Line Cap Clause Samples
A Line Cap clause defines the maximum amount of credit or financial exposure that a lender or service provider is willing to extend to a borrower or client. In practice, this clause sets a specific upper limit on the total outstanding balance or usage under a credit facility, line of credit, or similar arrangement. For example, a business credit line may have a cap of $500,000, meaning the borrower cannot draw more than this amount at any time. The core function of the Line Cap clause is to manage and limit financial risk by ensuring that the lender's exposure does not exceed a predetermined threshold.
Line Cap. If for any reason the Revolving Facility Usage at any time exceeds the Line Cap then in effect, the Borrowers shall, within three (3) Business Days, prepay Revolving Credit Loans and Swing Line Loans and/or Cash Collateralize Letter of Credit Obligations in an aggregate amount equal to such excess.
Line Cap. After giving effect to any Borrowing or the issuance, amendment, modification, renewal or extension of any Letter of Credit, (other than an amendment, modification, renewal or extension of a Letter of Credit without any increase in the state amount of such Letter of Credit), the Revolving Exposure of all Lenders at such time then outstanding shall not exceed the Line Cap. Each of the delivery of a Notice of Borrowing or an LC Request by the Borrower Agent and the acceptance by the applicable Borrower of the proceeds of such extension of credit shall constitute a representation and warranty by the Borrower Agent and each other Loan Party that on the date of such extension of credit (both immediately before and after giving effect to such extensions of credit) the conditions contained in this Article VI (other than, with respect to the Initial Revolving Loans and other extensions of credit made on the Effective Date, Sections 6.2(b) and (c)) have been satisfied on and as of such date (or waived in accordance with Section 11.1).
Line Cap. If on any date (x) the aggregate Revolving Outstandings exceed the Revolving Committed Amount or (y) the aggregate Revolving Outstandings (excluding Protective Advances) exceed the Line Cap, the Borrowers shall repay, and there shall become due and payable (together with accrued interest thereon), on the second Business Day immediately following such date an aggregate principal amount of Loans and (if applicable) Protective Advances in such amounts as are necessary to eliminate such shortfall. If the outstanding Loans and Protective Advances have been repaid in full, the Borrowers shall Cash Collateralize L/C Obligations to eliminate such shortfall. In determining the aggregate Revolving Outstandings for purposes of this Agreement, L/C Obligations shall be reduced to the extent that they are Cash Collateralized as contemplated by this clause (i). Each prepayment of Loans required pursuant to this clause (i) shall be applied ratably among outstanding Loans based on the respective amounts of principal then outstanding. Each Cash Collateralization of L/C Obligations required by this clause (i) shall be applied ratably among L/C Obligations based on the respective amounts thereof then outstanding.