Non-Borrowing Base Properties Clause Samples
The Non-Borrowing Base Properties clause defines which assets or properties owned by a borrower are excluded from the calculation of the borrowing base in a lending arrangement. Typically, this clause lists specific types of assets—such as certain real estate, intellectual property, or inventory—that do not count toward the collateral value used to determine the maximum amount a borrower can draw under a credit facility. By clearly identifying these excluded assets, the clause ensures that only qualifying, reliable collateral is considered, thereby protecting the lender from overestimating the borrower's available security and reducing credit risk.
Non-Borrowing Base Properties. (1) The Borrower shall make mandatory principal prepayments of the Loans (or shall Cash Collateralize the Letter of Credit Liabilities or Specified Derivatives Obligations, as applicable) in the manner set forth in clause (viii) below in amounts equal to one hundred percent (100%) of the aggregate Net Cash Proceeds received by the Borrower or any Guarantor from any Insurance and Condemnation Event with respect to Collateral that is not a Borrowing Base Property. Such prepayments shall be made within three (3) Business Days after the date such Person receives the Net Cash Proceeds from any such Insurance and Condemnation Event; provided that, so long as no Event of Default has occurred and is continuing, no prepayment shall be required under this Section 2.10(b)(v) with respect to such portion of such Net Cash Proceeds that the Borrower shall have, on or prior to such date, given written notice to the Administrative Agent of its intent to reinvest in accordance with clause (2) below.
(2) With respect to any Net Cash Proceeds received by the Borrower or any Guarantor from any Insurance and Condemnation Event with respect to Collateral that is not a Borrowing Base Property, at the option of the Borrower, the Loan Parties may reinvest all or any portion of such Net Cash Proceeds for reconstruction of such Property within twelve (12) months following receipt of such Net Cash Proceeds; provided that (x) if any Net Cash Proceeds are not so reinvested within twelve (12) months following receipt of such Net Cash Proceeds, or (y) if any Net Cash Proceeds are no longer intended to be or cannot be so reinvested at any time after delivery of a notice of reinvestment election, in either case an amount equal to any such Net Cash Proceeds shall be applied to the prepayment of the Loans as set forth in this Section 2.10(b) within three (3) Business Days thereafter.