Borrowing Base Certificate; Approval Clause Samples
The Borrowing Base Certificate; Approval clause establishes the requirement for a borrower to periodically submit a certificate detailing the value of eligible collateral that supports their borrowing capacity under a credit agreement. Typically, the borrower must prepare and deliver this certificate to the lender, who then reviews and approves it to determine the maximum amount that can be borrowed at any given time. This process ensures that the lender has up-to-date information on the collateral base, thereby managing credit risk and maintaining compliance with the agreed lending limits.
Borrowing Base Certificate; Approval. The Borrowing Base shall be calculated at the times and in the manner set forth in this Section 3.5(a):
(i) Within forty-five (45) days after the end of each calendar quarter, and at such other times as the Aggregate Majority Lenders may reasonably require (provided that such calculation is to be made as of the last day of a calendar month), Borrower shall provide Administrative Agent with a Borrowing Base Certificate (and Administrative Agent will promptly forward to each Lender) showing Borrower’s calculations of the components of the Borrowing Base and such data supporting such calculations as the Aggregate Majority Lenders may require. The Aggregate Majority Lenders shall have a period of thirty (30) days following receipt of a Borrowing Base Certificate to notify Administrative Agent (who shall notify Borrower) of the Aggregate Majority Lenders’ approval or disapproval thereof. Failure of the Aggregate Majority Lenders to so notify Administrative Agent and Administrative Agent to so notify Borrower within such thirty (30) day period shall be deemed approval and such Borrowing Base as set forth in such Borrowing Base Certificate shall be effective as of the date approved (or deemed approved) by the Aggregate Majority Lenders. The amount so approved (or deemed approved) shall constitute the Borrowing Base until such time as the Borrowing Base is redetermined in accordance with this Section 3.5(a).
(ii) In the event that Administrative Agent (as requested by the Aggregate Majority Lenders) timely notifies Borrower of disapproval of a Borrowing Base Certificate, then Administrative Agent shall, at the same time, notify Borrower in writing of the amount of the Borrowing Base as reasonably determined by the Aggregate Majority Lenders and the basis of such determination, and the effective date thereof (which shall be the date of the giving of such notice by Administrative Agent), and such amount shall thereupon and thereafter constitute the Borrowing Base which shall remain in effect until such time as the Borrowing Base is redetermined in accordance with this Section 3.
Borrowing Base Certificate; Approval. The Administrative Agent shall have the right to review and reasonably approve or disapprove (and to make reasonable appropriate adjustments as contemplated in this Agreement for approval) each Borrowing Base Certificate; provided, however, until such Borrowing Base Certificate is approved or adjusted by the Administrative Agent, the most recent Borrowing Base Certificate submitted by the Borrower and approved or adjusted, from time to time as herein contemplated, by the Administrative Agent shall be in effect. The making of a Credit Extension based upon a Borrowing Base Certificate submitted to the Administrative Agent shall not be deemed to be an unconditional approval thereof. If the Administrative Agent reasonably believes that any current or prior Borrowing Base Certificate is incomplete or inaccurate in any respect which causes Credit Extensions to be made in excess of what is specified in this Agreement, then the Borrowing Base shall be limited to such amount as the Administrative Agent reasonably determines to be applicable in accordance with the provisions of this Agreement until such time as the Borrowing Base Certificate is reasonably determined by Administrative Agent to be true, correct and complete.