Fixed Rate Breakage Fee Clause Samples
A Fixed Rate Breakage Fee clause establishes a penalty or fee that must be paid if a party terminates or alters a fixed-rate financial agreement before its scheduled end date. Typically, this fee compensates the non-breaching party for losses incurred due to changes in interest rates or the early repayment of a loan, and is calculated based on the difference between the fixed rate and current market rates at the time of termination. The core function of this clause is to protect the lender or counterparty from financial loss and discourage premature termination of fixed-rate contracts.
Fixed Rate Breakage Fee. Upon any prepayment of all or any portion of the Term B Notes (regardless of the source of such prepayment and whether voluntary, by acceleration or otherwise), Obligors shall pay the Noteholders on a pro rata basis an amount (the "Fixed Rate Breakage Fee") equal to the present value, for each successive month in the remaining term of such prepaid Term B Notes, of (1) the yield as reported in the Federal Reserve statistical release H.15 (519) under the caption "U.S. Government Securities/Treasury Constant Maturities" (hereinafter "H.15 (519)") for a Treasury Note with a term equal to that remaining on such Note (which will be obtained by interpolating between the yield reported on the H.15 (519) for specific whole years) on the Closing Date less (2) the yield as reported on the date of such prepayment in the H.15 (519) for a Treasury Note with a term equal to that remaining on such Term B Notes (which will be obtained by interpolating between the yield reported on the H.15 (519) for specific whole years) on the date of such prepayment, multiplied by (a) the outstanding principal balance of such Note at the time of prepayment for purposes of calculating such amount for the month during which such prepayment occurs and by (b) the principal balance that would have been outstanding at the beginning of each successive month in the remaining term of such Note had the amortization schedule set forth for such Note been adhered to; provided, that the rate determined in (2) above will be used as the discount rate in computing such present value. The Fixed Rate Breakage Fee represents the reinvestment loss of the Holders of the Term B Notes resulting from making a fixed rate loan.
Fixed Rate Breakage Fee. If Borrower prepays the principal balance of the Loans on or prior to the second anniversary of the Closing Date (regardless of the source of such prepayment and whether voluntary, by acceleration or otherwise and including prepayments as a result of any Annual Surplus Cash Flow Payment or prepayments from the proceeds of any insurance as set forth in Section 2.2), Borrower shall pay Agent, for the benefit of all Lenders entitled to a portion of such prepayment, an amount (the "Fixed Rate Breakage Fee") equal to (1) the aggregate amount of interest (the Current Interest plus the Deferred Interest) which would have otherwise been payable on the amount of the principal prepayment from the date of prepayment until August 28, 2000, minus (2) the aggregate amount of interest Lenders would earn if the prepaid principal amount were reinvested for the period from the date of prepayment until August 28, 2000 at the Treasury Rate. The term "Treasury Rate" shall mean a rate per annum (computed on the basis of actual days elapsed over a year of 360 days) equal to the rate determined by Agent (on the date three (3) Business Days prior to the date of prepayment), to be the yield expressed as a rate listed in The Wall Street Journal for United States Treasury securities having a term of not greater than twenty-four (24) months. The Fixed Rate Breakage Fee represents Lenders' reinvestment loss resulting from making a fixed rate loan. No amount will be payable pursuant to this subsection 1.3(B) if Borrower prepays the Obligations in full after the second anniversary of the Closing Date.
Fixed Rate Breakage Fee. Upon any prepayment of the Term Loan (regardless of the source of such prepayment and whether voluntary or otherwise), in addition to any other prepayment fees due from Borrowers, Borrowers shall pay an amount (the "Fixed Rate Breakage
Fixed Rate Breakage Fee. Upon any prepayment of a Loan (regardless of the source of such prepayment and whether voluntary, by acceleration or otherwise), in addition to any other prepayment fees due from Borrower, Borrower shall pay Lender, an amount (the "Fixed Rate Breakage Fee" which for purposes hereof shall not be less than zero) equal to the present value, for each remaining year of the term of such prepaid Loan, of (1) the yield as reported on the Closing Date, in the Federal Reserve statistical release H.15 (519) under the caption "U.S. Government Securities/Treasury Constant Maturities" (hereinafter "H.15 (519)") for a Treasury Note with a term equal to the Original Term on such Loan on the Closing Date (which will be obtained by interpolating between the yield reported on the H.15 (519) for specific whole years) on the date the Loan was funded less (2) the yield as reported on the date of such prepayment in the H.15 (519) for a Treasury Note with a term equal to that remaining on such Loan (which will be obtained by interpolating between the yield reported on the H.15 (519) for specific whole years) on the date of such prepayment, multiplied by (a) the outstanding principal balance of such Loan at the time of prepayment for purposes of calculating such amount for the month during which such prepayment occurs and by (b) the principal balance that would have been outstanding at the beginning of each successive Loan Year in the remaining term of such Loan had the amortization schedule set forth for such Loan been adhered to; provided, that the rate determined in (2) above will be used as the discount rate