Increased Cost Clause Samples
The Increased Cost clause allows a party to adjust the terms of an agreement if external factors cause their costs to rise unexpectedly. Typically, this clause applies when changes in law, regulation, or market conditions increase the expenses associated with fulfilling contractual obligations, such as higher taxes, tariffs, or compliance costs. Its core function is to allocate the risk of unforeseen cost increases, ensuring that the affected party is not unfairly burdened and that the contract remains fair and viable for both sides.
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Increased Cost. If the introduction of, any change in or the implementation of any Applicable Law, (including any capital adequacy requirement but excluding any taxes on the overall net income of a Lender or upon the overall capital of a Lender), regulation, treaty or official directive now or hereafter in effect (whether or not having the force of law) or any change in the interpretation or application thereof by any court or by any judicial or Governmental Authority charged with the interpretation or administration thereof, or if compliance by any Lender with any request from any central bank or other fiscal, monetary or other authority (whether or not having the force of law) (individually, a "Circumstance"):
(a) subjects a Lender to any Tax, or changes the basis of taxation of payments due to a Lender or increases any existing Tax, on payments of principal, interest or other amounts payable by the Borrower to a Lender under this Agreement;
(b) imposes, modifies or deems applicable any reserve, special deposit, capital adequacy, regulatory or similar requirement against assets or liabilities held by a Lender, or deposits of or for the account of a Lender, or loans by a Lender, or any other acquisition of funds for loans by a Lender or commitments by a Lender to fund loans or obligations of a Lender in respect of bankers' acceptances accepted by such Lender; or
(c) imposes on a Lender any other condition with respect to this Agreement; and the result of (a), (b) or (c) is, in the sole determination of such Lender acting reasonably and in good faith, to increase the cost in respect of an Accommodation to such Lender or to reduce the income receivable by such Lender in respect of an Accommodation or standby fees payable pursuant to Section 5.6, such Lender shall promptly notify the Agent. The Agent shall promptly notify the Borrower and the Borrower shall pay to the Agent for the benefit of such Lender that amount which compensates such Lender for such additional cost or reduction in income (except to the extent such increase in costs or reduction in income is reflected in or recovered by an increase in the Prime Rate or the US Base Rate) ("Additional Compensation") on the next Libor Interest Date in the case of a Libor Loan, on the next date on which standby fees are payable under Section 5.6 in the case of standby fees and the next date of issuance of any Bankers' Acceptances or on the next Interest Date in any other case (and each successive Libor Interest Date, or Int...
Increased Cost. (a) If, after the Closing Date, the adoption of, or any change in, any applicable law, rule or regulation (other than the implementation of FATCA, as in effect, with respect to any Purchaser, as of the date such Purchaser becomes a party to this Agreement), or any change in the interpretation or administration of any applicable law, rule or regulation (other than FATCA) by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Purchaser with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall impose on any Purchaser any condition affecting its Note and the result is to increase the cost to (or to impose a cost on) such Purchaser of making or maintaining its Note, or to reduce the amount of any sum received or receivable by such Purchaser under this Agreement or under its Note with respect thereto, then upon demand by such Purchaser (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to Agent and the Companies), the Companies shall pay directly to such Purchaser such additional amount as will compensate such Purchaser for such increased cost or such reduction to the extent arising from and in connection with, the Notes, so long as such amounts have accrued on or after the day which is 180 days prior to the date on which such Purchaser first made demand therefor; provided, that if the event giving rise to such costs or reductions has retroactive effect, such 180 day period shall be extended to include the period of retroactive effect.
(b) If any Purchaser shall reasonably determine that any change in, or the adoption or phase-in of, any applicable law, rule or regulation regarding capital adequacy, 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 the compliance by any Purchaser or any Person controlling such Purchaser with any request or directive 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 Purchaser’s or such controlling Person’s capital as a consequence of such Purchaser’s oblig...
Increased Cost. If any Regulatory Change:
(a) shall subject the Lender to any tax, duty or other charge with respect to its Eurodollar Rate Advances, its obligation to make Eurodollar Rate Advances or shall change the basis of taxation of payment to the Lender of the principal of or interest on Eurodollar Rate Advances or any other amounts due under this Agreement in respect of Eurodollar Rate Advances or its obligation to make Eurodollar Rate Advances (except for changes in the rate of tax on the overall net income of the Lender imposed by the jurisdiction in which the Lender's principal office is located); or
(b) shall impose, modify or deem applicable any reserve, special deposit, capital requirement or similar requirement (including, without limitation, any such requirement imposed by the Board, but excluding with respect to any Eurodollar Rate Advance any such requirement to the extent included in calculating the applicable Adjusted Eurodollar Rate) against assets of, deposits with or for the account of, or credit extended by, the Lender or shall impose on the Lender or on the interbank Eurodollar market any other condition affecting its Eurodollar Rate Advances or its obligation to make Eurodollar Rate Advances; and the result of any of the foregoing is to increase the cost to the Lender of making or maintaining any Eurodollar Rate Advance, or to reduce the amount of any sum received or receivable by the Lender under this Agreement or under the Note, then, within 30 days after demand by the Lender, the Borrower shall pay to the Lender such additional amount or amounts as will compensate the Lender for such increased cost or reduction. The Lender will promptly notify the Borrower of any event of which it has knowledge, occurring after the date hereof, which will entitle the Lender to compensation pursuant to this Section. A certificate of the Lender claiming compensation under this Section, setting forth the additional amount or amounts to be paid to it hereunder and stating in reasonable detail the basis for the charge and the method of computation, shall be conclusive in the absence of error. In determining such amount, the Lender may use any reasonable averaging and attribution methods. Failure on the part of the Lender to demand compensation for any increased costs or reduction in amounts received or receivable with respect to any Interest Period shall not constitute a waiver of the Lender's rights to demand compensation for any increased costs or reduction in am...
Increased Cost. The Borrower shall pay to the Bank from time to time such amounts as the Bank may determine to be necessary to compensate the Bank for any costs incurred by the Bank which the Bank determines are attributable to its making or maintaining any LIBOR or Fixed Rate Loans hereunder or its obligation to make any such Loans hereunder, or any reduction in any amount receivable by the Bank under this Agreement or the Note in respect of any such Loans or such obligation (such increases in costs and reductions in amounts receivable being herein called "Additional Costs"), resulting from any change after the date of this Agreement in U.S. federal, state, municipal, or foreign laws or regulations (including Regulation D), or the adoption or making after such date of any interpretations, directives, or requirements applying to a class of banks including the Bank of or under any U.S. federal, state, municipal, or any foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof ("Regulatory Change"), which: (1) changes the basis of taxation of any amounts payable to the Bank under this Agreement or the Note in respect of any of such Loans (other than taxes imposed on the overall net income of the Bank or of its Lending Office for any of such Loans by the jurisdiction where such Lending Office is located); or (2) imposes or modifies any reserve, special deposit, compulsory loan, or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, the Bank (including any of such Loans or any deposits referred to in the definition of LIBOR Interest Rate or Cost of Funds Rate); or (3) imposes any other condition affecting this Agreement or the Note (or any of such extensions of credit or liabilities). The Bank will notify the Borrower of any event occurring after the date of this Agreement which will entitle the Bank to compensation pursuant to this Section 2.14 as promptly as practicable after it obtains knowledge thereof and determines to request such compensation. Determinations by the Bank for purposes of this Section 2.14 of the effect of any Regulatory Change on its costs of making or maintaining Loans or on amounts receivable by it in respect of Loans, and of the additional amounts required to compensate the Bank in respect of any Additional Costs, shall be conclusive, absent manifest error, provi...
Increased Cost. (a) If after the effective date hereof, the adoption of any applicable law, rule or regulation, 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 with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency (a "Regulatory Change"):
(A) shall subject any Bank to any tax, duty or other charge with respect to its LIBOR Loans, its Revolving Credit Notes or its obligation to make LIBOR Loans hereunder, or shall change the basis of taxation of payments to any Bank of the principal of or interest on its LIBOR Loans or any other amounts due under this Agreement in respect of its LIBOR Loans or its obligation to make LIBOR Loans (except for taxes on or changes in the rate of tax on the overall net income of such Bank); or
(B) shall impose, modify or deem applicable any reserve (including, without limitation, any reserve imposed by the Board of Governors of the Federal Reserve System), special deposit, capital or similar requirement against assets of, deposits with or for the account of, or credit extended or committed to be extended by, any Bank or shall, with respect to any Bank or the Interbank Eurodollar market, impose, modify or deem applicable any other condition affecting its LIBOR Loans, its Revolving Credit Notes or its obligation to make LIBOR Loans; and the result of any of the foregoing is to increase the cost to (or in the case of Regulation D, to impose a cost on or increase the cost to) such Bank of making or maintaining any LIBOR Loan, or to reduce the amount of any sum received or receivable by such Bank under this Agreement or under its Notes with respect thereto, by an amount deemed by such Bank, in its good faith judgment, to be material, and if such Bank is not otherwise fully compensated for such increase in cost or reduction in amount received or receivable by virtue of the inclusion of the reference to LIBOR Reserve Percentage in the calculation of the interest rate applicable to LIBOR Loans, then, within fifteen (15) days after notice by such Bank to Borrower together with a copy of the official notice of the applicable change in law (if applicable) and a work sheet showing how the change in cost or reduction or increase in amount received or receivable was calculated (with a copy ...
Increased Cost. If the result of any change in, or in the interpretation, implementation or application of, or the introduction of, any law or any regulation (whether or not having the force of law, but, if not having the force of law, with which the Lender or, as the case may be, its holding company habitually complies), including (without limitation) those relating to Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits and special deposits or other banking or monetary controls or requirements which affect the manner in which the Lender allocates capital resources to its obligations hereunder (including, without limitation, those resulting from the implementation or application of or compliance with the Basel II Accord or the Basel III Accord or any Basel II Regulation or the Basel III Accord or any Basel III Regulation or any subsequent accord, approach or regulation thereto) (collectively, “Capital Adequacy Law”) or compliance by the Lender with any such Capital Adequacy Law, is to:
(a) increase the cost to, or impose an additional cost on, the Lender or its holding company in making or keeping the Commitment available or maintaining or funding all or part of the Loan; and/or
(b) subject the Lender to Taxes or change the basis of Taxation of the Lender with respect to any payment under any of the Finance Documents (other than Taxes or Taxation on the overall net income, profits or gains of the Lender imposed in the jurisdiction in which its principal or lending office under this Agreement is located); and/or
(c) reduce the amount payable or the effective return to the Lender under any of the Finance Documents; and/or
(d) reduce the Lender’s or its holding company rate of return on its overall capital by reason of a change in the manner in which it is required to allocate capital resources to the Lender’s obligations under any of the Finance Document; and/or
(e) require the Lender or its holding company to make a payment or forgo a return on or calculated by references to any amount received or receivable by it under any of the Finance Documents is required; and/or
(f) require the Lender or its holding company to incur or sustain a loss (including a loss of future potential profits) by reason of being obliged to deduct all or part of the Commitment or the Loan from its capital for regulatory purposes, then and in each case (subject to Clause 12.5 (Exception)):
(i) the Lender shall notify the Borrower in writing of such event promptly upon its beco...
Increased Cost. If, after the date hereof, any Regulatory Change or compliance with any request or directive (whether or not having the force of law) of any governmental authority, central bank or comparable agency:
(i) shall subject the Bank to any tax, duty or other charge with respect to Fixed Rate Borrowings or Floating Eurodollar Rate Borrowings or its obligation to make Fixed Rate Borrowings or Floating Eurodollar Rate Borrowings, or shall change the basis of taxation of payment to the Bank of the principal of or interest on Fixed Rate Borrowings or Floating Eurodollar Rate Borrowings or any other amounts due under this Agreement in respect of Fixed Rate Borrowings or Floating Eurodollar Rate Borrowings or its obligation to make Fixed Rate Borrowings or Floating Eurodollar Rate Borrowings (except for changes in the rate of tax on the overall net income of the Bank imposed by the laws of the United States or any jurisdiction in which the Bank's principal office is located); or
(ii) shall impose, modify or deem applicable any reserve, special deposit, capital requirement or similar requirement (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding any such requirement to the extent included in calculating the Fixed Rate, the Floating Reserve-Adjusted Eurodollar Rate or the Average Daily Qualifying Balances, as the case may be) against assets of, deposits with or for the account of, or credit extended by, the Bank or shall impose on the Bank or on the United States market for certificates of deposit any other condition affecting, Fixed Rate Borrowings or Floating Eurodollar Rate Borrowings or its obligation to make Fixed Rate Borrowings or Floating Eurodollar Rate Borrowings; and the result of any of the foregoing is to increase the cost to the Bank of making or maintaining any Fixed Rate Borrowing or Floating Eurodollar Rate Borrowing, or to reduce the amount of any sum received or receivable by the Bank under this Agreement or under the Note, then, within 10 days after written demand by the Bank, delivered to the Company, the Company shall pay to the Bank such additional amount or -16- amounts as will compensate the Bank for such increased cost or reduction. A certificate of the Bank claiming compensation under this Section 6.02(b), setting forth the additional amount or amounts to be paid to it hereunder and stating in reasonable detail the basis for the charge and the method of computation...
Increased Cost. If any Change in Law: (a) shall subject such Buyer (or its LIBOR Lending Office) to any tax, duty or other charge with respect to this Agreement or any Transaction or change the basis of taxation of payments to the Buyer in respect thereof (except for changes in the rate of tax on the overall net income of Buyer or its LIBOR Lending Office imposed by the jurisdiction in which Buyer's principal executive office or LIBOR Lending Office is located); (b) shall impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by Buyer (or its LIBOR Lending Office), or shall impose on Buyer (or its LIBOR Lending Office) or the foreign exchange and interbank markets any other condition affecting this Agreement or the making or maintaining of Transactions hereunder; or (c) shall impose on the Buyer any other condition: and the result of any of the foregoing is to increase the cost to such Buyer, by an amount which the Buyer deems to be material, of entering, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, then in any such case, the Seller shall promptly pay the Agent (for distribution to such Buyer) such additional amount or amounts as calculated by the Buyer in good faith as will compensate the Buyer for such increased cost or reduced amount. A certificate of a Buyer, prepared in good faith and in reasonable detail by such Buyer and submitted to the Seller and the Agent, setting forth the basis for determining such additional amount or amounts necessary to compensate such Buyer shall be conclusive and binding for all purposes, absent manifest error.
Increased Cost. The Borrower agrees to pay to the Bank, the amount of any cost incurred by the Bank or any of its affiliates as a result of:
a) the introduction of, or any change in, or any change in the interpretation, administration or application of, any law or regulation; and/or
b) compliance with any law or regulation made effective after the date of the Sanction Letter; and/or
c) additional solicitors and lawyer’s fees or introduction of new or additional stamp duty, registration charges and other incidental expenses incurred or levied in connection with the Facility. The terms "law" and "regulation" in this clause shall include, without limitation, any law or regulation, circular or notification concerning capital adequacy, prudential limits, liquidity, reserve assets or tax.
Increased Cost. If any Change in Law subsequent to the Effective Date:
(a) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of a Buyer which is not otherwise included in the determination of the LIBOR Rate hereunder; or
(b) shall impose on a Buyer any other condition; and the result of any of the foregoing is to increase the cost to such Buyer, by an amount which such Buyer deems to be material, of entering, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, then, in any such case, the Seller shall promptly pay the Administrative Agent (for distribution to such Buyer) such additional amount or amounts as calculated by the Buyer in good faith as will compensate the Buyer for such increased cost or reduced amount receivable.