Qualified Government Debt Clause Samples
The Qualified Government Debt clause defines the criteria under which certain government-issued debt instruments are recognized as acceptable or eligible within the context of the agreement. Typically, this clause specifies the types of government securities that qualify, such as those issued by stable, highly rated governments, and may set requirements regarding maturity, currency, or credit rating. By clearly outlining what constitutes qualified government debt, the clause ensures that only secure and reliable government obligations are used for purposes like collateral, investment, or compliance, thereby reducing risk and promoting financial stability in the transaction.
Qualified Government Debt. Notwithstanding the restrictions in subsection (f) above, consent of the Administrative Agent and the Required Lenders shall not be required for the Loan Parties or their Subsidiaries to incur Debt for Borrowed Money to a Governmental Authority under the CARES Act or any other federal or state governmental program intended to mitigate the impact of the COVID-19 pandemic and negative international, national and industry economic effects resulting therefrom, so long as the Unencumbered Assets, the Equity Interests in the Initial Grantors and the Pledged Account and funds deposited therein do not become subject to any Liens in connection with such Debt for Borrowed Money (“Qualified Government Debt”); provided, however, that (x) 100% of the Net Cash Proceeds of any Qualified Government Debt shall be used, in the Borrower’s discretion, only (1) for Permitted Uses (2) for application to Senior Debt Prepayments in accordance with Section 2(d) and (y) Qualified Governmental Debt that is forgivable by its terms (subject to the satisfaction of or compliance with identifiable statutory and/or documentary conditions) shall be excluded from the calculations of the Section 5.04 financial covenants unless and to the extent such Qualified Governmental Debt is not forgiven within 180 days after the issuance thereof. Any income from the forgiveness of any such Qualified Government Debt shall not be included in the calculation of Consolidated EBITDA. The Loan Parties shall comply with terms of the relevant state or Federal laws and regulations, including the CARES Act (“Applicable Law”), in relation to the Qualified Government Debt (including regarding the use of proceeds thereof) and, if debt forgiveness is available under Applicable Law, the Loan Parties shall not act or fail to act in any manner that could impair the Qualified Government Debt being forgiven in accordance with Applicable Law. For purposes of this Amendment, the following terms shall have the following meanings:
Qualified Government Debt. Notwithstanding the restrictions in subsection (f) above, consent of the Administrative Agent and the Required Lenders shall not be required for the Loan Parties to incur Debt for borrowed money to a Governmental Authority under the CARES Act or any other federal or state governmental program intended to mitigate the impact of the COVID-19 pandemic so long as the Borrowing Base Assets and the Equity Interests in the Initial Grantors (as defined below) do not become subject to any Liens in connection with such Debt (“Qualified Government Debt”); provided, however, that 100% of the Net Cash Proceeds of any Qualified Government Debt shall be used, in the Borrower’s discretion, only for Permitted Uses or to repay the Obligations (as such term is defined in each of the Facility and the Other Facilities) under the Facility and the Other Facilities. For purposes of this Amendment, the following terms shall have the following meanings:
Qualified Government Debt. The Loan Parties shall comply with terms of the Applicable Law in relation to the Qualified Government Debt (including regarding the use of proceeds thereof) and, if debt forgiveness is available under Applicable Law, the Loan Parties shall not act or fail to act in any manner that could impair the Qualified Government Debt being forgiven in accordance with Applicable Law.