Increased Costs and Reduced Return Clause Samples
The "Increased Costs and Reduced Return" clause is designed to protect a party—typically a lender or service provider—if changes in law, regulation, or circumstances increase their costs or decrease their expected financial return under an agreement. In practice, this clause allows the affected party to notify the other party and request compensation or adjustment to the contract terms to offset the financial impact. For example, if new regulations require a bank to hold more capital, increasing its costs, the bank can invoke this clause to recover those costs from the borrower. The core function of this clause is to allocate the risk of unforeseen regulatory or economic changes, ensuring that the party providing services or financing is not unfairly disadvantaged by external factors beyond their control.
Increased Costs and Reduced Return. (a) If any Lender, any Agent or the L/C Issuer shall have determined that any Change in Law shall (i) subject such Agent, such Lender or the L/C Issuer, or any Person controlling such Agent, such Lender or the L/C Issuer to any tax, duty or other charge with respect to this Agreement or any Loan made by such Agent or such Lender or any Letter of Credit issued by the L/C Issuer, or change the basis of taxation of payments to such Agent, such Lender or the L/C Issuer or any Person controlling such Agent, such Lender or the L/C Issuer of any amounts payable hereunder (except for Indemnified Taxes and Excluded Taxes), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against any Loan, any Letter of Credit or against assets of or held by, or deposits with or for the account of, or credit extended by, such Agent, such Lender or the L/C Issuer or any Person controlling such Agent, such Lender or the L/C Issuer or (iii) impose on such Agent, such Lender or the L/C Issuer or any Person controlling such Agent, such Lender or the L/C Issuer any other condition regarding this Agreement or any Loan or Letter of Credit, and the result of any event referred to in clauses (i), (ii) or (iii) above shall be to increase the cost to such Agent, such Lender or the L/C Issuer of making any Loan, issuing, guaranteeing or participating in any Letter of Credit, or agreeing to make any Loan or issue, guaranty or participate in any Letter of Credit, or to reduce any amount received or receivable by such Agent, such Lender or the L/C Issuer hereunder, then, upon demand by such Agent, such Lender or the L/C Issuer, the Borrowers shall pay to such Agent, such Lender or the L/C Issuer such additional amounts as will compensate such Agent, such Lender or the L/C Issuer for such increased costs or reductions in amount; provided, however, that notwithstanding anything to the contrary in this Section 2.10(a), it shall be a condition to a Lender’s or L/C Issuer’s exercise of its rights, if any, under this Section 2.10(a) that such Lender or L/C Issuer shall generally be exercising similar rights with respect to borrowers under similar agreements.
(b) If any Agent, any Lender or the L/C Issuer shall have determined that any Change in Law either (i) affects or would affect the amount of capital required or expected to be maintained by such Agent, such Lender or the L/C Issuer or any Person controlling such Agent, such Lender or the L/C Issuer, and such ...
Increased Costs and Reduced Return. (a) If any Secured Party shall have determined that any Change in Law shall (i) subject such Secured Party, or any Person controlling such Secured Party to any tax, duty or other charge with respect to this Agreement or any Loan made by such Agent or such Lender (except for (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against any Loan or against assets of or held by, or deposits with or for the account of, or credit extended by, such Secured Party or any Person controlling such Secured Party or (iii) impose on such Secured Party or any Person controlling such Secured Party any other condition regarding this Agreement or any Loan, and the result of any event referred to in clauses (i), (ii) or (iii) above shall be to increase the cost to such Secured Party of making any Loan, or agreeing to make any Loan, or to reduce any amount received or receivable by such Secured Party hereunder, then, upon demand by such Secured Party, the Borrower shall pay to such Secured Party such additional amounts as will compensate such Secured Party for such increased costs or reductions in amount.
(b) If any Secured Party shall have determined that any Change in Law either (i) affects or would affect the amount of capital required or expected to be maintained by such Secured Party or any Person controlling such Secured Party, and such Secured Party determines that the amount of such capital is increased as a direct or indirect consequence of any Loans made or maintained, such Secured Party’s or such other controlling Person’s other obligations hereunder, or (ii) has or would have the effect of reducing the rate of return on such Secured Party’s or such other controlling Person’s capital to a level below that which such Secured Party or such controlling Person could have achieved but for such circumstances as a consequence of any Loans made or maintained, or any agreement to make Loans, or such Secured Party’s or such other controlling Person’s other obligations hereunder (in each case, taking into consideration, such Secured Party’s or such other controlling Person’s policies with respect to capital adequacy), then, upon demand by such Secured Party, the Borrower shall pay to such Secured Party from time to time such additional amounts as will compensate such Secured Party for such cost of main...
Increased Costs and Reduced Return. (a) Subject to the limitation in Section 2.03(a)(ii), if, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements, in the case of Eurocurrency Rate Advances, included in the Eurocurrency Rate Reserve Percentage), after the date hereof, in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law) issued after the date hereof, there shall be any increase in the cost to any Bank of agreeing to make, making, funding or maintaining Eurocurrency Rate Advances (including, without limitation, any conversion of any Advance denominated in an Alternative Currency other than the Euro into an Advance denominated in Euro), by an amount reasonably deemed by such Bank to be material, then from time to time, within ten days after demand by such Bank (with a copy of such demand to the Administrative Agent), such Borrower shall pay to the Administrative Agent for the account of such Bank additional amounts sufficient to compensate such Bank for such increased cost; provided that no Borrower shall be obligated to pay any such amount to the extent such amount results from a change, guideline or request which took effect more than 90 days prior to the date of such demand.
(b) Subject to the limitation in Section 2.03(a)(ii), if any Bank shall have determined that the adoption, after the date hereof, of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change 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 Bank (or its Applicable Lending Office) with any request or directive issued after the date hereof regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Bank's capital as a consequence of its obligations hereunder to a level below that which such Bank could have achieved but for such adoption, change or compliance by an amount reasonably deemed by such Bank to be material, then from time to time, within ten days after demand by such Bank (with a copy of such demand to the Administrative Agent), the Company shall pay to the Administrative A...
Increased Costs and Reduced Return. If Lender shall have determined that the adoption or implementation of, or any change in, any law, rule, treaty or regulation, or any policy, guideline or directive of, or any change in, the interpretation or administration thereof by, any court, central bank or other administrative or governmental authority, or compliance by Lender with any directive of, or guideline from, any central bank or other Governmental Authority or the introduction of, or change in, any accounting principles applicable to Lender (whether or not having the force of law), in each case, occurring after the date hereof, shall (i) subject the Lender to any tax, duty or other charge with respect to this Agreement or any Loan made hereunder, or change the basis of taxation of payments to Lender of any amounts payable hereunder (except for taxes on the overall net income of Lender), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against any Loan, or against assets of or held by, or deposits with or for the account of, or credit extended by, Lender, or (iii) impose on Lender any other condition regarding this Agreement or any Loan, and the result of any event referred to in clauses (i), (ii) or (iii) above shall be to increase the cost to Lender of making any Loan, or agreeing to make any Loan or to reduce any amount received or receivable by Lender, then, upon demand by Lender, the Borrower shall pay to Lender such additional amounts as will compensate the Lender for such increased costs or reductions in amount. All amounts payable under this Section shall bear interest from the date of demand by the Lender until payment in full to the Lender at the highest interest rate applicable to the Obligations. With respect to this Section 9.2, Lender shall treat Borrower no differently than Lender treats other similarly situated Borrowers. A certificate of the Lender claiming compensation under this Section, specifying the event herein above described and the nature of such event shall be submitted by the Lender to the Borrower, setting forth the additional amount due and an explanation of the calculation thereof, and the Lender’s reasons for invoking the provisions of this Section, and the same shall be final and conclusive absent manifest error.
Increased Costs and Reduced Return. 2.10.1 If, on or after the date hereof, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change 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 Short Term Trade Series Holder (or its Holding Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency, (i) shall subject any Short Term Trade Series Holder (or its Holding Office) to any tax, duty or other charge with respect to one or more of its Short Term Trade Series Notes, or shall change the basis of taxation of payments to any Short Term Trade Series Holder (or its Holding Office) of the principal of or interest on its Short Term Trade Series Notes or any other amounts due under this Indenture or any Short Term Trade Series Notes, except for the introduction of, or changes in the rate of, tax on the overall net income of such Short Term Trade Series Holder (or its Holding Office), or franchise taxes, imposed by the jurisdiction (or any political subdivision or taxing authority thereof) under the laws of which such Short Term Trade Series Holder is organized (or in which such Short Term Trade Series Holder's Holding Office is located); or (ii) shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System and minimum reserve requirements of the European Central Bank but excluding any such requirement included in an applicable Eurodollar Reserve Percentage), special deposit, insurance assessment or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Short Term Trade Series Holder (or its Holding Office) or shall impose on any Short Term Trade Series Holder (or its Holding Office) or the London interbank market any other condition affecting the purchasing, owning, holding or maintaining of any one or more Short Term Trade Series Notes by such Short Term Trade Series Holder (or its Holding Office) and the result of any of the foregoing is to increase the cost to such Short Term Trade Series Holder (or its Holding Office or any holding company of which such Short Term Trade Series Holder is a subsidiary) of purchasing, owning, holding or maintaining any one or more of...
Increased Costs and Reduced Return. (a) If any Lender or any Agent shall have determined that the adoption or implementation of, or any change in, any law, rule, treaty or regulation, or any policy, guideline or directive of, or any change in, the interpretation or administration thereof by, any court, central bank or other administrative or Governmental Authority, or compliance by any Lender or any Agent or any Person controlling any such Lender or any such Agent with any directive of, or guideline from, any central bank or other Governmental Authority or the introduction of, or change in, any accounting principles applicable to any Lender, any Agent or any Person controlling any such Lender, any such Agent (in each case, whether or not having the force of law) (each, a “Change in Law”), shall (i) subject any Lender, any Agent or any Person controlling any such Lender or any such Agent to any tax, duty or other charge with respect to this Agreement or the Revolving Loans made by such Lender or such Agent or change the basis of taxation of payments to any Lender, any Agent or any Person controlling any such Lender or any such Agent of any amounts payable hereunder (except for taxes on the overall net income of any Lender, any Agent or any Person controlling any such Lender or any such Agent), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against the Revolving Loans, or against assets of or held by, or deposits with or for the account of, or credit extended by, any Lender, any Agent or any Person controlling any such Lender or any such Agent or (iii) impose on any Lender, any Agent or any Person controlling any such Lender or any such Agent any other condition regarding this Agreement or the Revolving Loans, and the result of any event referred to in clauses (i), (ii) or (iii) above shall be to increase the cost to any Lender or any Agent of making the Revolving Loans, or agreeing to make the Revolving Loans or to reduce any amount received or receivable by any Lender or any Agent hereunder, then, upon demand by any such Lender or any such Agent, the Borrower shall pay to such Lender or such Agent such additional amounts as will compensate such Lender, or such Agent for such increased costs or reductions in amount.
(b) If any Lender or any Agent shall have determined that any Change in Law either (i) affects or would affect the amount of capital required or expected to be maintained by any Lender, any Agent or any Person controlling such Lender or ...
Increased Costs and Reduced Return. (a) If any Secured Party shall have determined in good faith that any Change in Law shall (i) subject such Secured Party, or any Person controlling such Secured Party to any tax, duty or other charge with respect to this Agreement or any Loan made by such Agent or such Lender, or change the basis of taxation of payments to such Secured Party or any Person controlling such Secured Party of any amounts payable hereunder (except for taxes on the overall net income of such Secured Party or any Person controlling such Secured Party), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against any Loan or against assets of or held by, or deposits with or for the account of, or credit extended by, such Secured Party or any Person controlling such Secured Party or (iii) impose on such Secured Party or any Person controlling such Secured Party any other condition regarding this Agreement or any Loan, and the result of any event referred to in clauses (i), (ii) or (iii) above shall be to increase the cost to such Secured Party of making any Loan, or agreeing to make any Loan, or to reduce any amount received or receivable by such Secured Party hereunder, then, upon demand by such Secured Party, the Borrowers shall pay to such Secured Party such additional amounts as will compensate such Secured Party for such increased costs or reductions in amount.
(b) If any Secured Party shall have determined in good faith that any Change in Law either (i) affects or would affect the amount of capital required or expected to be maintained by such Secured Party or any Person controlling such Secured Party, and such Secured Party determines in good faith that the amount of such capital is increased as a direct or indirect consequence of any Loans made or maintained hereunder, or such Secured Party's (or such other controlling Person's) other obligations hereunder, or (ii) has or would have the effect of reducing the rate of return on such Secured Party's or such other controlling Person's capital to a level below that which such Secured Party or such controlling Person could have achieved but for such circumstances as a consequence of any Loans made or maintained, or any agreement to make Loans, or such Secured Party's or such other controlling Person's other obligations hereunder (in each case, taking into consideration, such Secured Party's or such other controlling Person's policies with respect to capital adequacy), then, upon demand by su...
Increased Costs and Reduced Return. If any Secured Party shall have determined that any Change in Law shall (i) subject such Secured Party, or any Person controlling such Secured Party, to any Tax with respect to this Agreement or any Term Loans, or other Obligations, or its deposits, reserves, other liabilities or capital attributable thereto, made by such Agent or such Lender, or change the basis of taxation of payments to such Secured Party or any Person controlling such Secured Party of any amounts payable hereunder (except for Indemnified Taxes and Taxes described in clauses (b) through (d) of the definition of Excluded Taxes), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against any Term Loan or against assets of or held by, or deposits with or for the account of, or credit extended by, such Secured Party or any Person controlling such Secured Party or (iii) impose on such Secured Party or any Person controlling such Secured Party any other condition regarding this Agreement or any Term Loan, and the result of any event referred to in clauses (i), (ii) or (iii) above shall be to increase the cost to such Secured Party of making any Term Loan or agreeing to make any Term Loan, or to reduce any amount received or receivable by such Secured Party hereunder, then, upon demand by such Secured Party, the Borrower shall pay to such Secured Party such additional amounts as will compensate such Secured Party for such increased costs or reductions in amount.
Increased Costs and Reduced Return. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for account of, or credit extended by, the Bank or any Participant (each of the foregoing, an “Affected Bank”);
(ii) impose on any Affected Bank any other condition affecting this Agreement or any Related Document; or
(iii) subject any Affected Bank to any tax, duty or other charge with respect to this Agreement or the Related Documents, or shall change the basis of taxation of payments to the Affected Bank of the principal of or interest with respect to the Letters of Credit or in respect of any other amounts due under this Agreement or the Related Documents (except for changes in the rate of tax on the overall net income of the Affected Bank) imposed by the jurisdiction in which the Affected Bank’s principal executive office is located; and the result of any of the foregoing shall be to increase the cost to such Affected Bank of maintaining any Letter of Credit or making any Advance or maintaining any participation therein or in the Related Documents or to reduce the amount of any sum received or receivable by such Affected Bank hereunder (whether of principal, interest or otherwise) or under any Related Document, then the Agency will pay to such Affected Lender such additional amount or amounts as will compensate such Affected Bank for such additional costs incurred or reduction suffered.
(b) If any Affected Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Affected Bank’s capital or on the capital of such Affected Bank’s holding company, if any, as a consequence of this Agreement, the Letters of Credit, any Advance made by the Bank or any participation in any of the foregoing to a level below that which such Affected Bank or such Affected Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Affected Bank’s policies and the policies of such Affected Bank’s holding company with respect to capital adequacy and liquidity), then from time to time the Agency will pay to such Affected Bank such additional amount or amounts as will compensate such Affected Bank or such Affected Bank’s holding company for any such reduction suffered.
(c) The Affected Bank will promptly notify the Agency of any event of which it has knowledge, occurring after the date hereof, ...
Increased Costs and Reduced Return. If on or after the date hereof, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change 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 Bank (or its Applicable Lending Office) or the Issuing Bank with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding with respect to any Eurocurrency Rate Advance, any such requirement with respect to which such Bank or the Issuing Bank is entitled to compensation during the relevant Interest Period under Section 2.10), special deposit, insurance assessment or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Bank (or its Applicable Lending Office) or the Issuing Bank or shall impose on any Bank (or its Applicable Lending Office) or the Issuing Bank or on the United States market for certificates of deposit or the London interbank market any other condition affecting its Eurocurrency Rate Advances, its Note or its obligation to make Eurocurrency Rate Advances and the result of any of the foregoing is to increase the cost to such Bank (or its Applicable Lending Office) or the Issuing Bank of making or maintaining any Eurocurrency Rate Advance to a Borrower, or to reduce the amount of any sum received or receivable by such Bank (or its Applicable Lending Office) or the Issuing Bank under this Agreement or under its Note with respect thereto, by an amount deemed by such Bank in its reasonable judgment to be material, then, within ten (10) days after demand by such Bank or the Issuing Bank (with a copy to the Administrative Agent), the Company shall pay to such Bank such additional amount or amounts as will compensate such Bank or the Issuing Bank for such increased cost or reduction. If any Bank or Issuing Bank shall have determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable a...