Mandatory prepayment – Disposal Clause Samples
The "Mandatory prepayment – Disposal" clause requires a borrower to use proceeds from the sale or disposal of certain assets to repay outstanding loan amounts. Typically, this clause applies when a company sells significant assets outside the ordinary course of business, and the lender wants to ensure that the cash received is used to reduce the loan balance rather than for other purposes. Its core function is to protect the lender by reducing credit risk and ensuring that the borrower's asset base, which may serve as collateral, is not diminished without corresponding repayment.
Mandatory prepayment – Disposal. Upon a Disposal of whole or part of an Existing Loan Portfolio or Approved Loan Portfolio (directly or indirectly through a sale of a Portfolio Owner or otherwise) the Borrowers shall no later than five (5) Business Days prior to such Disposal document to the Facility Agent’s satisfaction that the Group will be in compliance with the LTV Ratio immediately after such Disposal.
Mandatory prepayment – Disposal. (a) The Obligors’ Agent must promptly notify the Facility Agent of a disposal by the Group of all or substantially all of the assets of the Group.
(b) On any such disposal referred to in paragraph (a) above:
(i) each Borrower must immediately repay or prepay each Credit utilised by it; and
(ii) the Total Commitments will be immediately cancelled.
Mandatory prepayment – Disposal. Upon any disposal of the Acquisition Shares, the Borrower shall prepay the Loan in an amount equal to 50% or (in the case of a Full Prepayment Event) 100% of the Net Proceeds of such disposal, provided that any Net Proceeds not applied in prepayment of the Loan pursuant to this Clause 6.4 shall be used and applied towards prepayment of the outstanding loans under the KEXIM Facility Agreement.