Cleandown Clause Samples
A Cleandown clause requires a borrower to reduce its outstanding loan balance to a specified lower level, or even to zero, for a defined minimum period within a set timeframe. Typically, this means that during each year, the borrower must pay down the loan so that the balance remains below a certain threshold—such as 10% of the facility amount—for at least a few consecutive days. The core purpose of this clause is to prevent borrowers from continuously revolving their debt without meaningful repayment, thereby ensuring that the facility is used for short-term liquidity needs rather than as a permanent source of funding.
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Cleandown. (a) The Borrower shall reduce the aggregate principal amount of all Loans outstanding to $30,000,000 or less for a period of thirty consecutive days between November 1 of each year and April 30 of the following year (the "Borrower Cleandown") and shall provide a notice of such reduction as required by SECTION 2.15(B). If, as of April 1 of any year, a Borrower Cleandown has not been completed in the five months immediately preceding such date, the Commitments of the Banks shall be reduced pro rata so that the aggregate amount of all Commitments is reduced to $30,000,000 as of such date, and such reduction shall continue through April 30 of such year (the "Bank Cleandown"). However, in the event that as of any April 1 a Borrower Cleandown has begun and is continuing, but has not continued for a consecutive thirty day period, then the Bank Cleandown shall terminate once the Borrower Cleandown has continued for thirty consecutive days. On completion of each Bank Cleandown, the Commitments shall be restored to the levels that existed as of the March 31 immediately preceding such Bank Cleandown.
(b) Within five Banking Days after the completion of each Borrower Cleandown, the Borrower shall notify the Agent as to the date on which such Borrower Cleandown was completed. The Agent shall review each such notice and if it concludes that the Borrower Cleandown was completed as indicated in the latter such notice, it shall so notify the Borrower and each Bank within five Banking Days of such notice. If the Agent concludes that the Borrower Cleandown was not properly completed, it shall so notify the Borrower, within such five day period, specifying the date(s) during the period of the asserted Borrower Cleandown on which the aggregate principal balance of all Loans exceeded $30,000,000.
Cleandown. Notwithstanding any other provision of this Agreement, TCN shall procure that (other than in respect of any Ancillary Facility Outstandings or Documentary Credits) Revolving Facility Outstandings are reduced to zero for a period of at least 5 consecutive Business Days in each annual period during which the Revolving Facility is available for drawing under this Agreement.
Cleandown. During the period from March 1 to June 30 of each fiscal year, the Credit Parties shall reduce the aggregate outstanding principal amount of all their Short-Term Debt to $200,000,000 or less for a minimum period of thirty consecutive days.
Cleandown. The Company shall ensure that the aggregate of the Base Currency Amounts of:
(a) all Loans;
(b) any cash loan element of the Ancillary Outstandings under all the Ancillary Facilities (for the avoidance of doubt, calculated net of credit balances and on an aggregate net exposure basis); and
(c) (to the extent not included within paragraphs (a) and (b) above), any cash loans of a member of the Restricted Group covered by a letter of credit or guarantee issued under an Ancillary Facility; LESS
(d) any amount of Cash or Cash Equivalent Investments held by members of the Restricted Group, (as confirmed in a certificate signed by an authorised signatory of the Company provided to the Agent within 15 Business Days after the end of each Financial Year) shall not exceed zero for a period of not less than five (5) successive Business Days (a “Clean Down Period”) once in each of its Financial Years. Not less than three (3) Months shall elapse between Clean Down Periods.
Cleandown. Following a Collateral Release Date, the Borrowers shall, for a period of forty-five consecutive days between November 1 and February 28 of each fiscal year of the Borrowers following such release, reduce the outstanding Loans to an amount not in excess of $50,000,000.
Cleandown. Notwithstanding anything to the contrary in this Agreement, prior to the Revolving Credit Termination Date, Borrower must reduce the aggregate outstanding principal balance of all Revolving Credit Loans to zero and maintain a zero balance for a period of not less than thirty (30) consecutive days (the “Cleandown”). If Borrower has not completed the Cleandown at least thirty (30) days prior to the Revolving Credit Termination Date, the Revolving Credit Commitment shall be reduced to zero on the thirtieth (30th) day prior to the Revolving Credit Termination Date.
Cleandown. Notwithstanding any other provision of this Agreement, the Borrower shall procure that (other than in respect of any Ancillary Facility Outstandings or Documentary Credits) Revolving Facility Outstandings are reduced to zero for a period of at least 5 consecutive Business Days in each annual period during which the Revolving Facility is available for drawing under this Agreement.
Cleandown. The Company shall ensure that for a period of not less than 10 successive Business Days in each of its financial years there are no outstanding Facility C Loans.
Cleandown. The Borrower shall from time to time arrange the Loans and shall repay to the Lenders from time to time the outstanding Loans and other Obligations such that during the term of this Agreement for at least once during each twelve-month period commencing on the Closing Date for a period of at least ten (10) consecutive Business Days (each such period, a “Cleandown Period”) the Outstanding Amount with respect to Loans shall be no greater than U.S.$1,000,000 (the “Cleandown Maximum Amount”). For the avoidance of doubt, for purposes of determining the Outstanding Amount with respect to the Borrower’s compliance with the Cleandown Maximum Amount, the Borrower’s L/C Obligations and Outstanding Amounts with respect to undrawn Letters of Credit shall not be counted towards the Clean Down Maximum Amount.