Effectiveness of Certain Covenants Clause Samples

The "Effectiveness of Certain Covenants" clause defines when specific promises or obligations within an agreement become legally binding and enforceable. Typically, this clause clarifies whether certain covenants take effect immediately upon signing, only after closing, or at another specified milestone. For example, confidentiality or non-compete obligations might begin at signing, while operational covenants may only apply after the transaction closes. The core function of this clause is to provide clarity and prevent disputes by specifying the exact timing of when each party's obligations commence.
Effectiveness of Certain Covenants. Beginning on the first day (a) the Notes have achieved Investment Grade Status and (b) no Default or Event of Default has occurred and is continuing under this Indenture, and ending on a Reversion Date (such period a “Suspension Period”), the Company and its Restricted Subsidiaries will not be subject to Sections 3.2, 3.3, 3.4, 3.5, 3.7, 3.8 and 4.1(a)(3) (the “Suspended Covenants”). If at any time the Notes cease to have such Investment Grade Status, then the Suspended Covenants shall thereafter be reinstated as if such covenants had never been suspended (the “Reversion Date”) and be applicable pursuant to the terms of this Indenture (including in connection with performing any calculation or assessment to determine compliance with the terms of this Indenture), unless and until the Notes subsequently attain Investment Grade Status and no Event of Default has occurred and is continuing (in which event the Suspended Covenants shall no longer be in effect for such time that the Notes maintain an Investment Grade Status); provided, however, that no Default, Event of Default or breach of any kind shall be deemed to exist under this Indenture, the Notes or the Note Guarantees with respect to the Suspended Covenants based on, and none of the Company or any of its Subsidiaries shall bear any liability for, any actions taken or events occurring during the Suspension Period, or any actions taken at any time pursuant to any contractual obligation arising prior to the Reversion Date, regardless of whether such actions or events would have been permitted if the applicable Suspended Covenants remained in effect during such period. On the Reversion Date, all Indebtedness Incurred during the Suspension Period will be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under Section 3.2(b)(4)(b). On and after the Reversion Date, all Liens created during the Suspension Period will be considered Permitted Liens. Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 3.3 will be made as though Section 3.3 had been in effect since the Issue Date and prior to, but not during, the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period will not reduce the amount available to be made as Restricted Payments under Section 3.3(a). On the Reversion Date, the amount of Excess Proceeds shall be reset at zero. Any Affiliate Transaction entered into after the Re...
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Effectiveness of Certain Covenants. (a) If on any date following the Issue Date: (1) the Securities are rated Baa3 or better by ▇▇▇▇▇’▇ and BBB- or better by S&P (or, if either such entity ceases to rate the Securities for reasons outside of the control of the Company, the equivalent investment grade credit rating from any other “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by the Company as a replacement agency); and (2) no Default or Event of Default shall have occurred and be continuing, then, beginning on that day and subject to the provisions of the following paragraph, the provisions of this Indenture described under Sections 10.8, 10.9, 10.10, 10.12, 10.16, 10.17, paragraphs (a), (b) and (c) of Section 10.13 and clause (a)(iii) of Section 8.1 shall be suspended. (b) During any period that the foregoing covenants have been suspended, the Board of Directors of the Company may not designate any of the Company’s Subsidiaries as Unrestricted Subsidiaries pursuant to the definition of “Unrestricted Subsidiaries.” Notwithstanding the foregoing, if the rating assigned by either such rating agency should subsequently decline to below Baa3 or BBB-, respectively, the foregoing covenants shall be reinstated as of and from the date of such rating decline. Any Debt incurred during the period when the covenants are suspended shall be classified as having been incurred pursuant to paragraph (a) of Section 10.8 or one of the clauses of the paragraph (b) of such covenant. To the extent such Debt would not be so permitted to be incurred, such Debt shall be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under clause (iv) of paragraph (b) under Section 10.8. Calculations under the reinstated Section 10.9 shall be made as if Section 10.9 had been in effect since the Issue Date. However, no Default or Event of Default shall be deemed to have occurred as a result of any actions taken by the Company or its Restricted Subsidiaries during the period when the covenants are suspended.
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Effectiveness of Certain Covenants. If on any date following the date of this Indenture: (1) the Securities are rated Baa3 or better by ▇▇▇▇▇’▇ Investors Service, Inc. and BBB- or better by Standard & Poor’s Ratings Group, Inc. (or, if either such entity ceases to rate the notes for reasons outside of the control of the Company, the equivalent investment grade credit rating from any other nationally recognized statistical rating agency selected by the Company as a replacement agency); and (2) no Default or Event of Default shall have occurred and be continuing, then, beginning on that day and subject to the provisions of the following paragraph, the covenants specifically listed below will be suspended: (1) Section 3.2 hereof; (2) Section 3.3 hereof; (3) Section 3.4 hereof; (4) Section 3.5 hereof; (5) Section 3.8 hereof ; (6) Section 3.9 hereof; (7) Section 3.12 hereof; (8) clause (3) with respect to Section 4.1; (9) Section 3.13 hereof (but only with respect to the obligation to create future Subsidiary Guarantors); and
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Effectiveness of Certain Covenants. If on any date following the date of the indenture:
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Effectiveness of Certain Covenants. Notwithstanding any provision to the contrary contained in this Agreement or any other Transaction Document, none of the provisions in Sections 4(c), 4(g)(iv), 4(h), 4(i), 4(k), 4(m) and 4(n) shall be effective or otherwise apply to the Company or any of its subsidiaries or affiliates until such time as all of the Senior Secured Convertible Notes (as such term is defined in Convertible Debentures) have been fully paid and satisfied in accordance with their terms.”
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Effectiveness of Certain Covenants. If on any date following the date of this Indenture: (1) the Securities are rated Baa3 or better by ▇▇▇▇▇’▇ Investors Service, Inc. and BBB- or better by Standard & Poor’s Ratings Group, Inc. (or, if either such entity ceases to rate the notes for reasons outside of the control of the Company, the equivalent investment grade credit rating from any other nationally recognized statistical rating agency selected by the Company as a replacement agency); and (2) no Default or Event of Default shall have occurred and be continuing, then, beginning on that day and subject to the provisions of the following paragraph, the covenants specifically listed below will be suspended: (1) Section 3.2 hereof; (2) Section 3.3 hereof; (3) Section 3.4 hereof; (4) Section 3.5 hereof; (5) Section 3.8 hereof ; (6) Section 3.9 hereof; (7) Section 3.12 hereof; (8) clause (3) with respect to Section 4.1; (9) Section 3.13 hereof (but only with respect to the obligation to create future Subsidiary Guarantors); and (10) Section 3.10 hereof. Notwithstanding the foregoing, if the rating assigned by either such rating agency should subsequently decline to below Baa3 or BBB-, respectively, the foregoing covenants will be reinstituted as of and from the date of such rating decline. Calculations under the reinstated Section 3.3 will be made as if Section 3.3 had been in effect since the date of this Indenture except that no Default will be deemed to have occurred solely by reason of a Restricted Payment made while Section 3.3 was suspended.
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Effectiveness of Certain Covenants. So long as any Bond remains outstanding or any amount remains unpaid with respect to any of the Bonds, the Issuer shall comply with each and every one of the covenants contained in this Article Four; provided, however, that the effectiveness of Section 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 and 4.18 shall terminate upon the occurrence of a Complying Public Equity Offering and for so long as a Covenant Defeasance pursuant to Section 8.02 is in effect. ARTICLE FIVE MEETINGS OF HOLDERS
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Related to Effectiveness of Certain Covenants

  • Suspension of Certain Covenants If at any time after the Issue Date (i) the Notes are rated Investment Grade by each of S&P and ▇▇▇▇▇’▇ (or, if either (or both) of S&P and ▇▇▇▇▇’▇ have been substituted in accordance with the definition of “Rating Agencies,” by each of the then applicable Rating Agencies) and (ii) no Default has occurred and is continuing under this Indenture (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a “Covenant Suspension Event”), the Company and its Restricted Subsidiaries will not be subject to the covenants in Section 4.06, Section 4.07, Section 4.09, Section 4.12, Section 4.13 and Section 5.01(a)(2)(C) (the foregoing, the “Suspended Covenants”). Additionally, during such time as the above referenced covenants are suspended (a “Suspension Period”), the Company will not be permitted to designate any Restricted Subsidiary as an Unrestricted Subsidiary. The Company shall promptly upon its occurrence deliver to the Trustee an Officer’s Certificate setting forth the occurrence of any Covenant Suspension Event or Reversion Date, and the dates thereof. The Trustee shall not have any obligation to monitor the occurrence and dates of a Covenant Suspension Event or Reversion Date and may rely conclusively on such Officer’s Certificate. The Trustee shall not have any duty to notify the Holders of any such events or dates. In the event that the Company and its Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the foregoing, and on any subsequent date (the “Reversion Date”) the condition set forth in clause (i) of the first paragraph of this section is no longer satisfied, then the Company and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants with respect to future events. On each Reversion Date, all Indebtedness incurred during the Suspension Period prior to such Reversion Date will be deemed to be Indebtedness incurred pursuant to Section 4.06(b)(2). For purposes of calculating the amount available to be made as Restricted Payments under Section 4.07(a)(iii), calculations under such covenant shall be made as though such covenant had been in effect since the Issue Date and prior, but not during, the Suspension Period. Restricted Payments made during the Suspension Period will not reduce the amount available to be made as Restricted Payments under Section 4.07(a). For purposes of Section 4.12, on the Reversion Date, the amount of unutilized Excess Proceeds will be reset to zero. Notwithstanding that the Suspended Covenants may be reinstated, no Default or Event of Default shall be deemed to have occurred as a result of a failure to comply with the Suspended Covenants during a Suspension Period (or on the Reversion Date after a Suspension Period based solely on events that occurred during the Suspension Period).

  • Termination of Certain Covenants The covenants set forth in Sections 2.5, 2.6, 2.7, 2.8, 2.9 and 2.10 shall terminate and be of no further force or effect upon the consummation of (i) a Qualified Public Offering or (ii) a Liquidation Event.

  • Waiver of Certain Covenants Except as otherwise specified as contemplated by Section 3.1 for Securities of such series, the Company may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to Sections 3.1(22), 9.1(2), 8.1, 10.4, 10.5, 10.6, 10.7 or 10.8 for the benefit of the Holders of such series if before or after the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.

  • Suspension of Certain Obligations The Company shall not be required to comply with the provisions of subsections (f), (g) or (h) of this Section 4 during any period from the time (i) the Agents shall have suspended solicitation of offers for the purchase of Notes in their capacity as agents pursuant to a request from the Company and (ii) no Agent shall then hold any Notes purchased from the Company as principal, as the case may be, until the time the Company shall determine that solicitation of offers for the purchase of Notes should be resumed or an Agent shall subsequently purchase Notes from the Company as principal.

  • Breach of Certain Covenants Failure of any Credit Party to perform or comply with any term or condition contained in Section 2.6, Section 5.2 or Section 6; or