Increased Cost Clause Samples
The Increased Cost clause allows a party to adjust the terms of an agreement if external factors cause their costs to rise unexpectedly. Typically, this clause applies when changes in law, regulation, or market conditions increase the expenses associated with fulfilling contractual obligations, such as higher taxes, tariffs, or compliance costs. Its core function is to allocate the risk of unforeseen cost increases, ensuring that the affected party is not unfairly burdened and that the contract remains fair and viable for both sides.
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Increased Cost. If, as a result of (a) any change in, or in the interpretation or application of, or the introduction of, any law or any regulation, request or requirement (whether or not having the force of law, but, if not having the force of law, with which the Lender or, as the case may be, its holding company habitually complies), including (without limitation) those relating to Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits and special deposits or other banking or monetary controls or requirements which affects the manner in which the Lender allocates capital resources to its obligations hereunder and those (including, but not limited to, "Basel III") which shall replace, amend and/or supplement the provisions set out in the statement (as in effect as of the date of this Agreement) of the Basel II committee on banking supervision dated July 1988 and entitled "international convergence of capital measurement and capital structures" or any amendatory or substitute agreement thereof, or (b) compliance by the Lender with any request from any applicable fiscal or monetary authority (whether or not having the force of law but, if not having the force of law, with which the Lender habitually complies) or (c) any other set of circumstances affecting the Lender:
(a) the cost to the Lender of making the Commitment or any part thereof or maintaining or funding the Loan is increased or an additional cost on the Lender is imposed; and/or
(b) subject the Lender to Taxes or the basis of Taxation (other than Taxes or Taxation on the overall net income of the Lender) in respect of any payments to the Lender under this Agreement or any of the other Security Documents is changed; and/or
(c) the amount payable or the effective return to the Lender under any of the Security Documents is reduced; and/or
(d) the Lender's rate of return on its overall capital by reason of a change in the manner in which it is required to allocate capital resources to the Lender's obligations under any of the Security Document is reduced; and/or
(e) require the Lender to make a payment or forgo a return on or calculated by references to any amount received or receivable by it under any of the Security Documents is required; and/or
(f) require the Lender to incur or sustain a loss (including a loss of future potential profits) by reason of being obliged to deduct all or part of the Commitment or the Loan from its capital for regulatory purposes, then and in each case (subject to C...
Increased Cost. (a) If, after the date of this Agreement, the introduction of, or any change in, any applicable law, rule or regulation or in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof or compliance by any Lender with any request or directive of any such Governmental Authority, central bank or comparable agency (whether or not having the force of law):
(i) shall subject any Lender to any tax, duty or other charge with respect to any Loan made by it or any Letter of Credit, or its obligation to make or issue any of the foregoing, or shall change the basis of taxation of payments to such Lender of the principal of or interest on any Loan made by it or any Letter of Credit, or its obligation to make or issue any of the foregoing (except for changes in the rate of tax on the overall net income of such Lender imposed by the jurisdiction, at any level, in which the principal executive office of such Lender is located); or
(ii) shall impose, modify or deem applicable any reserve (including, without limitation, any reserve imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or shall impose on any Lender or the interbank eurodollar market any other condition affecting its Eurodollar Loans or its other Loans; and the result of any of the foregoing is to increase the cost to such Lender of making or maintaining its Loans or issuing or participating in Letters of Credit, or to reduce the amount of any sum received or receivable by such Lender under this Agreement or any other Credit Document by any amount deemed by such Lender to be material, then, within fifteen (15) days after receipt of written demand from such Lender, the Company agrees to pay to such Lender such additional amount or amounts as will compensate such Lender for such increased cost or reduction. A certificate of such Lender setting forth in reasonable detail the basis for determining such additional amount or amounts necessary to compensate such Lender shall be conclusive in the absence of manifest error.
(b) If any Lender shall have determined that the introduction of any applicable law, rule, regulation or guideline regarding capital adequacy, or any change therein or any change in the interpretation or administration thereof by any Governmental Autho...
Increased Cost. If any Regulatory Change:
(a) shall subject the Lender to any tax, duty or other charge with respect to its Eurodollar Rate Advances, its obligation to make Eurodollar Rate Advances or shall change the basis of taxation of payment to the Lender of the principal of or interest on Eurodollar Rate Advances or any other amounts due under this Agreement in respect of Eurodollar Rate Advances or its obligation to make Eurodollar Rate Advances (except for changes in the rate of tax on the overall net income of the Lender imposed by the jurisdiction in which the Lender's principal office is located); or
(b) shall impose, modify or deem applicable any reserve, special deposit, capital requirement or similar requirement (including, without limitation, any such requirement imposed by the Board, but excluding with respect to any Eurodollar Rate Advance any such requirement to the extent included in calculating the applicable Adjusted Eurodollar Rate) against assets of, deposits with or for the account of, or credit extended by, the Lender or shall impose on the Lender or on the interbank Eurodollar market any other condition affecting its Eurodollar Rate Advances or its obligation to make Eurodollar Rate Advances; and the result of any of the foregoing is to increase the cost to the Lender of making or maintaining any Eurodollar Rate Advance, or to reduce the amount of any sum received or receivable by the Lender under this Agreement or under the Note, then, within 30 days after demand by the Lender, the Borrower shall pay to the Lender such additional amount or amounts as will compensate the Lender for such increased cost or reduction. The Lender will promptly notify the Borrower of any event of which it has knowledge, occurring after the date hereof, which will entitle the Lender to compensation pursuant to this Section. A certificate of the Lender claiming compensation under this Section, setting forth the additional amount or amounts to be paid to it hereunder and stating in reasonable detail the basis for the charge and the method of computation, shall be conclusive in the absence of error. In determining such amount, the Lender may use any reasonable averaging and attribution methods. Failure on the part of the Lender to demand compensation for any increased costs or reduction in amounts received or receivable with respect to any Interest Period shall not constitute a waiver of the Lender's rights to demand compensation for any increased costs or reduction in am...
Increased Cost. The Borrower shall pay to the Bank from time to time such amounts as the Bank may determine to be necessary to compensate the Bank for any costs incurred by the Bank which the Bank determines are attributable to its making or maintaining any LIBOR or Fixed Rate Loans hereunder or its obligation to make any such Loans hereunder, or any reduction in any amount receivable by the Bank under this Agreement or the Note in respect of any such Loans or such obligation (such increases in costs and reductions in amounts receivable being herein called "Additional Costs"), resulting from any change after the date of this Agreement in U.S. federal, state, municipal, or foreign laws or regulations (including Regulation D), or the adoption or making after such date of any interpretations, directives, or requirements applying to a class of banks including the Bank of or under any U.S. federal, state, municipal, or any foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof ("Regulatory Change"), which: (1) changes the basis of taxation of any amounts payable to the Bank under this Agreement or the Note in respect of any of such Loans (other than taxes imposed on the overall net income of the Bank or of its Lending Office for any of such Loans by the jurisdiction where such Lending Office is located); or (2) imposes or modifies any reserve, special deposit, compulsory loan, or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, the Bank (including any of such Loans or any deposits referred to in the definition of LIBOR Interest Rate or Cost of Funds Rate); or (3) imposes any other condition affecting this Agreement or the Note (or any of such extensions of credit or liabilities). The Bank will notify the Borrower of any event occurring after the date of this Agreement which will entitle the Bank to compensation pursuant to this Section 2.14 as promptly as practicable after it obtains knowledge thereof and determines to request such compensation. Determinations by the Bank for purposes of this Section 2.14 of the effect of any Regulatory Change on its costs of making or maintaining Loans or on amounts receivable by it in respect of Loans, and of the additional amounts required to compensate the Bank in respect of any Additional Costs, shall be conclusive, absent manifest error, provi...
Increased Cost. (a) If any Regulatory Change: (i) shall subject any Bank to any tax, duty or other charge with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any LIBOR Loans made by it or shall change the basis of taxation of payments to any Bank or the Issuing Bank in respect thereof (of the principal of or interest on its LIBOR Loans or any other amounts due under this Agreement in respect of its LIBOR Loans or its obligation to make LIBOR Loans (except for Indemnified Taxes or Other Taxes covered by Section 2.20 and the imposition of, or any change in the rate of, any Excluded Tax payable by or with respect to amounts payable to such Bank or the Issuing Bank); or (ii) shall impose, modify or deem applicable any reserve, special deposit, capital, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or committed to be extended or participated in by, any Bank (except the Reserve Requirement reflected in the LIBOR Rate) or the Issuing Bank or (iii) shall, with respect to any Bank, the Issuing Bank or the London interbank market impose, modify or deem applicable any other condition affecting this Agreement or such Bank’s LIBOR Loans or any Letter of Credit or participation therein; and the result of any of the foregoing is to increase the cost to (or in the case of Regulation D, to impose a cost on or increase the cost to) such Bank of making or maintaining any LIBOR Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Bank or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Bank under this Agreement, then upon notice by such Bank or the Issuing Bank to the Administrative Agent and Borrower, which notice shall set forth such Bank’s supporting calculations and the details of the Requirements of Law, Borrower shall pay such Bank or the Issuing Bank, as the case may be, as additional interest, such additional amount or amounts as will compensate such Bank or the Issuing Bank for such increased cost or reduction. The determination by any Bank under this Section of the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount or amounts, the Banks may use ...
Increased Cost. If after the Closing Date any change in applicable law, regulation or regulatory requirement or in the interpretation or application thereof by any Authority shall:
(a) subject any Lender or Participant to any Indemnified Taxes or Other Taxes; or
(b) change the basis of taxation to any Lender or Participant of payments of principal or interest or any other payment due or to become due pursuant to this Agreement (other than a change in the basis effected by the United States of America, the State or the City of New York or any governmental subdivision or other taxing authority having jurisdiction over such Lender or Participant (unless such jurisdiction is asserted solely by reason of the activities of any Security Party) or such other jurisdiction where the Advances may be payable); or
(c) impose, modify or deem applicable any reserve or capital adequacy requirements or require the making of any special deposits against or in respect of any assets or liabilities of, deposits with or for the account of, or loans by, any Lender or Participant; or
(d) impose on any Lender or Participant any other condition affecting the Facility or any part thereof; and the result of the foregoing is either to increase the cost to such Lender or Participant of making available or maintaining the Facility or any part thereof or to reduce the rate of return on assets or equity of such Lender or Participant or the amount of any payment received by such Lender or Participant, then and in any such case if such increase or reduction in the opinion of such Lender or Participant materially affects the interests of such Lender or Participant under or in connection with this Agreement:
(i) such Lender or Participant shall notify the Borrower and the Facility Agent in writing of the happening of such event;
(ii) the Borrowers agree forthwith upon receipt of notice from such Lender or Participant as aforesaid to pay to such Lender or Participant such amount as such Lender or Participant certifies to be necessary to compensate such Lender or Participant for such additional cost or such reduction.
(e) Any such notice referred to in subsections (i) and (ii) of this Section 12.2 may be made by a Lender or Participant which notice shall set forth in reasonable detail the amount or amount necessary to compensate such Lender or Participant at any time before or within one (1) year after any repayment of the outstanding Facility Amount; provided, however, that before making any such demand, such...
Increased Cost. If any Change in Law: (a) shall subject such Buyer (or its LIBOR Lending Office) to any tax, duty or other charge with respect to this Agreement or any Transaction or change the basis of taxation of payments to the Buyer in respect thereof (except for changes in the rate of tax on the overall net income of Buyer or its LIBOR Lending Office imposed by the jurisdiction in which Buyer's principal executive office or LIBOR Lending Office is located); (b) shall impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by Buyer (or its LIBOR Lending Office), or shall impose on Buyer (or its LIBOR Lending Office) or the foreign exchange and interbank markets any other condition affecting this Agreement or the making or maintaining of Transactions hereunder; or (c) shall impose on the Buyer any other condition: and the result of any of the foregoing is to increase the cost to such Buyer, by an amount which the Buyer deems to be material, of entering, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, then in any such case, the Seller shall promptly pay the Agent (for distribution to such Buyer) such additional amount or amounts as calculated by the Buyer in good faith as will compensate the Buyer for such increased cost or reduced amount. A certificate of a Buyer, prepared in good faith and in reasonable detail by such Buyer and submitted to the Seller and the Agent, setting forth the basis for determining such additional amount or amounts necessary to compensate such Buyer shall be conclusive and binding for all purposes, absent manifest error.
Increased Cost. If, after the date hereof, any Regulatory -------------- Change or compliance with any request or directive (whether or not having the force of law) of any governmental authority, central bank or comparable agency:
(i) shall subject any Lender to any tax, duty or other charge with respect to Eurodollar Advances or Balance Funded Rate Advances, its Note, or its obligation to make Eurodollar Advances or Balance Funded Rate Advances, or shall change the basis of taxation of payment to such Lender of the principal of or interest on Eurodollar Advances or Balance Funded Rate Advances or any other amounts due under this Agreement in respect of Eurodollar Advances or Balance Funded Rate Advances or its obligation to make Eurodollar Advances or Balance Funded Rate Advances (except for changes in the rate of tax on the overall net income of such Lender imposed by the laws of the United States or any jurisdiction in which such Lender's principal office is located); or
(ii) shall impose, modify or deem applicable any reserve, special deposit, capital requirement or similar requirement (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding any such requirement to the extent included in calculating the Adjusted Eurodollar Rate) against assets of, deposits with or for the account of, or credit extended by, any Lender or shall impose on any Lender or on the interbank Eurodollar market any other condition affecting Eurodollar Advances or Balance Funded Rate Advances, such Lender's Note, or its obligation to make Eurodollar Advances or Balance Funded Rate Advances; and the result of any of the foregoing is to increase the cost to such Lender of making or maintaining any Eurodollar Advance or Balance Funded Rate Advance, or to reduce the amount of any sum received or receivable by such Lender under this Agreement or under its Note, then, within 30 days after written demand by such Lender, the Company shall pay to such Lender such additional amount or amounts as will compensate such Lender for such increased cost or reduction; provided, that the Company shall not be obligated to pay any such additional amount (i) unless such Lender shall first have notified the Company in writing that it intends to seek such compensation pursuant to this Section, or (ii) to the extent such additional amount is attributable to the period ending 91 days prior to the date of the first such notice with respect to such R...
Increased Cost. The Borrower agrees to pay to the Bank, the amount of any cost incurred by the Bank or any of its affiliates as a result of:
a) the introduction of, or any change in, or any change in the interpretation, administration or application of, any law or regulation; and/or
b) compliance with any law or regulation made effective after the date of the Sanction Letter; and/or
c) additional solicitors and lawyer’s fees or introduction of new or additional stamp duty, registration charges and other incidental expenses incurred or levied in connection with the Facility. The terms "law" and "regulation" in this clause shall include, without limitation, any law or regulation, circular or notification concerning capital adequacy, prudential limits, liquidity, reserve assets or tax.
Increased Cost. If any Change in Law subsequent to the Effective Date:
(a) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of a Buyer which is not otherwise included in the determination of the LIBOR Rate hereunder; or
(b) shall impose on a Buyer any other condition; and the result of any of the foregoing is to increase the cost to such Buyer, by an amount which such Buyer deems to be material, of entering, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, then, in any such case, the Seller shall promptly pay the Administrative Agent (for distribution to such Buyer) such additional amount or amounts as calculated by the Buyer in good faith as will compensate the Buyer for such increased cost or reduced amount receivable.