Increased Costs Taxes Capital Adequacy Clause Samples

The "Increased Costs; Taxes; Capital Adequacy" clause is designed to allocate responsibility for additional expenses or regulatory requirements that may arise during the term of an agreement, particularly in financial transactions. It typically allows a lender or service provider to pass on costs to the borrower or client if changes in law, regulation, or capital requirements increase the cost of providing a loan or service, or if new taxes are imposed. This clause ensures that the financial institution is protected from unforeseen regulatory or tax burdens, thereby maintaining the economic balance of the agreement and preventing losses due to external changes.