Yield Protection and Illegality Clause Samples
The Yield Protection and Illegality clause is designed to safeguard a lender’s expected returns and address situations where a loan becomes unlawful to maintain. In practice, this clause allows lenders to recover additional costs or losses if changes in law or regulations affect the profitability of a loan, or to require repayment if continuing the loan becomes illegal. Its core function is to allocate risk between the parties by ensuring lenders are not financially disadvantaged by unforeseen legal or regulatory changes, while also providing a mechanism to unwind the agreement if it cannot be lawfully performed.
Yield Protection and Illegality. 49 Section 4.1
Yield Protection and Illegality. (a) The Borrower shall be obligated to pay to the Lender all Breakage Costs.
(b) If the Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for the Lender or its Lending Office to make, maintain or fund Loans whose interest is determined by reference to the Eurodollar Rate, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of the Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower, (i) any obligation of the Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended, and (ii) if such notice asserts the illegality of the Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate Loans of the Lender shall, if necessary to avoid such illegality, be determined by the Lender without reference to the Eurodollar Rate component of the Base Rate, in each case until the Lender notifies the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (A) the Borrower shall, upon demand from the Lender, prepay or, if applicable, convert any Eurodollar Rate Loan to a Base Rate Loan (the interest rate on which Base Rate Loan shall, if necessary to avoid such illegality, be determined by the Lender without reference to the Eurodollar Rate component of the Base Rate), either on the last day of the Interest Period therefor, if the Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if the Lender may not lawfully continue to maintain such Eurodollar Rate Loans and (B) if such notice asserts the illegality of the Lender determining or charging interest rates based upon the Eurodollar Rate, the Lender shall during the period of such suspension compute the Base Rate without reference to the Eurodollar Rate component thereof until the Lender determines that it is no longer illegal for the Lender to determine or charge interest rates based upon the Eurodollar Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.
(c) If the Lender determines, in its sole discr...
Yield Protection and Illegality. Section 5.01Basis for Determining Yield Rate Inadequate or Unfair
Section 5. 02Illegality
Yield Protection and Illegality. Section 5.01 Basis for Determining Yield Rate Inadequate or Unfair................................... Section 5.02 Illegality.............................................................................. Section 5.03 Increased Cost and Reduced Return....................................................... Section 5.04 Base Rate Substituted for Adjusted LIBO Rate............................................ Section 5.05 Compensation............................................................................ Section 5.06 Payments and Computations...............................................................
Yield Protection and Illegality. Section 4.1 Increased Cost and Reduced Return......................14 Section 4.2 Limitation on Types of Loans...........................15 Section 4.3 Illegality.............................................15 Section 4.4
Yield Protection and Illegality. 4.01 Increased Cost and Reduced Return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 4.02 Limitation on Types of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 4.03 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 4.04
Yield Protection and Illegality. 34 TABLE OF CONTENTS (Continued)
Yield Protection and Illegality. (a) Basis for Determining Interest Rate Inadequate or Unfair. If on or prior to the first day of any Rental Period with respect to any Basic Rent which is determined on the basis of the Adjusted LIBO Rate:
(i) the Lessor determines that deposits in Dollars (in the applicable amounts), are not being offered in the relevant market for such Rental Period, or
(ii) the Lessor determines and gives notice to the Lessee that, as a result of conditions in or generally affecting the London interbank eurodollar market, the rates or yield for Basic Rent, determined on the basis of the LIBO Rate for any Rental Period will not adequately and fairly reflect the cost to the Lessor of making, funding or maintaining the Advances of Facility Cost giving rise to such Basic Rent for such Rental Period, the Lessor shall forthwith so notify the Lessee, whereupon,
(1) the Basic Rent for such Rental Period shall be determined on the basis of the Base Rate
(2) the obligation of the Lessor to make an Advance of any Facility Cost having Basic Rent or to continue to accrue Basic Rent based on the
Yield Protection and Illegality. In the event any amounts ------------------------------- are determined to be payable by the Lessor under the provisions of Article XI ---------- hereof, the Lessee assumes full responsibility for and shall pay such amounts directly to each Lender or the Agent, as the case may be, within five (5) days of its receipt of notice thereof, and such notice shall be presumed correct and binding upon the Lessee absent manifest error. Notwithstanding the provisions of Article XI to the ---------- Participation Agreement contrary, all covenants and obligations of the Lessor under such Article shall at all times be the direct obligations of the Lessee.
Yield Protection and Illegality. 50 Section 5.1. Capital Adequacy.............................................................50 Section 5.2. Additional Costs.............................................................50 Section 5.3. Limitation on LIBOR Advances.................................................51 Section 5.4. Illegality...................................................................52 Section 5.5. Treatment of Certain LIBOR Advances..........................................52 Section 5.6. Compensation.................................................................53