Common use of Special Mandatory Prepayment Clause in Contracts

Special Mandatory Prepayment. If the aggregate amount which would be includible in gross income for federal income tax purposes with respect to the Loans before the close of any “accrual period” (as defined in Section 1272(a)(5) of the Code and Treasury Regulation Section 1.1272-1(b)(1)(ii)) ending after five years from the Closing Date (the “Aggregate Inclusion”) exceeds an amount equal to the sum of (x) the aggregate amount of interest to be paid in cash under the Loans before the close of such accrual period and (y) the product of the issue price of the Loans (as determined under Section 1273(b) of the Code) multiplied by the yield to maturity of the Loans (as determined for purposes of applying Section 163(i) of the Code) (the sum of (x) and (y), the “Adjusted Actual Payment”), the Borrower shall, before the close of any such accrual period, make a mandatory prepayment in cash (any such prepayment, a “Special Mandatory Prepayment”) on the Loans in an amount equal to the amount by which the Aggregate Inclusion as of such time exceeds the Adjusted Actual Payment. Such Special Mandatory Prepayment will be applied against and reduce the principal amount of the Loans outstanding at such time, but will be taken into account as payments of interest for purposes of calculating any subsequent Special Mandatory Prepayments. The Lenders and the Borrower intend that the Special Mandatory Prepayments be sufficient to result in the Loans being treated as not having “significant original issue discount” within the meaning of Section 163(i)(2) of the Code, and this paragraph shall be interpreted in a manner consistent with such intent.

Special Mandatory Prepayment. If the aggregate amount which would be includible in gross income for federal income tax purposes with respect to the Loans before the close of any “accrual period” (as defined in Section 1272(a)(5) of the Code and Treasury Regulation Section Reg. 1.1272-1(b)(1)(ii)) ending after five (5) years from the Closing Date (the “Aggregate Inclusion”) exceeds an amount equal to the sum of (x) the aggregate amount of interest to be paid in cash under the Loans before the close of such accrual period and (y) the product of the issue price of the Loans (as determined under Section 1273(b) of the Code) multiplied by the yield to maturity of the Loans (as determined for purposes of applying Section 163(i) of the Code) (the sum of (x) and (y), the “Adjusted Actual Payment”), the Borrower shall, before the close of any such accrual period, make a mandatory prepayment in cash (any such prepayment, prepayment a “Special Mandatory Prepayment”) on the Loans in an amount equal Loans, to the amount by which extent that the Aggregate Inclusion as of such time exceeds the Adjusted Actual Payment. Such Special Mandatory Prepayment mandatory prepayment will be applied against and reduce the principal amount of the Loans outstanding at such time, but will be taken into account as payments of interest for purposes of calculating any subsequent Special Mandatory Prepayments. The Lenders and the Borrower intend that the Special Mandatory Prepayments be sufficient to result in the Loans being treated as not having “significant original issue discount” within the meaning of Section 163(i)(2) of the Code, and this paragraph shall be interpreted in a manner consistent with such intent.