Optional Redemption Mandatory Redemption Clause Samples
The 'Optional Redemption; Mandatory Redemption' clause defines the circumstances under which a borrower or issuer can repay a loan or redeem securities before their scheduled maturity, either at their own discretion (optional) or because they are required to do so (mandatory). In practice, optional redemption allows the issuer to pay off the debt early, often after a specified period and sometimes with a premium, while mandatory redemption obligates the issuer to redeem a portion or all of the securities upon the occurrence of certain events, such as asset sales or a change of control. This clause provides flexibility for the issuer to manage debt proactively and protects investors by specifying when and how early repayment can occur, thereby balancing the interests of both parties.
Optional Redemption Mandatory Redemption. (a) The Company may at any time redeem all of the Notes, or any portion of the Notes (in a minimum of $5,000,000 and integral multiples of $1,000,000), upon not less than 30 nor more than 60 days' prior written notice, at a redemption price equal to the sum of (i) the principal amount of the Notes to be redeemed plus (ii) accrued and unpaid interest with respect to the principal amount of the Notes to be redeemed as of the applicable redemption date, plus (iii) the Applicable Premium.
(b) On (x) the second anniversary of the Closing Date, in the case of any Net Proceeds of Asset Sales on deposit in the Asset Sale Proceeds Account or (y) within three Business Days of the relevant Asset Sale, in the case of any Net Proceeds of an Asset Sale consummated on or after the second anniversary of the Closing Date, the Company shall make a redemption of Notes in an amount equal to such Net Proceeds, at a redemption price equal to the sum of (i) the principal amount of the Notes to be redeemed plus (ii) accrued and unpaid interest with respect to the principal amount of the Notes to be redeemed as of the applicable redemption date, plus (iii) the Applicable Premium; provided that the Company shall not be required to redeem Notes hereunder until the aggregate principal amount of Notes to be redeemed shall exceed $2,500,000.
(c) As used herein, "APPLICABLE PREMIUM" means (w) if any redemption pursuant to clause (a) occurs prior to the second anniversary of the Closing Date, an amount equal to five percent (5%) of the principal amount of the Notes to be redeemed plus the Make-Whole Amount, (x) if any redemption pursuant to clause (a) or (b) occurs on or after the second anniversary of the Closing Date but prior to the third anniversary of the Closing Date, an amount equal to five percent (5%) of the principal amount of the Notes to be redeemed, (y) if such redemption pursuant to clause (a) or (b) occurs on or after the third anniversary of the Closing Date but prior to the date that is forty-five (45) days prior to the Maturity Date, an amount equal to two percent (2%) of the principal amount of the Notes to be redeemed, and (z) if such redemption occurs thereafter, zero.
Optional Redemption Mandatory Redemption. (a) The Company may at any time redeem all of the Notes, or any portion of the Notes (in a minimum of $5,000,000 and integral multiples of $1,000,000), upon not less than 30 nor more than 60 days’ prior written notice, at a redemption price equal to the sum of (i) the principal amount of the Notes to be redeemed plus (ii) accrued and unpaid interest with respect to the principal amount of the Notes to be redeemed as of the applicable redemption date.
(b) Within three Business Days of any Asset Sale, the Company shall make a redemption of Notes in an amount equal to the Net Proceeds of such Asset Sale, at a redemption price equal to the sum of (i) the principal amount of the Notes to be redeemed plus (ii) all accrued and unpaid interest with respect to the principal amount of the Notes to be redeemed as of the applicable redemption date; provided, that the Company shall not be required to redeem Notes hereunder until the aggregate principal amount of Notes to be redeemed shall exceed $2,500,000.
(c) Any redemption pursuant to this Section 8.1 shall be made pursuant to the provisions of Sections 8.2 through 8.6 hereof.”
Optional Redemption Mandatory Redemption