposes. To the extent any of the Net Proceeds of any Equity Cure Securities shall be used by any Borrower to prepay Term Loans, the portion of the Term Loans that is so prepaid will not be taken into account for purposes of determining actual compliance with the financial covenant in Section 5.22 for the Fiscal Quarter with respect to which the Financial Covenant Cure Amount is made. Net Proceeds of any Equity Cure Securities shall not be taken into account for cash netting purposes for the Fiscal Quarter with respect to which the Financial Covenant Cure Amount is made.
Equity Cure Securities. Upon receipt by Borrower of any Financial Covenant Cure in connection with a Specified Financial Covenant Default under Section 7.1(a) from the issuance of Equity Cure Securities in accordance with Section 7.2, Borrower shall prepay the outstanding principal amount of the Loans in accordance with Section 2.4(f) in an amount equal to such Financial Covenant Cure.
Equity Cure Securities. In the event the Companies deliver a Cure Notice, there shall be purchased common or preferred equity interests of (or cash equity capital contributions to) Holdings not constituting Disqualified Stock (“Equity Cure Securities”) for cash consideration in an amount specified by the Companies in the Cure Notice (the “Financial Covenant Cure Amount”) no later than ten (10) Business Days after the date on which financial statements and a Compliance Certificate as of and for the period ending on the applicable Testing Date are required to be delivered (the “Required Contribution Date”). The Financial Covenant Cure Amount shall be equal to the amount required to cause the Companies to be in compliance with the applicable Financial Covenant Default under this Agreement or the Senior Credit Agreement, as applicable (assuming that EBITDA as of the applicable Testing Date was increased by an amount equal to such Financial Covenant Cure Amount). Such Financial Covenant Cure Amount received by Holdings in cash, the contribution of such cash proceeds to any Company (whether as a contribution in respect of existing equity securities or purchase price in respect of new equity securities by a Company) and the receipt by Senior Debt Agent of a mandatory prepayment in like amount pursuant to Section 2.10.2(a)(ii) of the Senior Credit Agreement to the extent resulting out of the purchase of Equity Cure Securities under Section 8.3.2 of the Senior Credit Agreement (or, following the “Discharge of Senior Obligations” (as defined in the Intercreditor Agreement), by Agent of a mandatory prepayment in like amount pursuant to Section 2.3.2(a)(ii) hereof to the extent resulting out of the purchase of Equity Cure Securities under this Section 8.3.2) on or prior to the Required Contribution Date shall be deemed to have increased EBITDA as of the applicable Testing Date and any subsequent Computation Period that includes the Testing Date solely for the purposes of determining compliance with the financial covenants contained in Sections 7.14.1 and 7.14.4 of this Agreement and Sections 7.14.1 and 7.14.4 of the Senior Credit Agreement at the applicable Testing Date and any subsequent Computation Period that includes the Testing Date, but shall be disregarded for all other purposes hereunder. For purposes of determining compliance with the covenants contained in Sections 7.14.1 and 7.14.4 of this Agreement and Sections 7.14.1 and 7.14.4 of the Senior Credit Agreement, the principal amoun...
Equity Cure Securities. In the event Borrower delivers a Cure Notice, there shall be purchased equity interests (which shall be common equity, preferred equity of the type outstanding on the Closing Date, or equity on terms reasonably acceptable to Lender) of Borrower for cash consideration in an amount equal to the amount necessary to cure the applicable Financial Covenant Defaults (the “Financial Covenant Cure Amount”) after the applicable Testing Date but prior to the date that is no later than ten (10) Business Days after the date on which financial statements and a Compliance Certificate for the period ending on the last day of the fiscal quarter with respect to which such Financial Covenant Default occurred are required to be delivered. Such Financial Covenant Cure Amount received by Borrower shall be included in the calculation of Consolidated Capitalization or EBITDA, as applicable, solely for the purposes of determining compliance with the financial covenants in Section 7.12 at the end of the fiscal quarter in which such Financial Covenant Default occurred and any subsequent period that includes such fiscal quarter but shall be disregarded for purposes of the calculation of Consolidated Capitalization or EBITDA, as applicable, for all other purposes. Until timely receipt of the Financial Covenant Cure Amount,