Fees- Front End Fee– Commitment Fee Clause Samples
The 'Fees- Front End Fee– Commitment Fee' clause defines the types of fees a borrower must pay to a lender at the outset and during the commitment period of a loan agreement. Typically, a front end fee is a one-time charge paid upon the signing or funding of the loan, while a commitment fee is an ongoing charge calculated on the unused portion of the loan facility during the period the lender commits to making funds available. This clause ensures that the lender is compensated for both the administrative costs of setting up the loan and for reserving funds for the borrower, even if the full amount is not drawn, thereby allocating costs and clarifying financial obligations.
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Fees- Front End Fee– Commitment Fee. (a) The Borrower shall pay to the Agent for the account of the Arranger a front end flat fee corresponding to zero point ninety per cent (0.90%) of the amount of the Loan actually drawn down, payable on the Drawdown Date of the Loan.
(b) The Borrower shall pay to the Agent quarterly in arrears during the period from and including 28 August 2018, being the date of acceptance by the Borrower of the Commitment Letter, until the earlier of (i) 25 October 2018, (ii) the Drawdown Date or (iii) the date upon which the Borrower cancels the facility in writing to the Agent prior to the Drawdown Date, a commitment fee at the rate of zero point fifty per cent (0.50%) per annum on the amount of the Commitment.
(c) The Front End Fee and Commitment Fee referred to in this Clause 20.1 shall not be refundable.