An acceleration clause is a provision in a contract that allows a lender to require a borrower to repay all of an outstanding loan if certain conditions are met, typically when the borrower defaults on payment or violates other loan terms. This clause is designed to protect lenders by enabling them to act swiftly to recover the loan amount, reducing potential losses from prolonged defaults.
The occurrence of any situation referred to in article 1186 (Acceleration clause) of the Italian Civil Code, to which the Significant Events referred to in article 16 letters e), f), g), h), i) of this Contract shall constitute grounds for activating the acceleration clause by the Borrower.
A. It is expressly agreed that the occurrence of any of the hypotheses provided for by Art. 1186 of the Italian Civil Code shall constitute grounds for activating the acceleration clause to the Borrower’s detriment, without any judicial ruling. Loan acceleration commences if the Borrower applies for admission to pre-bankruptcy procedures or to any procedure, including those of an extra-judicial nature, having similar effects or in any case involving the satisfaction of debts and obligations in general in a manner different from normal ones, including the transfer of assets to creditors.
The Warrants contain a provision that if the Company’s Shares trade at or above CAD$5.00 per Share for 10 consecutive trading days, the Company may, at any time after the expiry of the applicable statutory hold period, accelerate the expiration of the Warrants upon not less than 30 days’ written notice by the Company (the “Acceleration Clause”).
The Offer Letter provides that the Award will have a double trigger acceleration clause providing for accelerated vesting in the event of a termination without cause or for good reason within the 90 day period prior to, or 12 months following, a change of control of the Company.
Each Warrant will be exercisable into one Share (a “Warrant Share”) at an exercise price of C$0.28 for a period of three years from the date of issue (the “Warrant Expiry Date”) and are subject to an acceleration clause that in the event that the Shares close at or above C$0.40 per share on the Canadian Securities Exchange for ten consecutive trading days (the “Acceleration Event”), the Warrant Expiry Date shall accelerate to 90 days following notice of the Acceleration Event.
ACCELERATION CLAUSE. The non-timely payment of any corresponding interest installment and any of the capital restitution installments will make the total obligation immediately payable, in principal and interest, which will be considered overdue and will enter to accrue an interest equivalent to the maximum that is allowed to be stipulated in the readjustable money obligations, by way of a penalty clause.
Additionally, the Credit Suisse Credit Facility contains a subjective acceleration clause in the event that the lender determines that a material adverse change has occurred within the business, operations, or financial condition of DIH.
The borrowings under the SNB Loan Agreement were classified as short-term obligations under GAAP as the agreement contained a subjective acceleration clause and required a lockbox arrangement whereby all receipts are swept daily to reduce borrowings outstanding.
The Warrants are subject to an acceleration clause in the event that the common shares are listed on a recognized stock exchange and trade at a price of CAD$0.30 or greater for 10 consecutive trading days, in which event the Company may notify warrant holders that the Warrants must be exercised within a period of 30 days. The Warrants will automatically expire if the Warrant holders do not exercise them within the accelerated 30-day period. In connection with the Unit Offering, the Company paid cash commissions aggregating $18,367 (CAD$22,397) and issued 149,310 Warrants to registered broker-dealers valued at $48,277. The Warrants are subject to the same terms and conditions as the Warrants purchased by other subscribers in the Unit Offering.
The Bank will have the right to inform the Borrower of its intention to exercise its rights under this article, by means of a communication sent by registered letter with return receipt or by certified email; activating the acceleration clause shall become effective ipso iure, without any judicial ruling, from the date on which the aforementioned communication is received.
Acceleration Premium Calculation. The applicable “Acceleration Premium” shall be an amount calculated as follows: (i) If the date of Acceleration occurs: (A) on or prior to the fourth (4th) Payment Date, the Acceleration Premium shall be an amount equal to 5.00% of the aggregate outstanding principal amount of the Loans subject to the Acceleration; (B) after the fourth (4th) Payment Date and on or prior to the eighth (8th) Payment Date, the Acceleration Premium shall be an amount equal to 4.00% of the aggregate outstanding principal amount of the Loans subject to the Acceleration; (C) after the eighth (8th) Payment Date and on or prior to the twelfth (12th) Payment Date, the Acceleration Premium shall be an amount equal to 3.00% of the aggregate outstanding principal amount of the Loans subject to the Acceleration; (D) after the twelfth (12th) Payment Date and on or prior to the sixteenth (16th) Payment Date, the Acceleration Premium shall be an amount equal to 2.00% of the aggregate outstanding principal amount of the Loans subject to the Acceleration; (E) after the sixteenth (16th) Payment Date and on or prior to the twentieth (20th) Payment Date, the Acceleration Premium shall be an amount equal to 1.00% of the aggregate outstanding principal amount of the Loans subject to the Acceleration; and (F) after the twentieth (20th) Payment Date, the Acceleration Premium shall be an amount equal to 0.00% of the aggregate principal amount of the Loans subject to the Acceleration.
Upon an acceleration of all of the outstanding ETNs pursuant to an Optional Acceleration, the Accelerated Redemption Amount will be equal to the arithmetic average, as determined by the Calculation Agent, of the Closing Indicative Values of such ETNs during the Accelerated Valuation Period.
An Acceleration Event will occur if the Intraday Indicative Value on any Trading Day is equal to or less than 40% of the most recent Rebalanced Indicative Value.
Acceleration Fee: Upon the occurrence of an Automatic Acceleration, an Acceleration Fee equal to the product of (1) 0.05% times (2) the level of the Index used in determining the Index Amount on the Accelerated Valuation Date times (3) the Index Units as of the immediately preceding ETN Business Day will apply.
An acceleration clause is a provision typically included in loan agreements or mortgages that allows the lender to demand the borrower repay the entire loan amount immediately under certain conditions. These conditions are often tied to the breach of contract terms, such as missed payments, loss of collateral value, or bankruptcy.
You should use an acceleration clause in contracts where:
Writing an acceleration clause involves stipulating the conditions under which the clause will be activated and the obligations of the borrower upon activation. Here’s a basic template:
Acceleration Clause: In the event that the Borrower defaults on any payment, violates any other terms of this agreement, or if any material adverse change occurs in the Borrower’s financial condition or collateral value, the Lender shall have the right, at its option, to declare the entire outstanding principal and accrued interest immediately due and payable.
Key elements to include:
Contracts that typically contain an acceleration clause include:
Using an acceleration clause effectively provides financial security and a clear course of action in case of default, making it a crucial element in many financial and lease agreements.
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