Mandatory Permanent Reduction Clause Samples

A Mandatory Permanent Reduction clause requires a borrower to make a non-reversible reduction in the outstanding principal of a loan under specified circumstances. Typically, this clause is triggered by certain events such as asset sales, insurance proceeds, or excess cash flow, obligating the borrower to use these funds to pay down the loan balance. Its core practical function is to accelerate loan repayment and reduce lender risk by ensuring that unexpected or surplus funds are used to permanently decrease the debt, rather than being available for re-borrowing or other uses.
Mandatory Permanent Reduction. The Aggregate Commitment shall be permanently reduced by the following amounts: (i) 100% of the Net Cash Proceeds received by the Borrower or any of its Subsidiaries from any issuance of Funded Debt (other than Funded Debt permitted pursuant to Section 10.1), (ii) 100% of the Net Cash Proceeds received by the Borrower or any of its Subsidiaries in connection with any sale of assets (including its equity ownership in any Person) not permitted pursuant to Section 10.6 (a) through (e) unless, so long as no Default or Event of Default has occurred and is continuing, such Net Cash Proceeds are reinvested in similar assets (or otherwise in a manner acceptable to the Administrative Agent, in its sole discretion) within 270 days after receipt of such Net Cash Proceeds; provided, that this clause (ii) shall not apply with respect to up to $10,000,000 of the aggregate Net Cash Proceeds received by the Borrower and its Subsidiaries prior to the Conversion Date and (iii) 100% of the Net Cash Proceeds received by the Borrower or any of its Subsidiaries under any policy of insurance of such Person or in connection with any condemnation proceeding involving property of such Person, unless, so long as no Default or Event of Default has occurred and is continuing, such Net Cash Proceeds are utilized by the Borrower or such Subsidiary within one hundred eighty (180) days of receipt of such Net Cash Proceeds to replace or repair any of its assets damaged in connection with the related claim or proceeding.
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Mandatory Permanent Reduction. Subject to the following provisions of this Section 5, (i) on the fifth anniversary of the date of this Agreement, the outstanding Committed Amount shall be reduced by an amount equal to the Mandatory Reduction Amount, (ii) on the sixth anniversary of the date of this Agreement, the Committed Amount shall be further reduced by an amount equal to the Mandatory Reduction Amount, and (iii) on the Termination Date, the Committed Amount shall be reduced to zero.
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Mandatory Permanent Reduction. The Aggregate Commitment shall be permanently reduced by the following amounts: (i) 100% of the Net Cash Proceeds received by the Borrower or any of its Subsidiaries from any issuance of Debt for borrowed money (other than Debt permitted pursuant to Section 10.1), (ii) 100% of the Net Cash Proceeds received by the Borrower or any of its Subsidiaries in connection with any sale of assets (including its equity ownership in any Person) not permitted pursuant to Section 10.6 (a) through (d); provided, that this clause (ii) shall not apply to the first $2,000,000 of any such Net Cash Proceeds received in any Fiscal Year, and (iii) 100% of the Net Cash Proceeds received by the Borrower or any of its Subsidiaries under any policy of insurance of such Person or in connection with any condemnation proceeding involving property of such Person, unless, so long as no Default or Event of Default has occurred and is continuing, such Net Cash Proceeds are utilized by the Borrower within three hundred sixty-five (365) days of receipt of such Net Cash Proceeds to
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Related to Mandatory Permanent Reduction

  • Commitment Reduction The Borrower shall have the right, upon at least two Business Days’ notice to the Administrative Agent, to terminate in whole or, upon same day notice, from time to time to permanently reduce ratably in part the unused portion of the Commitments; provided that each partial reduction shall be in the aggregate amount of $5,000,000 or in an integral multiple of $1,000,000 in excess thereof; provided, further, that the Commitments may not be reduced to an amount that is less than the aggregate Stated Amount of outstanding Letters of Credit. Subject to the foregoing, any reduction of the Commitments to an amount below $100,000,000 shall also result in a reduction of the L/C Commitment Amount to the extent of such deficit (with automatic reductions in the amount of each L/C Fronting Bank Commitment ratably in proportion to the amount of such reduction of the L/C Commitment Amount). Each such notice of termination or reduction shall be irrevocable. Without limiting subsection (b) below, any Commitment reduced or terminated pursuant to this subsection (a) may not be reinstated.

  • Commitment Reductions Any reduction of the Revolving Loan Commitments required or permitted hereunder shall reduce the Revolving Loan Commitment of each Lender having a Revolving Loan Commitment on a pro rata basis based on the Commitment Ratio of such Lender for the Revolving Loan Commitment.

  • Application of Commitment Reductions; Payment of Fees The Administrative Agent will promptly notify the Appropriate Lenders of any termination or reduction of unused portions of the Letter of Credit Sublimit or the Swing Line Sublimit or the unused Commitments of any Class under this Section 2.06. Upon any reduction of unused Commitments of any Class, the Commitment of each Lender of such Class shall be reduced by such Lender’s Pro Rata Share of the amount by which such Commitments are reduced (other than the termination of the Commitment of any Lender as provided in Section 3.07). All commitment fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination.

  • Voluntary Commitment Reductions (i) Borrower may, upon not less than three Business Days’ prior written or telephonic notice promptly confirmed by delivery of written notice thereof to Administrative Agent (which original written or telephonic notice Administrative Agent will promptly transmit by telefacsimile or telephone to each applicable Lender), at any time and from time to time terminate in whole or permanently reduce in part, without premium or penalty, the Revolving Commitments in an amount up to the amount by which the Revolving Commitments exceed the Total Utilization of Revolving Commitments at the time of such proposed termination or reduction; provided that any such partial reduction of the Revolving Commitments shall be in an aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of that amount. (ii) Borrower’s notice to Administrative Agent shall designate the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or reduction of the Revolving Commitments shall be effective on the date specified in Borrower’s notice and shall reduce the Revolving Commitment of each Lender proportionately to its Pro Rata Share thereof; provided that a notice of termination or partial reduction may state that such notice is conditional upon the effectiveness of other credit facilities or the receipt of the proceeds from the issuance of other Indebtedness or upon the closing of an acquisition transaction, in which case such notice of termination or partial reduction may be revoked by Borrower (by notice to the Administrative Agent on or prior to the specified date) if such condition is not satisfied.

  • Mandatory Prepayments Commitment Reductions (a) No later than the tenth calendar day following the date of receipt by any Obligor or any of its Restricted Subsidiaries of any Net Asset Sale Cash Proceeds from any Asset Sale, the Company shall apply all such Net Asset Sale Cash Proceeds to repay any outstanding Loans as set forth in Section 2.13(a); provided that, if the Borrower provides written notice to the Administrative Agent within seven calendar days of the date any such Net Asset Sale Cash Proceeds are so received of its intention to undertake such an investment, then so long as no Event of Default shall have occurred and be continuing, the Company shall have the option, directly or indirectly or through one or more of its Restricted Subsidiaries, to invest such Net Asset Sale Cash Proceeds within twelve months of receipt thereof in assets of the general type used in the business of the Parent and its Restricted Subsidiaries; provided, further, that, if any portion of such Net Asset Sale Cash Proceeds have not been so reinvested at the end of such twelve-month period, the Borrower shall apply an amount equal to the amount of Net Asset Sale Cash Proceeds that have not been so reinvested as set forth in Section 2.13(a). (b) No later than the tenth Business Day following the date of receipt by any Obligor or any of its Restricted Subsidiaries of any Net Equity Issuance Event Cash Proceeds from any Equity Issuance Event, the Company shall apply 33% of all such Net Equity Issuance Event Cash Proceeds (such amount, the “Equity Prepayment Amount”) to repay any outstanding Loans as set forth in Section 2.13(a), and each such prepayment shall be accompanied by a permanent reduction of the Revolving Commitments in an amount equal to such Equity Prepayment Amount. (c) If at any time, the Aggregate Total Exposure exceeds the aggregate Revolving Commitments then in effect, the Borrower shall forthwith prepay first, Loans, and second Cash Collateralize the outstanding amount of Letter of Credit Usage at the Agreed L/C Cash Collateral Amount, to the extent necessary so that the Aggregate Total Exposure shall not exceed the Revolving Commitments then in effect (or, in the case of Letter of Credit Usage, such amounts are fully Cash Collateralized in compliance with the Agreed Cash Collateral Amount). (d) If, after giving effect to any termination of or reduction of the Revolving Commitments, the Letter of Credit Sublimit exceeds the amount of the Revolving Commitments, such sublimit shall be automatically reduced by the amount of such excess (including a corresponding reduction to each Issuing Bank’s Letter of Credit Issuer Sublimit (ratably) unless otherwise agreed by the Borrower and each applicable Issuing Bank).