Affected Bank’s Assignment and Acceptance Clause Samples
The "Affected Bank’s Assignment and Acceptance" clause allows a bank that is unable to fulfill its obligations under a loan agreement—often due to regulatory or financial constraints—to transfer its rights and obligations to another eligible financial institution. In practice, this means that if a bank becomes an "affected bank" (for example, because it cannot fund its portion of a loan due to changes in law or increased costs), it can assign its position to a new lender, subject to the consent of the borrower and sometimes the administrative agent. This clause ensures continuity of the loan facility by enabling the replacement of non-performing or restricted lenders, thereby minimizing disruption and maintaining the integrity of the lending syndicate.
Affected Bank’s Assignment and Acceptance. If an Affected Bank being replaced pursuant to this Section 2.14 does not execute and deliver to the Eligible Assignee a duly completed Assignment and Acceptance and/or any other documentation necessary to reflect such replacement within a period of time deemed reasonable by the Administrative Agent after the date on which the Eligible Assignee executes and delivers such Assignment and Acceptance and/or such other related documentation contemplated by this Section 2.14, then such Affected Bank shall be deemed to have executed and delivered such Assignment and Acceptance and/or such other documentation as of such date and the Borrower shall be entitled (but not obligated) to execute and deliver such Assignment and Acceptance and/or such other documentation on behalf of such Affected Bank.