Financial Covenant Cure. Notwithstanding anything to the contrary set forth in Section 10.5(a) hereof, in the event Borrowers fail to comply with the maximum Total Net Leverage Ratio covenant contained in Section 6.5(c) hereof (a “Specified Financial Covenant Default”), Borrowers shall have the right to cure such Specified Financial Covenant Default on the following terms and conditions (the “Cure Right”): (a) In the event Borrowers desire to cure a Specified Financial Covenant Default, Borrowing Agent shall deliver to the Agent irrevocable written notice of its intent to cure such Specified Financial Covenant Default (a “Cure Notice”) no later than three (3) days after the date on which the financial statements and Compliance Certificate for the period ending on the last day of the fiscal quarter with respect to which such Specified Financial Covenant Default occurred (the “Testing Date”) are required to be delivered. The Cure Notice shall set forth the calculation of the applicable Specified Financial Covenant Cure Amount (as hereinafter defined). (b) In the event that Borrowing Agent delivers a Cure Notice to Agent, then no later than ten (10) Business Days after the date on which the financial statements and Compliance Certificate for the period ending on the Testing Date are required to be delivered, Borrowing Agent shall deliver to Agent evidence of the receipt by Quantum of the Net Cash Proceeds from the issuance by Quantum of its Equity Interests in an amount equal to at least the amount which would result in Borrowers being in pro forma compliance with the Total Net Leverage Ratio covenant as of such Testing Date (the “Specified Financial Covenant Cure Amount”), which Specified Financial Covenant Cure Amount shall be deemed to be a dollar-for-dollar increase to the amount of EBITDA for the fiscal quarter ending on such Testing Date and for any subsequent measurement period that includes such fiscal quarter (which increase to EBITDA shall be deemed to have occurred solely for purposes of determining compliance with the Total Net Leverage Ratio covenant in Section 6.5(c) hereof, and not for any other purposes with respect to which EBITDA is calculated under this Agreement). (c) The Cure Right shall not be exercised (i) in two (2) consecutive fiscal quarters, (ii) more than two (2) times in any four (4) consecutive fiscal quarters, or (iii) more than four (4) times during the Term. (d) Upon timely receipt by any Loan Party in cash of the amount which would result in Borrowers being in pro forma compliance with the financial covenant which is the subject of the applicable Specified Financial Covenant Default as of such Testing Date, such Specified Financial Covenant Default shall be deemed cured.
Appears in 2 contracts
Samples: Revolving Credit and Security Agreement (Quantum Corp /De/), Revolving Credit and Security Agreement (Quantum Corp /De/)
Financial Covenant Cure. Notwithstanding anything (a) Subject to the contrary limitations set forth in clauses (b) through (e) below, Borrower may cure (and shall be deemed to have cured) an Event of Default arising out of a breach of the financial covenant set forth in Section 10.5(a) hereof, in 7 (the event Borrowers fail to comply with the maximum Total Net Leverage Ratio covenant contained in Section 6.5(c) hereof (a “Specified Financial Covenant Default”), Borrowers shall have the right to cure such Specified Financial Covenant Default on the following terms and conditions (the “Cure Right”):
(a) In the event Borrowers desire to cure a Specified Financial Covenant Default, Borrowing Agent shall deliver to the Agent irrevocable written notice of its intent to cure such Specified Financial Covenant Default (a “Cure NoticeCovenant”) no later than three if they receive the cash proceeds of a Curative Investment on or before the date that is 1 Business Day after the date that is the earlier to occur of (3i) days after the date on which the financial statements and Compliance Certificate for the period ending on the last day is delivered to Agent in respect of the fiscal quarter month with respect to which any such Specified Financial Covenant Default breach occurred (the “Testing DateSpecified Financial Month”), and (ii) are the date on which the Compliance Certificate is required to be delivered. The Cure Notice shall set forth the calculation delivered to Agent pursuant to this Agreement in respect of the applicable Specified Financial Covenant Cure Amount Month (such earlier date, the “Financial Statement Delivery Date”); provided, that Borrowers’ right to so cure an Event of Default shall be contingent on their timely delivery of such Compliance Certificate and financial statements for the Specified Fiscal Month as hereinafter defined)required under this Agreement.
(b) In Borrower shall promptly notify Agent of its receipt of any proceeds of Curative Investment (and shall immediately apply the event that Borrowing Agent delivers a Cure Notice same to Agent, then no later than ten the repayment of the Revolving Loans (10) Business Days after as defined in the ABL Loan Agreement as in effect on the date on which the financial statements and Compliance Certificate for the period ending on the Testing Date are required to be delivered, Borrowing Agent shall deliver to Agent evidence of the receipt by Quantum of the Net Cash Proceeds from the issuance by Quantum of its Equity Interests in an amount equal to at least the amount which would result in Borrowers being in pro forma compliance with the Total Net Leverage Ratio covenant as of such Testing Date (the “Specified Financial Covenant Cure Amount”), which Specified Financial Covenant Cure Amount shall be deemed to be a dollar-for-dollar increase to the amount of EBITDA for the fiscal quarter ending on such Testing Date and for any subsequent measurement period that includes such fiscal quarter (which increase to EBITDA shall be deemed to have occurred solely for purposes of determining compliance with the Total Net Leverage Ratio covenant in Section 6.5(c) hereof, and not for any other purposes with respect to which EBITDA is calculated under this Agreement).
(c) The Cure Right Any investment of Curative Investment shall not be exercised in immediately available funds and, subject to the limitations set forth in clause (ie) below, shall be in two (2) consecutive fiscal quartersan amount that is sufficient to cause Excess Availability, (ii) more than two (2) times in any four (4) consecutive fiscal quarters, or (iii) more than four (4) times during after application of such curative Investment to repay the TermRevolving Loans.
(d) Upon timely receipt delivery of a certificate by any Loan Party in cash Borrowers to Agent as to the amount of the proceeds of such Curative Investment and that such amount which would (i) has been applied in accordance with clause (b) above, and (ii) is in an amount equal to or greater than the amount required by clause (c) above, then any Event of Default that occurred and is continuing from a breach of the Specified Financial Covenant shall be deemed cured with no further action required by Agent or any of the Lenders. Prior to the date of the delivery of a certificate conforming to the requirements of this Section, any Event of Default that has occurred as a result of a breach of the Specified Financial Covenants shall be deemed to be continuing. In the event Borrower does not cure all financial covenant violations as provided in Borrowers being this Section 7.4, the existing Event of Default shall continue unless waived in pro forma writing by the Required Lenders in accordance herewith.
(e) Notwithstanding anything to the contrary contained in the foregoing or this Agreement, (i) Borrower’s rights under this Section 7.4 (A) may be exercised not more than 2 times during the term of this Agreement, (B) may not be exercised if the amount of the proposed investment of Curative Investment exceeds $750,000, (C) may not be exercised if the amount of the proposed investment of Curative Investment, together with the amount of all prior investments of Curative Investment, exceeds $1,500,000, and (D) may not be exercised after June 30, 2016 and (ii) the Curative Investment contributed shall be no greater than the amount required to cause Borrower to have Excess Availability of at least $4,750,000, after application of such Curative Investment to repay the Revolving Loans under the ABL Loan Agreement, and to be in compliance with the financial covenant which is the subject of the applicable Specified Financial Covenant Default as at the end of such Testing Date, such Specified Financial Covenant Default shall be deemed cured.fiscal month
Appears in 1 contract
Financial Covenant Cure. Notwithstanding anything to the contrary set forth in Section 10.5(a) hereof, in the event Borrowers fail to comply with the maximum Total Net Leverage Ratio covenant contained in Section 6.5(c) hereof (a “Specified Financial Covenant Default”), Borrowers shall have the right to cure such Specified Financial Covenant Default on the following terms and conditions (the “Cure Right”):
(a) In If, as at the event Borrowers desire date on which it is required to cure deliver a Specified Financial Covenant DefaultCompliance Certificate pursuant to Clause 21.2 (Compliance Certificate), Borrowing Agent shall deliver to the Agent irrevocable written notice Company is in breach of its intent obligations under Clause 22.2 (Financial condition), it may elect to cure prepay Utilisations in order to remedy any such Specified Financial Covenant Default breach where such prepayment is funded in accordance with paragraph (a “Cure Notice”c) no later than three below provided that: (3i) days after the Company shall confirm on the date on which the financial statements and relevant Compliance Certificate is required to be delivered that it intends to remedy such breach in accordance with this Clause 22.4; and (ii) any such prepayment shall be made within 30 Business Days of the date on which the relevant Compliance Certificate was required to be delivered.
(b) Immediately after a prepayment pursuant to paragraph (a) above, the financial covenants set out in Clause 22.2 (Financial condition) shall be retested as at the relevant date on which the Company was required to deliver the Compliance Certificate but on a pro forma basis as though:
(i) for the period ending purpose of calculating Debt Cover, the amount applied in prepayment had reduced Consolidated Total Net Debt or Consolidated Total Debt (as applicable) on the last day of the fiscal quarter Relevant Period with respect to which such Specified Financial Covenant Default occurred Debt Cover being recalculated accordingly; and
(ii) for the “Testing Date”purpose of calculating Interest Cover, the amount applied in prepayment had reduced Borrowings (on a weighted average basis) are required to be delivered. The Cure Notice shall set forth on the calculation first day of the applicable Specified Financial Covenant Cure Amount (as hereinafter defined).
(b) In Relevant Period with Interest Cover being recalculated accordingly, and the event that Borrowing Agent delivers a Cure Notice to Agent, then no later than ten (10) Business Days after the date on which the financial statements and Compliance Certificate for the period ending on the Testing Date are required to be delivered, Borrowing Agent shall deliver to Agent evidence results of the receipt by Quantum retest shall apply for determining whether there has been a breach of the Net Cash Proceeds from the issuance by Quantum of its Equity Interests in an amount equal to Clause 22.2 (Financial condition) as at least the amount which would result in Borrowers being in pro forma compliance with the Total Net Leverage Ratio covenant as of such Testing Date (the “Specified Financial Covenant Cure Amount”), which Specified Financial Covenant Cure Amount shall be deemed to be a dollar-for-dollar increase to the amount of EBITDA for the fiscal quarter ending on such Testing Date and for any subsequent measurement period that includes such fiscal quarter (which increase to EBITDA shall be deemed to have occurred solely for purposes of determining compliance with the Total Net Leverage Ratio covenant in Section 6.5(c) hereof, and not for any other purposes with respect to which EBITDA is calculated under this Agreement)date.
(c) The Cure Right shall not Any prepayment pursuant to paragraph (a) above may be exercised funded from the proceeds of: (i) in two (2) consecutive fiscal quarters, additional equity issued by the Company to its shareholders; or (ii) more than two subordinated loans advanced to the Company by such shareholders which are subordinated to the Facility on terms satisfactory to the Agent (2) times in any four (4) consecutive fiscal quarters, or (iii) more than four (4) times during the Termacting reasonably).
(d) Upon timely receipt by any Loan Party in cash of the amount which would result in Borrowers being in pro forma compliance with the financial covenant which is the subject of the applicable Specified Financial Covenant Default as of such Testing Date, such Specified Financial Covenant Default shall be deemed cured.
Appears in 1 contract
Financial Covenant Cure. Notwithstanding anything to the contrary set forth contained in Section 10.5(a) hereofthis Article VII, in the event Borrowers that Holdings and the Borrower fail (or, but for the operation of this paragraph, would fail) to comply with the maximum Total Net Leverage Ratio covenant contained in requirements of Section 6.5(c) hereof 6.10 (a the “Specified Financial Covenant DefaultCovenants”), Borrowers Holdings shall have the right from the date of delivery of a Notice of Intent to cure Cure with respect to the fiscal quarter most recently ended for which financial results have been provided under Section 5.01(a) or 5.01(b) and until 10 Business Days after the Compliance Certificate is required to be delivered thereunder, to issue Permitted Cure Securities to any Parent Entity for cash or otherwise receive cash contributions from any Parent Entity to the capital of Holdings, and, in each case, to contribute any such Specified Financial Covenant Default on cash to the following terms and conditions capital of the Borrower (collectively, the “Cure Right”):), and upon the receipt by Holdings of such cash (the “Cure Amount”) pursuant to the exercise by Holdings of such Cure Right, the Financial Covenants shall be recalculated giving effect to the following pro forma adjustments:
(a) In the event Borrowers desire to cure a Specified Financial Covenant Default, Borrowing Agent Consolidated EBITDA shall deliver to the Agent irrevocable written notice of its intent to cure such Specified Financial Covenant Default (a “Cure Notice”) no later than three (3) days after the date on which the financial statements and Compliance Certificate for the period ending on the last day of the fiscal quarter be increased with respect to which such Specified Financial Covenant Default occurred (the “Testing Date”) are required to be delivered. The Cure Notice shall set forth the calculation of the applicable Specified Financial Covenant Cure Amount (as hereinafter defined).
(b) In the event fiscal quarter and any four fiscal quarter period that Borrowing Agent delivers a Cure Notice to Agentcontains such fiscal quarter, then no later than ten (10) Business Days after the date on which the financial statements and Compliance Certificate solely for the period ending on purpose of measuring the Testing Date are required to be deliveredFinancial Covenants and not for any other purpose under this Agreement, Borrowing Agent shall deliver to Agent evidence of the receipt by Quantum of the Net Cash Proceeds from the issuance by Quantum of its Equity Interests in an amount equal to at least the amount which would result Cure Amount; (b) if, after giving effect to the foregoing recalculations, Holdings shall then be in Borrowers being in pro forma compliance with the Total Net Leverage Ratio covenant as requirements of such Testing Date (the “Specified Financial Covenant Cure Amount”)Covenants, which Specified Financial Covenant Cure Amount shall be deemed to be a dollar-for-dollar increase to the amount of EBITDA for the fiscal quarter ending on such Testing Date and for any subsequent measurement period that includes such fiscal quarter (which increase to EBITDA then Holdings shall be deemed to have satisfied the requirements of the Financial Covenants 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 any Financial Covenant that had occurred solely shall be deemed cured for the purposes of this Agreement; and (c) to the extent a fiscal quarter ended for which a Financial Covenant was initially recalculated as a result of a Cure Right and such fiscal quarter is included in the calculation of a Financial Covenant in a subsequent fiscal quarter, the Cure Amount shall be included in Consolidated EBITDA of such initial fiscal quarter for purposes of determining compliance with calculating the Total Net Leverage Ratio covenant in Section 6.5(c) hereofFinancial Covenants. Notwithstanding anything herein to the contrary, and not for any other purposes with respect to which EBITDA is calculated under this Agreement).
(c) The Cure Right shall not be exercised (i) in two (2) each four consecutive fiscal quartersquarter period there shall be at least two fiscal quarters in respect of which the Cure Right is not exercised, (ii) there shall be no more than two (2) times a total of five Cure Rights in any four (4) consecutive fiscal quartersthe aggregate exercised after the Effective Date, or (iii) more for purposes of this paragraph, the Cure Amount shall be no greater than four (4) times during the Term.
(d) Upon timely receipt by any Loan Party in cash of the amount required for purposes of complying with the Financial Covenants, determined at the time the Cure Right is exercised with respect to the fiscal quarter ended for which would a Financial Covenant was initially recalculated as a result in Borrowers being of a Cure Right, and (iv) Cure Amounts shall not result in pro forma compliance with reduction in Indebtedness for purposes of calculating the financial covenant which Financial Covenants for the most recently ended fiscal quarter; provided, that if such Cure Amount is the subject of the applicable Specified Financial Covenant Default as of such Testing Dateapplied to prepay indebtedness, such Specified Financial Covenant Default shall indebtedness in subsequent quarters may be deemed curedreduced.
Appears in 1 contract
Financial Covenant Cure. Notwithstanding anything to the contrary set forth in Section 10.5(a) hereof, in the event Borrowers fail to comply with the maximum Total Net Leverage Ratio covenant contained in Section 6.5(c) hereof (a “Specified Financial Covenant Default”), Borrowers shall have the right to cure such Specified Financial Covenant Default on the following terms and conditions (the “Cure Right”):
(a) In the event Borrowers desire to cure a Specified Financial Covenant Default, Borrowing Agent shall deliver to the Agent irrevocable written notice of its intent to cure such Specified Financial Covenant Default (a “Cure Notice”) no later than three (3) days after the date on which the financial statements and Compliance Certificate for the period ending on the last day of the fiscal quarter with respect to which such Specified Financial Covenant Default occurred (the “Testing Date”) are required to be delivered. The Cure Notice shall set forth the calculation of the applicable Specified Financial Covenant Cure Amount (as hereinafter defined).
(b) In the event that Borrowing Agent delivers a Cure Notice to Agent, then no later than ten (10) Business Days after the date on which the financial statements and Compliance Certificate for the period ending on the Testing Date are required to be delivered, Borrowing Agent shall deliver to Agent evidence of the receipt by Quantum of the Net Cash Proceeds from the issuance by Quantum of its Equity Interests (excluding Net Cash Proceeds from Qualified Contributions) in an amount equal to at least the amount which would result in Borrowers being in pro forma compliance with the Total Net Leverage Ratio covenant as of such Testing Date (the “Specified Financial Covenant Cure Amount”), which Specified Financial Covenant Cure Amount shall be deemed to be a dollar-for-dollar increase to the amount of EBITDA for the fiscal quarter ending on such Testing Date and for any subsequent measurement period that includes such fiscal quarter (which increase to EBITDA shall be deemed to have occurred solely for purposes of determining compliance with the Total Net Leverage Ratio covenant in Section 6.5(c) hereof, and not for any other purposes with respect to which EBITDA is calculated under this Agreement).
(c) The Cure Right shall not be exercised (i) in two (2) consecutive fiscal quarters, (ii) more than two (2) times in any four (4) consecutive fiscal quarters, or (iii) more than four (4) times during the Term.
(d) Upon timely receipt by any Loan Party in cash of the amount which would result in Borrowers being in pro forma compliance with the financial covenant which is the subject of the applicable Specified Financial Covenant Default as of such Testing Date, such Specified Financial Covenant Default shall be deemed cured.
Appears in 1 contract
Samples: Revolving Credit and Security Agreement (Quantum Corp /De/)
Financial Covenant Cure. Notwithstanding anything to the contrary set forth in Section 10.5(a) hereof, in the event Borrowers fail to comply with the maximum Total Net Leverage Ratio covenant or Total Leverage Ratio covenants contained in Section 6.5(c) or 6.5(d) hereof (a “Specified Financial Covenant Default”), Borrowers shall have the right to cure such Specified Financial Covenant Default on the following terms and conditions (the “Cure Right”):
(a) In the event Borrowers desire to cure a Specified Financial Covenant Default, Borrowing Agent shall deliver to the Agent irrevocable written notice of its intent to cure such Specified Financial Covenant Default (a “Cure Notice”) no later than three (3) days after the date on which the financial statements and Compliance Certificate for the period ending on the last day of the fiscal quarter with respect to which such Specified Financial Covenant Default occurred (the “Testing Date”) are required to be delivered. The Cure Notice shall set forth the calculation of the applicable Specified Financial Covenant Cure Amount (as hereinafter defined).
(b) In the event that Borrowing Agent delivers a Cure Notice to Agent, then no later than ten (10) Business Days after the date on which the financial statements and Compliance Certificate for the period ending on the Testing Date are required to be delivered, Borrowing Agent shall deliver to Agent evidence of the receipt by Quantum of the Net Cash Proceeds from the issuance by Quantum of its Equity Interests in an amount equal to at least the amount which would result in Borrowers being in pro forma compliance with the Total Net Leverage Ratio and/or Total Leverage Ratio covenant as of such Testing Date (the “Specified Financial Covenant Cure Amount”), which Specified Financial Covenant Cure Amount shall be deemed to be a dollar-for-dollar increase to the amount of EBITDA for the fiscal quarter ending on such Testing Date and for any subsequent measurement period that includes such fiscal quarter (which increase to EBITDA shall be deemed to have occurred solely for purposes of determining compliance with the Total Net Leverage Ratio covenant and Total Leverage Ratio covenants in Section 6.5(c) and 6.5(d) hereof, and not for any other purposes with respect to which EBITDA is calculated under this Agreement).
(c) The Cure Right shall not be exercised (i) in two (2) consecutive fiscal quarters, (ii) more than two (2) times in any four (4) consecutive fiscal quarters, or (iii) more than four (4) times during the Term.
(d) Upon timely receipt by any Loan Party in cash of the amount which would result in Borrowers being in pro forma compliance with the financial covenant which is the subject of the applicable Specified Financial Covenant Default as of such Testing Date, such Specified Financial Covenant Default shall be deemed cured.
Appears in 1 contract
Samples: Revolving Credit and Security Agreement (Quantum Corp /De/)
Financial Covenant Cure. Notwithstanding anything to the contrary set forth in Section 10.5(a) hereof, in the event Borrowers fail to comply with the maximum Total Net Leverage Ratio covenant or Total Leverage Ratio covenantscovenant contained in Section 6.5(c) or 6.5(d) hereof (a “Specified Financial Covenant Default”), Borrowers shall have the right to cure such Specified Financial Covenant Default on the following terms and conditions (the “Cure Right”):
(a) In the event Borrowers desire to cure a Specified Financial Covenant Default, Borrowing Agent shall deliver to the Agent irrevocable written notice of its intent to cure such Specified Financial Covenant Default (a “Cure Notice”) no later than three (3) days after the date on which the financial statements and Compliance Certificate for the period ending on the last day of the fiscal quarter with respect to which such Specified Financial Covenant Default occurred (the “Testing Date”) are required to be delivered. The Cure Notice shall set forth the calculation of the applicable Specified Financial Covenant Cure Amount (as hereinafter defined).
(b) In the event that Borrowing Agent delivers a Cure Notice to Agent, then no later than ten (10) Business Days after the date on which the financial statements and Compliance Certificate for the period ending on the Testing Date are required to be delivered, Borrowing Agent shall deliver to Agent evidence of the receipt by Quantum of the Net Cash Proceeds from the issuance by Quantum of its Equity Interests in an amount equal to at least the amount which would result in Borrowers being in pro forma compliance with the Total Net Leverage Ratio and/or Total Leverage Ratio covenant as of such Testing Date (the “Specified Financial Covenant Cure Amount”), which Specified Financial Covenant Cure Amount shall be deemed to be a dollar-for-dollar increase to the amount of EBITDA for the fiscal quarter ending on such Testing Date and for any subsequent measurement period that includes such fiscal quarter (which increase to EBITDA shall be deemed to have occurred solely for purposes of determining compliance with the Total Net Leverage Ratio covenant and Total Leverage Ratio covenantscovenant in Section 6.5(c) and 6.5(d) hereof, and not for any other purposes with respect to which EBITDA is calculated under this Agreement).
(c) The Cure Right shall not be exercised (i) in two (2) consecutive fiscal quarters, (ii) more than two (2) times in any four (4) consecutive fiscal quarters, or (iii) more than four (4) times during the Term.
(d) Upon timely receipt by any Loan Party in cash of the amount which would result in Borrowers being in pro forma compliance with the financial covenant which is the subject of the applicable Specified Financial Covenant Default as of such Testing Date, such Specified Financial Covenant Default shall be deemed cured.
Appears in 1 contract
Samples: Revolving Credit and Security Agreement (Quantum Corp /De/)
Financial Covenant Cure. Notwithstanding anything to the contrary set forth contained in Section 10.5(a) hereofSECTION 7.01, in the event that the Borrowers fail to comply with the maximum Total Net Leverage Ratio requirements of the covenant contained set forth in Section 6.5(c) hereof (a “Specified Financial Covenant Default”SECTION 6.10, then until the expiration of the 5th day subsequent to the date the relevant Compliance Certificate is required to be delivered pursuant to SECTION 5.01(d), the Borrowers shall have the right to cure such Specified Financial Covenant Default on the following terms and conditions issue common equity for cash or otherwise receive a cash capital contribution (the “Cure Right”):
(a) In ), and upon the event Borrowers desire to cure a Specified Financial Covenant Default, Borrowing Agent shall deliver to receipt by the Agent irrevocable written notice Lead Borrower of its intent to cure such Specified Financial Covenant Default (a “Cure Notice”) no later than three (3) days after the date on which the financial statements and Compliance Certificate for the period ending on the last day of the fiscal quarter with respect to which such Specified Financial Covenant Default occurred cash (the “Testing DateCure Amount”) are required pursuant to be delivered. The the exercise by the Borrowers of such Cure Notice shall set forth Right, the calculation of Consolidated EBITDA as used in the applicable Specified Financial Covenant Cure Amount (as hereinafter defined).covenant set forth in SECTION 6.10 shall be recalculated giving effect to the following pro forma adjustments:
(b) In the event that Borrowing Agent delivers a Cure Notice to Agent, then no later than ten (10) Business Days after the date on which the financial statements and Compliance Certificate i. Consolidated EBITDA shall be increased for the period ending on purposes of determining compliance with such financial covenant at the Testing Date are required to be delivered, Borrowing Agent shall deliver to Agent evidence end of the receipt by Quantum relevant period and each applicable subsequent periods which include such period, solely for the purpose of measuring the covenants set forth in SECTION 6.10 and not for any other purpose under this Agreement (including but not limited to determining the satisfaction of the Net Cash Proceeds from Payment Conditions, the issuance Restricted Payment Conditions, any financial ratio-based conditions, or amount of any covenant baskets or carve-outs), by Quantum of its Equity Interests in an amount equal to at least the amount which would result in Borrowers being in pro forma compliance with the Total Net Leverage Ratio covenant as of such Testing Date (the “Specified Financial Covenant Cure Amount”), which Specified Financial Covenant ; provided that the receipt by the Lead Borrower of the Cure Amount shall be deemed to be a dollar-for-dollar increase pursuant to the amount of EBITDA for the fiscal quarter ending on such Testing Date and for any subsequent measurement period that includes such fiscal quarter (which increase to EBITDA Cure Right shall be deemed to have occurred solely no other effect whatsoever under this Agreement and any reduction in Indebtedness, if applicable, from the Cure Amount shall not reduce Debt Service Charges for purposes purpose of determining calculating the Consolidated Fixed Charge Coverage Ratio;
ii. If, after giving effect to the foregoing recalculations, the Borrowers shall then be in compliance with the Total Net Leverage Ratio covenant requirements of the covenants set forth in Section 6.5(c) hereofSECTION 6.10, the Borrowers shall be deemed to have satisfied the requirements of the covenants set forth in SECTION 6.10 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 not the applicable breach or default of the covenants set forth in SECTION 6.10 that had occurred shall be deemed cured for any other the purposes with respect to which EBITDA is calculated under of this Agreement;
iii. Upon receipt by the Administrative Agent of written notice, prior to the expiration of the 5th day subsequent to the date the relevant Compliance Certificate is required to be delivered pursuant to SECTION 5.01(d)(the “Anticipated Cure Deadline”).
(c) The , that the Borrowers intend to exercise the Cure Right in respect of a Fiscal Month, the Lenders shall not be exercised permitted to accelerate Loans held by them or to exercise remedies against the Collateral on the basis of a failure to comply with the requirements of the covenants set forth in SECTION 6.10 until such failure is not cured pursuant to the exercise of the Cure Right on or prior to the Anticipated Cure Deadline (but the failure to so comply pending the receipt of the Cure Amount shall constitute a Default and the Lenders and the Issuing Banks shall not be obligated to fund any Revolving Credit Loans or issue any Letter of Credit until receipt by the Lead Borrower of the Cure Amount); and
iv. Notwithstanding anything herein to the contrary, (i) in two each twelve-Fiscal Month period, there shall be at least six (26) consecutive fiscal quartersFiscal Months in respect of which the Cure Right is not exercised, (ii) there can be no more than two eight (2) times 8) Fiscal Months in any four (4) consecutive fiscal quartersrespect of which the Cure Right is exercised during the term of this Agreement, or and (iii) more for purposes of this SECTION 7.04, the Cure Amount utilized shall be no greater than four (4) times during the Term.
(d) Upon timely receipt by any Loan Party in cash of the amount which would result in Borrowers being in pro forma compliance required for purposes of complying with the financial covenant which is the subject of the applicable Specified Financial Covenant Default as of such Testing Date, such Specified Financial Covenant Default shall be deemed curedcovenants set forth in SECTION 6.10.
Appears in 1 contract
Financial Covenant Cure. Notwithstanding anything (a) Subject to the contrary limitations set forth in clauses (b) through (e) below, Borrower may cure (and shall be deemed to have cured) an Event of Default arising out of a breach of the financial covenant set forth in Section 10.5(a) hereof, in 7 (the event Borrowers fail to comply with the maximum Total Net Leverage Ratio covenant contained in Section 6.5(c) hereof (a “Specified Financial Covenant Default”), Borrowers shall have the right to cure such Specified Financial Covenant Default on the following terms and conditions (the “Cure Right”):
(a) In the event Borrowers desire to cure a Specified Financial Covenant Default, Borrowing Agent shall deliver to the Agent irrevocable written notice of its intent to cure such Specified Financial Covenant Default (a “Cure NoticeCovenant”) no later than three if they receive the cash proceeds of a Curative Investment on or before the date that is 1 Business Day after the date that is the earlier to occur of (3i) days after the date on which the financial statements and Compliance Certificate for the period ending on the last day is delivered to Agent in respect of the fiscal quarter month with respect to which any such Specified Financial Covenant Default breach occurred (the “Testing DateSpecified Financial Month”), and (ii) are the date on which the Compliance Certificate is required to be delivered. The Cure Notice shall set forth the calculation delivered to Agent pursuant to this Agreement in respect of the applicable Specified Financial Covenant Cure Amount Month (such earlier date, the “Financial Statement Delivery Date”); provided, that Borrowers’ right to so cure an Event of Default shall be contingent on their timely delivery of such Compliance Certificate and financial statements for the Specified Fiscal Month as hereinafter defined)required under this Agreement.
(b) In Borrower shall promptly notify Agent of its receipt of any proceeds of Curative Investment (and shall immediately apply the event that Borrowing Agent delivers a Cure Notice same to Agent, then no later than ten the repayment of the Revolving Loans (10) Business Days after as defined in the ABL Loan Agreement as in effect on the date on which the financial statements and Compliance Certificate for the period ending on the Testing Date are required to be delivered, Borrowing Agent shall deliver to Agent evidence of the receipt by Quantum of the Net Cash Proceeds from the issuance by Quantum of its Equity Interests in an amount equal to at least the amount which would result in Borrowers being in pro forma compliance with the Total Net Leverage Ratio covenant as of such Testing Date (the “Specified Financial Covenant Cure Amount”), which Specified Financial Covenant Cure Amount shall be deemed to be a dollar-for-dollar increase to the amount of EBITDA for the fiscal quarter ending on such Testing Date and for any subsequent measurement period that includes such fiscal quarter (which increase to EBITDA shall be deemed to have occurred solely for purposes of determining compliance with the Total Net Leverage Ratio covenant in Section 6.5(c) hereof, and not for any other purposes with respect to which EBITDA is calculated under this Agreement).
(c) The Cure Right Any investment of Curative Investment shall not be exercised in immediately available funds and, subject to the limitations set forth in clause (ie) below, shall be in two (2) consecutive fiscal quartersan amount that is sufficient to cause Excess Availability, (ii) more than two (2) times in any four (4) consecutive fiscal quarters, or (iii) more than four (4) times during after application of such curative Investment to repay the TermRevolving Loans.
(d) Upon timely receipt delivery of a certificate by any Loan Party in cash Borrowers to Agent as to the amount of the proceeds of such Curative Investment and that such amount which would (i) has been applied in accordance with clause (b) above, and (ii) is in an amount equal to or greater than the amount required by clause (c) above, then any Event of Default that occurred and is continuing from a breach of the Specified Financial Covenant shall be deemed cured with no further action required by Agent or any of the Lenders. Prior to the date of the delivery of a certificate conforming to the requirements of this Section, any Event of Default that has occurred as a result of a breach of the Specified Financial Covenant shall be deemed to be continuing. In the event Borrower does not cure all financial covenant violations as provided in Borrowers being this Section 7.4, the existing Event of Default shall continue unless waived in pro forma writing by the Required Lenders in accordance herewith.
(e) Notwithstanding anything to the contrary contained in the foregoing or this Agreement, (i) Borrower’s rights under this Section 7.4 (A) may be exercised not more than 2 times during the term of this Agreement, (B) may not be exercised if the amount of the proposed investment of Curative Investment exceeds $750,000, (C) may not be exercised if the amount of the proposed investment of Curative Investment, together with the amount of all prior investments of Curative Investment, exceeds $1,500,000, and (D) may not be exercised after June 30, 2016 and (ii) the Curative Investment contributed shall be no greater than the amount required to cause Borrower to have Excess Availability of at least $4,750,,000, after application of such Curative Investment to repay the Revolving Loans under the ABL Loan Agreement, and to be in compliance with the financial covenant which is the subject of the applicable Specified Financial Covenant Default as at the end of such Testing Date, such Specified Financial Covenant Default shall be deemed curedfiscal month.
Appears in 1 contract
Financial Covenant Cure. Notwithstanding anything to the contrary set forth contained in Section 10.5(a) hereofSECTION 7.01,Section 7.01, in the event that the Borrowers fail to comply with the maximum Total Net Leverage Ratio requirements of the covenant contained set forth in Section 6.5(c) hereof (a “Specified Financial Covenant Default”SECTION 6.10,Section 6.10, then until the expiration of the 5th day subsequent to the date the relevant Compliance Certificate is required to be delivered pursuant to SECTIONSection 5.01(d), the Borrowers shall have the right to cure such Specified Financial Covenant Default on the following terms and conditions issue common equity for cash or otherwise receive a cash capital contribution (the “Cure Right”):
(a) In ), and upon the event Borrowers desire to cure a Specified Financial Covenant Default, Borrowing Agent shall deliver to receipt by the Agent irrevocable written notice Lead Borrower of its intent to cure such Specified Financial Covenant Default (a “Cure Notice”) no later than three (3) days after the date on which the financial statements and Compliance Certificate for the period ending on the last day of the fiscal quarter with respect to which such Specified Financial Covenant Default occurred cash (the “Testing DateCure Amount”) are required pursuant to be delivered. The the exercise by the Borrowers of such Cure Notice shall set forth Right, the calculation of Consolidated EBITDA as used in the applicable Specified Financial Covenant Cure Amount (as hereinafter defined).
(b) In covenant set forth in SECTIONSection 6.10 shall be recalculated giving effect to the event that Borrowing Agent delivers a Cure Notice to Agent, then no later than ten (10) Business Days after the date on which the financial statements and Compliance Certificate following pro forma adjustments: Consolidated EBITDA shall be increased for the period ending on purposes of determining compliance with such financial covenant at the Testing Date are required to be delivered, Borrowing Agent shall deliver to Agent evidence end of the receipt by Quantum relevant period and each applicable subsequent periods which include such period, solely for the purpose of measuring the covenants set forth in SECTIONSection 6.10 and not for any other purpose under this Agreement (including but not limited to determining the satisfaction of the Net Cash Proceeds from Payment Conditions, the issuance Restricted Payment Conditions, any financial ratio-based conditions, or amount of any covenant baskets or carve-outs), by Quantum of its Equity Interests in an amount equal to at least the amount which would result in Borrowers being in pro forma compliance with the Total Net Leverage Ratio covenant as of such Testing Date (the “Specified Financial Covenant Cure Amount”), which Specified Financial Covenant ; provided that the receipt by the Lead Borrower of the Cure Amount shall be deemed to be a dollar-for-dollar increase pursuant to the amount of EBITDA for the fiscal quarter ending on such Testing Date and for any subsequent measurement period that includes such fiscal quarter (which increase to EBITDA Cure Right shall be deemed to have occurred solely no other effect whatsoever under this Agreement and any reduction in Indebtedness, if applicable, from the Cure Amount shall not reduce Debt Service Charges for purposes purpose of determining calculating the Consolidated Fixed Charge Coverage Ratio; If, after giving effect to the foregoing recalculations, the Borrowers shall then be in compliance with the Total Net Leverage Ratio covenant requirements of the covenants set forth in Section 6.5(c) hereofSECTION 6.10,Section 6.10, the Borrowers shall be deemed to have satisfied the requirements of the covenants set forth in SECTION 6.10 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 not the applicable breach or default of the covenants set forth in SECTIONSection 6.10 that had occurred shall be deemed cured for any other the purposes with respect to which EBITDA is calculated under of this Agreement; Upon receipt by the Administrative Agent of written notice, prior to the expiration of the 5th day subsequent to the date the relevant Compliance Certificate is required to be delivered pursuant to SECTIONSection 5.01(d)(the “Anticipated Cure Deadline”).
(c) The , that the Borrowers intend to exercise the Cure Right in respect of a Fiscal Month, the Lenders shall not be exercised permitted to accelerate Loans held by them or to exercise remedies against the Collateral on the basis of a failure to comply with the requirements of the covenants set forth in SECTIONSection 6.10 until such failure is not cured pursuant to the exercise of the Cure Right on or prior to the Anticipated Cure Deadline (but the failure to so comply pending the receipt of the Cure Amount shall constitute a Default and the Lenders and the Issuing Banks shall not be obligated to fund any Revolving Credit Loans or issue any Letter of Credit until receipt by the Lead Borrower of the Cure Amount); and DB1/ 98023701.7 Notwithstanding anything herein to the contrary, (i) in two each twelve-Fiscal Month period, there shall be at least six (26) consecutive fiscal quartersFiscal Months in respect of which the Cure Right is not exercised, (ii) there can be no more than two eight (2) times 8) Fiscal Months in any four (4) consecutive fiscal quartersrespect of which the Cure Right is exercised during the term of this Agreement, or and (iii) more for purposes of this SECTION 7.04,Section 7.04, the Cure Amount utilized shall be no greater than four (4) times during the Term.
(d) Upon timely receipt by any Loan Party in cash of the amount which would result in Borrowers being in pro forma compliance required for purposes of complying with the financial covenant which is the subject of the applicable Specified Financial Covenant Default as of such Testing Date, such Specified Financial Covenant Default shall be deemed cured.covenants set forth in SECTION 6.10.Section 6.10. DB1/ 98023701.7 ARTICLE VIIIARTICLE VIII The AgentsTHE AGENTS
Appears in 1 contract
Financial Covenant Cure. Notwithstanding anything to the contrary set forth contained in Section 10.5(a) hereof7.01, in the event that the Borrowers fail to comply with the maximum Total Net Leverage Ratio requirements of the covenant contained set forth in Section 6.5(c) hereof (a “Specified Financial Covenant Default”6.10, then until the expiration of the 5th day subsequent to the date the relevant Compliance Certificate is required to be delivered pursuant to Section 5.01(d), the Borrowers shall have the right to cure such Specified Financial Covenant Default on the following terms and conditions issue common equity for cash or otherwise receive a cash capital contribution (the “Cure Right”):), and upon the receipt by the Lead Borrower of such cash (the “Cure Amount”) pursuant to the exercise by the Borrowers of such Cure Right, the calculation of Consolidated EBITDA as used in the covenant set forth in Section 6.10 shall be recalculated giving effect to the following pro forma adjustments:
(a) In the event Borrowers desire to cure a Specified Financial Covenant Default, Borrowing Agent Consolidated EBITDA shall deliver to the Agent irrevocable written notice of its intent to cure such Specified Financial Covenant Default (a “Cure Notice”) no later than three (3) days after the date on which the financial statements and Compliance Certificate be increased for the period ending on purposes of determining compliance with such financial covenant at the last day end of the fiscal quarter with respect to relevant period and each applicable subsequent periods which include such Specified Financial Covenant Default occurred (period, solely for the “Testing Date”) are required to be delivered. The Cure Notice shall purpose of measuring the covenants set forth in Section 6.10 and not for any other purpose under this Agreement (including but not limited to determining the calculation satisfaction of the applicable Specified Financial Covenant Cure Amount (as hereinafter definedPayment Conditions, any financial ratio-based conditions, or amount of any covenant baskets or carve-outs).
(b) In the event that Borrowing Agent delivers a Cure Notice to Agent, then no later than ten (10) Business Days after the date on which the financial statements and Compliance Certificate for the period ending on the Testing Date are required to be delivered, Borrowing Agent shall deliver to Agent evidence of the receipt by Quantum of the Net Cash Proceeds from the issuance by Quantum of its Equity Interests in an amount equal to at least the amount which would result in Borrowers being in pro forma compliance with the Total Net Leverage Ratio covenant as of such Testing Date (the “Specified Financial Covenant Cure Amount”), which Specified Financial Covenant ; provided that the receipt by the Lead Borrower of the Cure Amount shall be deemed to be a dollar-for-dollar increase pursuant to the amount of EBITDA for the fiscal quarter ending on such Testing Date and for any subsequent measurement period that includes such fiscal quarter (which increase to EBITDA Cure Right shall be deemed to have occurred solely no other effect whatsoever under this Agreement and any reduction in Indebtedness, if applicable, from the Cure Amount shall not reduce Debt Service Charges for purposes purpose of determining calculating the Consolidated Fixed Charge Coverage Ratio;
(b) If, after giving effect to the foregoing recalculations, the Borrowers shall then be in compliance with the Total Net Leverage Ratio covenant requirements of the covenants set forth in Section 6.5(c) hereof6.10, the Borrowers shall be deemed to have satisfied the requirements of the covenants set forth in SECTION 6.10 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 not the applicable breach or default of the covenants set forth in Section 6.10 that had occurred shall be deemed cured for any other the purposes with respect to which EBITDA is calculated under of this Agreement).;
(c) The Upon receipt by the Administrative Agent of written notice, prior to the expiration of the 5th day subsequent to the date the relevant Compliance Certificate is required to be delivered pursuant to Section 5.01(d)(the “Anticipated Cure Deadline”), that the Borrowers intend to exercise the Cure Right in respect of a Fiscal Month, the Lenders shall not be exercised permitted to accelerate Loans held by them or to exercise remedies against the Collateral on the basis of a failure to comply with the requirements of the covenants set forth in Section 6.10 until such failure is not cured pursuant to the exercise of the Cure Right on or prior to the Anticipated Cure Deadline (but the failure to so comply pending the receipt of the Cure Amount shall constitute a Default and the Lenders and the Issuing Banks shall not be obligated to fund any Revolving Credit Loans or issue any Letter of Credit until receipt by the Lead Borrower of the Cure Amount); and
(d) Notwithstanding anything herein to the contrary, (i) in two each twelve-Fiscal Month period, there shall be at least six (26) consecutive fiscal quartersFiscal Months in respect of which the Cure Right is not exercised, (ii) there can be no more than two eight (2) times 8) Fiscal Months in any four (4) consecutive fiscal quartersrespect of which the Cure Right is exercised during the term of this Agreement, or and (iii) more for purposes of this Section 7.04, the Cure Amount utilized shall be no greater than four (4) times during the Term.
(d) Upon timely receipt by any Loan Party in cash of the amount which would result in Borrowers being in pro forma compliance required for purposes of complying with the financial covenant which is the subject of the applicable Specified Financial Covenant Default as of such Testing Date, such Specified Financial Covenant Default shall be deemed curedcovenants set forth in Section 6.10.
Appears in 1 contract
