Permanent Commitment Reductions Clause Samples
The Permanent Commitment Reductions clause defines the process by which a party's long-term contractual obligations, such as financial commitments or service levels, are reduced on a permanent basis. Typically, this clause outlines the conditions under which reductions can occur, such as upon mutual agreement, regulatory changes, or fulfillment of certain milestones, and specifies the extent and timing of the reduction. Its core practical function is to provide flexibility and adaptability in long-term agreements, allowing parties to adjust their commitments in response to changing circumstances or needs, thereby managing risk and ensuring the contract remains viable over time.
Permanent Commitment Reductions. Borrower may, at its option from time to time, permanently reduce, in whole or in part, the Revolving Commitments upon at least three (3) Business Days’ prior written notice to Agent, which notice shall specify the amount and effective date of the reduction and shall be irrevocable once given. Each reduction (i) in the case of a partial reduction, shall be in a minimum amount of $5,000,000 or an increment of $1,000,000 in excess thereof and (ii) shall not reduce the aggregate Revolving Commitments to an amount less than the sum of (A) the aggregate principal amount of Revolving Loans outstanding at such time plus (B) the outstanding L/C Obligations at such time (unless accompanied by a corresponding prepayment of such outstanding Revolving Loans).