Lender Illegality Clause Samples
The Lender Illegality clause allows a lender to take specific actions if it becomes unlawful for them to fulfill their obligations under a loan agreement, such as making or maintaining a loan. In practice, this clause may permit the lender to suspend or terminate their lending commitments, or require the borrower to repay affected loans if changes in law or regulation make continued participation illegal. Its core function is to protect lenders from legal or regulatory risks that could arise after the agreement is signed, ensuring compliance with the law and providing a clear process for resolving such situations.
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Lender Illegality. Clause 12.7 Borrower or Guarantor Illegality Clause 12.7 Borrower or Guarantor Illegality
Lender Illegality. If it becomes unlawful in any jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Advance:
(a) that Lender shall promptly notify the Facility Agent upon becoming aware of that event;
(b) unless the repayment referred to in paragraph (c) below avoids such unlawfulness, upon the Facility Agent notifying ABB, the Commitment and/or the relevant Swingline Commitment of that Lender and/or its Revolving Facility Affiliate or its Swingline Affiliate will be immediately cancelled; and
(c) each Borrower shall, to the extent necessary to avoid such unlawfulness, repay that Lender’s and/or its Revolving Facility Affiliate’s or its Swingline Affiliate’s participation in the Advances made to it on the last day of the Interest Period for each Advance occurring after the Facility Agent has notified ABB or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than 5 Business Days after receipt of such notice or, if earlier, the last day of any applicable grace period permitted by law).
Lender Illegality. If it becomes unlawful in any jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund its participation in any Advance:
(a) that Lender shall promptly notify the Facility Agent upon becoming aware of that event;
(b) unless the repayment referred to in paragraph (c) below avoids such unlawfulness, upon the Facility Agent notifying ABB, the Commitment of that Lender will be immediately cancelled; and
(c) each Borrower shall, to the extent necessary to avoid such unlawfulness, repay that Lender’s participation in the Advances made to it on the last day of the Interest Period for each Advance occurring after the Facility Agent has notified ABB or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than 5 Business Days after receipt of such notice or, if earlier, the last day of any applicable grace period permitted by law).
Lender Illegality. If it becomes unlawful in any jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund its participation in any Advance:
(a) that Lender shall promptly notify the Facility Agent upon becoming aware of that event;
(b) unless the repayment referred to in paragraph (c) below avoids such unlawfulness, upon the Facility Agent notifying ABB, the Commitment of that Lender will be immediately cancelled; and
Lender Illegality. If the making of, or a change in the interpretation or application by any Governmental Agency of, any law or treaty makes it unlawful for the Lender to make, fund or maintain the accommodation required under this Agreement then the Lender immediately upon becoming so aware shall notify the Borrower of the unlawfulness with evidence certified by an Authorised Officer of the Lender of that unlawfulness and:
(a) the Lender shall consult in good faith with the Borrower with a view to finding an alternative, including, without limitation, changing its Lending Office to another jurisdiction provided that such alternative or change does not subject the Borrower or the Guarantor to any increase in costs, Taxes or expenses which are a direct or indirect consequence of that alternative or change, and if an alternative or change cannot be agreed upon:
(b) the Lender may by notice to the Borrower reduce the Commitment or require the Borrower to reduce the Principal Outstanding to the extent that it is unlawful;
(c) if required by the law or treaty, or if necessary to prevent or remedy a breach of the law or treaty, the Borrower will prepay the Principal Outstanding or the reduction therein referred to in paragraph (b) as the case may be, together with accrued interest thereon and all fees and other amounts due and payable as at that date under this Agreement and the amount (if any) payable under Clause 12.7; and
(d) that prepayment shall be made immediately after receipt of the notice referred to in paragraph (b), but if delay in prepayment is permitted by, or will not cause a breach of, the law or treaty, it shall be made on the latest permitted day and until such day, the Borrower shall remain entitled to give the Lender Selection Notices in relation to the Segment or Segments in question provided that in no case shall the Borrower select a Funding Period which expires after the latest day permitted by the relevant law or treaty for repayment.