Solvent Liquidation Clause Samples
The Solvent Liquidation clause defines the procedures and consequences that apply if a party to the agreement undergoes a voluntary winding up while remaining solvent. Typically, this clause outlines the steps for distributing assets, settling outstanding obligations, and notifying relevant stakeholders in the event of such a liquidation. Its core practical function is to ensure an orderly and predictable process for dissolving a solvent entity, thereby protecting the interests of all parties involved and minimizing potential disputes.
Solvent Liquidation. Amend Clause 27.4 (Release of Guarantees and Security) of the Credit Agreement to provide for equivalent releases as a result of, and in connection with, any solvent liquidation or dissolution that complies with Clause 19.29 (Internal Reorganisations).
Solvent Liquidation. No Obligor (for these purposes, a “Predecessor Obligor”) shall, without the prior written consent of an Instructing Group, liquidate on a solvent basis (a “Solvent Liquidation”) unless:
(a) on or prior to the Solvent Liquidation, an entity (the “Successor Entity”) acquires substantially all of the assets and assumes substantially all of the liabilities of the Predecessor Obligor (a “Liquidation Transfer”), excluding any rights under contracts that cannot be assigned or liabilities that will be satisfied or released upon the Solvent Liquidation, on an arms’ length basis and for full consideration;
(b) the Successor Entity is organised in the same jurisdiction as that in which the Predecessor Obligor is organised and is either:
(i) an existing Obligor; or
(ii) a Subsidiary of the Company that is entitled to become (and subsequently does become) an Obligor in accordance with the provisions of Clause 26.1 (Acceding Borrowers) or Clause 26.2 (Acceding Guarantors); and
(c) the Successor Entity does not incur any additional material liabilities in connection with the Solvent Liquidation other than those which are to be transferred to it by the Predecessor Obligor but which did not arise directly as a result of the Solvent Liquidation;
(d) to the extent previously provided in respect of the shares of the Predecessor Obligor, the Finance Parties are granted a first ranking security interest over the shares of the Successor Entity;
(e) no Event of Default has occurred and is continuing or would arise from the Liquidation Transfer or the Solvent Liquidation;
(f) immediately after the Solvent Liquidation, the following documents are delivered to the Facility Agent each in a form previously approved by the Facility Agent (acting on the instructions of an Instructing Group):
(i) copies of solvency declarations of the directors of the Successor Entity confirming to the best of their knowledge and belief, that the Successor Entity was balance sheet solvent immediately prior to and after the Solvent Liquidation, accompanied by any report by the auditors or other advisers of the relevant Successor Entity on which such directors have relied for the purposes of giving such declaration;
(ii) copies of the resolutions of the Predecessor Obligor and the Successor Entity (to the extent required by law) approving the Liquidation Transfer and/or the Solvent Liquidation (as applicable);
(iii) copies of the statutory declarations of the directors of the Predecessor Obligor (to the ex...
Solvent Liquidation. (a) Amend paragraph (b) of Clause 22.7 (Insolvency Proceedings) of the Credit Agreement so that it includes any solvent liquidation or dissolution in accordance with Clause 21.24 (Internal Reorganisations) of the Credit Agreement.
(b) Further to paragraph 9 of Schedule 4 (Amendments, Waivers, Consents and other Modifications), amend the Credit Agreement to provide for releases of Security as a result of, and in connection with, any solvent liquidation or dissolution that complies with Clause 21.24 (Internal Reorganisations) of the Credit Agreement.
Solvent Liquidation. No Obligor (for these purposes, a “Predecessor Obligor”) shall, without the prior written consent of an Instructing Group, liquidate on a solvent basis (a “Solvent Liquidation”) unless:
Solvent Liquidation. Except otherwise specified herein, in the event that one of the JV Parties wishes to sell some or all of its shares in the JV to the other JV Party, and the other JV Party wishes to buy such shares, the JV Parties will meet to discuss in good faith how to obtain a fair market valuation for such shares.
Solvent Liquidation. As soon as practicable after the Closing, and in any event no later than seven business days of the Closing, the Company shall enter into, and thereafter pursue diligently, a solvent liquidation process to effect and complete the Wind Up.