Utilization of Net Proceeds Clause Samples
The 'Utilization of Net Proceeds' clause defines how the net proceeds from a transaction, such as a sale or financing, must be used by the receiving party. Typically, this clause specifies the permitted uses for the funds, such as repaying existing debts, funding specific projects, or distributing amounts to stakeholders. By clearly outlining the acceptable applications of the net proceeds, the clause ensures transparency and accountability, preventing misuse of funds and aligning the parties’ expectations regarding financial management.
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Utilization of Net Proceeds. (a) Net Proceeds must be utilized either for payment of the Obligations or for the restoration of the Property. Net Proceeds shall be utilized for the restoration of the Property, but only if no Default shall exist and only if in the reasonable judgment of Administrative Agent (i) there has been no material adverse change in the financial viability of the Improvements and (ii) the Net Proceeds, together with other funds deposited with Administrative Agent for that purpose, are sufficient to pay the cost of the restoration pursuant to a budget and plans and specifications reasonably approved by Administrative Agent. Otherwise, Net Proceeds shall be utilized for payment of the Obligations.
(b) If Net Proceeds are to be utilized for the restoration of the Property, the Net Proceeds, together with any other funds deposited with Administrative Agent for that purpose, must be deposited in a Borrower’s Deposit Account, which shall be an interest-bearing account, with all accrued interest to become part of Borrower’s deposit. Borrower agrees that it shall include all interest and earnings on any such deposit as its income (and, if Borrower is a partnership or other pass-through entity, the income of its partners, members or beneficiaries, as the case may be), and shall be the owner of all funds on deposit in the Borrower’s Deposit Account for federal and applicable state and local tax purposes. Administrative Agent shall have the exclusive right to manage and control all funds in the Borrower’s Deposit Account, but Administrative Agent shall have no fiduciary duty with respect to such funds. Administrative Agent will advance the deposited funds from time to time to Borrower for the payment of costs of restoration of the Property upon presentation of evidence acceptable to Administrative Agent that such restoration has been completed satisfactorily and lien-free. Any account fees and charges may be deducted from the balance, if any, in the Borrower’s Deposit Account. Borrower grants to Administrative Agent a security interest in the Borrower’s Deposit Account and all funds hereafter deposited to such deposit account, and any proceeds thereof, as security for the Obligations. Such security interest shall be governed by the Uniform Commercial Code of the State, and Administrative Agent shall have available to it all of the rights and remedies available to a secured party thereunder. The Borrower’s Deposit Account may be established and held in such name or names as A...
Utilization of Net Proceeds. (a) Net Proceeds must be utilized either for payment of the Obligations or for the restoration of the Property. Net Proceeds may be utilized for the restoration of the Property only if no Event of Default shall exist and only if in the reasonable judgment of Lender (i) there has been no material adverse change in the financial viability of the construction or operation of the Improvements, (ii) the Net Proceeds, together with other funds deposited with Lender for that purpose, are sufficient to pay the cost of the restoration pursuant to a budget and plans and specifications approved by Lender in its reasonable discretion, and (iii) the restoration can be completed prior to the final maturity of the Loan. Otherwise, Net Proceeds shall be 37867101.2 01/05/2021 - 16 - utilized for payment of the Obligations. To the extent Net Proceeds are utilized for the payment of the Obligations, said payments shall be subject to the payment of the applicable Exit Fee as set forth in the Note.
(b) If Net Proceeds are to be utilized for the restoration of the Property, the Net Proceeds, together with any other funds deposited with Lender for that purpose, must be deposited in an interest- bearing account with Lender, which account will be assigned to Lender as additional security for the Loan. The account will be opened, managed and controlled in a manner consistent with the Funding Account. Disbursements of funds from the account will be made in a manner consistent with, and subject to, the requirements for the closing and funding of the Loan and the terms of this Agreement regarding the disbursement of Loan proceeds.
Utilization of Net Proceeds. (a) Subject as hereinafter provided in Section 4.6(b) below, Net Proceeds must be utilized either for payment of the Obligations or for the restoration of the Eligible Property, as determined by Lender in the exercise of its sole discretion.
(b) Lender shall allow Borrower to apply the Net Proceeds to restoration as permitted pursuant to the terms hereof, including but not limited to Section 4.6(c), in accordance with the following terms and conditions and provided the same are fully satisfied and complied with, as determined by Lender in the exercise of its sole discretion:
(i) the cost of such repair and restoration shall not exceed $500,000.00;
(ii) prior to commencement of restoration and from time to time during restoration, Lender may require Borrower to deposit additional monies with Lender in amounts which, in Lender’s judgment, are sufficient to defray all costs to be incurred to complete the restoration and all costs associated therewith, including labor, materials, architectural and design fees and expenses and contractor’s fees and expenses (and Borrower shall make all such deposits when and as required by Lender), and Lender shall have first approved a budget and cost breakdown for the restoration, together with a disbursement schedule, in detail satisfactory to Lender;
(iii) prior to commencement of restoration and disbursement of any amount of the proceeds, from time to time, Borrower shall demonstrate to the satisfaction of Lender that the Borrower has the financial ability during the period of restoration, to continue to make monthly principal and/or interest payments (as the case may be) under the Note and the Swap Contract as the same become due, and to continue to pay the carrying costs of the Property (including, without limitation, taxes and insurance payments) as the same become due;
(iv) prior to commencement of restoration and disbursement of any amount of the proceeds, the contracts, contractors, plans and specifications for the restoration shall have been approved by Lender in its reasonable discretion and all governmental authorities having jurisdiction, with all permits for the same having been issued;
(v) all restoration work shall be done under fixed price contracts and Borrower shall have executed and delivered to Lender an assignment of all such contracts, with contractor’s consent and acknowledgment attached thereto, all in form and content as required by Lender;
(vi) at the time of any disbursement, no Event of Default sh...
Utilization of Net Proceeds. (a) Net Cash Proceeds arising from any Event of Loss with respect to any Real Estate must be utilized either for payment of the Obligations or for the restoration of such Real Estate. Net Cash Proceeds may be utilized for the restoration of such Real Estate only if no Default shall exist and only if in the reasonable judgment of Agent (i) there has been no material adverse change in the financial viability of the improvements on such Real Estate, (ii) the Net Cash Proceeds, together with other funds deposited with Agent for that purpose, are sufficient to pay the cost of the restoration pursuant to a budget and plans and specifications approved by Agent, (iii) the restoration can be completed prior to the Maturity Date and prior to the date required by any purchase and sale agreement or by any Lease, and (iv) following restoration, such Real Estate will have a fair market value at least equal to its fair market value immediately prior to the Event of Loss. Otherwise, Net Cash Proceeds shall be utilized for payment of the Obligations in such order and in such proportions as determined by Agent in its sole discretion.
(b) If Net Cash Proceeds are to be utilized for the restoration of such Real Estate, (i) the Borrowers shall, at their sole cost and expense, promptly commence and diligently and continuously perform to completion the restoration in a good and workmanlike manner and in compliance with all Laws and the requirements of the Permitted Liens, whether or not the Borrowers shall have satisfied the requirements of this Section 7.08(b) in order to cause the Net Cash Proceeds to be made available for such restoration and whether or not such insurance proceeds on account of the Casualty shall be sufficient for such purpose, and (ii) the Net Cash Proceeds, together with any other funds deposited with Agent for that purpose, must be deposited in a an account maintained by Agent solely for the purposes described in this Section 7.08 ("Borrower's Deposit Account"), which shall be a non-interest-bearing account. Subject to the terms of this Section 7.08, Agent shall have the exclusive right to manage and control all funds in the Borrower's Deposit Account, but Agent shall have no fiduciary duty with respect to such funds. Prior to the advance by Agent of any funds so deposited and the commencement of such restoration, the Borrowers shall take all steps necessary to avoid the imposition of any mechanics' liens on the Real Estate or the improvements thereon. The...
Utilization of Net Proceeds. Net Proceeds must be utilized either for payment of the Obligations or for the restoration of the Property. Net Proceeds may be utilized for the restoration of the Property only if no Event of Default shall exist and only if in the reasonable judgment of Lender (i) there has been no material adverse change in the financial viability of the Improvements, (ii) the Net Proceeds, together with other funds deposited with Lender for that purpose, are sufficient to pay the cost of the restoration pursuant to a budget and plans and specifications approved by Lender, and (iii) the restoration can be completed prior to the final maturity of the Loan and prior to the date required by any permanent loan commitment or any purchase and sale agreement or by any Lease. Otherwise, Net Proceeds shall be utilized for payment of the Obligations.
Utilization of Net Proceeds. (a) All Net Proceeds must be utilized either for payment of the Obligations or for the restoration of the Property. Net Proceeds above the Loss Threshold may be utilized for the restoration of the Property only if no Event of Default shall exist and is then continuing, and only if in the reasonable judgment of Lender (i) there has been no material adverse change in the Borrower’s ability to complete Construction of the Improvements in accordance with the Project Schedule, the Budget and Plan Specifications or the financial viability of the operation of the Improvements, (ii) the Net Proceeds, together with other funds deposited with Lender for that purpose, are sufficient to pay the cost of the restoration pursuant to a budget and plans and specifications approved by Lender, and (iii) the restoration can be completed prior to Maturity Date and prior to the date required by the Take Out Financing Arrangements. Otherwise, Net Proceeds shall be utilized for payment of the Obligations.
(b) If Net Proceeds are to be utilized for the restoration of the Property, the Net Proceeds must be deposited in Borrower’s Deposit Account established by Lender with a financial institution of ▇▇▇▇▇▇’s choice, which account will be assigned to Lender as additional security for the Loan. Disbursements of funds from the account will be made in a manner consistent with, and subject to, the requirements for the funding of advances of the Loan and the terms of this Agreement regarding the disbursement of Loan proceeds.