Commitment Fee/OID Sample Clauses
The Commitment Fee/OID clause defines the fees a borrower must pay to a lender for making funds available, even if the borrower does not ultimately draw down the full amount. In practice, a commitment fee is typically calculated as a percentage of the undrawn loan commitment and is paid periodically, while Original Issue Discount (OID) represents an upfront fee deducted from the loan proceeds at closing. This clause ensures the lender is compensated for reserving capital and incentivizes the borrower to utilize the committed funds efficiently, addressing the risk of unused credit lines and aligning interests between both parties.
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Commitment Fee/OID. Borrowers agree to pay to each Lender a fee (the “Commitment Fee”) in an amount equal to 4.50% of such Lender’s Commitment in cash or original issue discount (such original issue discount to be credited to the account of such Lender in accordance with Section 2.01(c)), at the election of each Lender made by notice given to the Administrative Agent no later than one (1) Business Day prior to the Closing Date. Such fee is fully earned as of the Closing Date and shall be payable on the initial funding of the Advances under this Agreement.