Optional Incremental Term Loans Clause Samples
The Optional Incremental Term Loans clause allows a borrower to request additional term loans from existing or new lenders under the same credit agreement, subject to certain conditions. Typically, this clause outlines the maximum amount of incremental loans permitted, the process for requesting them, and any requirements for lender consent or documentation. Its core function is to provide the borrower with flexibility to access extra financing as needed, without renegotiating the entire agreement, thereby streamlining the process of obtaining additional capital.
Optional Incremental Term Loans. (a) As an alternative to, or in addition to, Section 2.7 above, subject to the conditions set forth below, at any time prior to the Revolving Credit Maturity Date, the Borrower shall have the right upon not less than thirty (30) days’ (or such shorter period as may be agreed to by the Administrative Agent) prior written notice to the Administrative Agent pursuant to an Incremental Term Loan Notification, to request term loans in an aggregate principal amount as may be specified by the Borrower (such term loans, the “Incremental Term Loans”). Such Incremental Term Loan Notification shall specify the applicable Incremental Term Loan Effective Date, and on or prior to such date, the Borrower shall deliver a Notice of Borrowing with respect to such Incremental Term Loan.
(b) Each Incremental Term Loan shall be obtained from existing Lenders or from New Lenders that qualify as Eligible Assignees (each such New Lender, collectively with the existing Lenders providing Incremental Term Loans, the “Incremental Term Lenders”), in each case in accordance with this Section 2.8; provided that no Lender shall have any obligation to provide any portion of such Incremental Term Loans.
(c) The following terms and conditions shall apply to each Incremental Term Loan:
(i) such Incremental Term Loan made pursuant to this Section 2.8 shall constitute an Obligation of the Borrower and shall be guaranteed and secured with the other Extensions of Credit on a pari passu basis;
(ii) the Administrative Agent shall have received from the Borrower, updated financial projections and an Officer’s Compliance Certificate, in each case in form and substance reasonably satisfactory to the Administrative Agent, demonstrating that, as of the Incremental Term Loan Effective Date and after giving effect to any such Incremental Term Loan (and, if applicable, any simultaneous increase in the Revolving Credit Commitment pursuant to Section 2.7), the Borrower will be in pro forma compliance with the financial covenants set forth in Article X;
(iii) no Default or Event of Default shall have occurred and be continuing as of the applicable Incremental Term Loan Effective Date and after giving effect to the making of any such Incremental Term Loans (and, if applicable, any simultaneous increase in the Revolving Credit Commitment pursuant to Section 2.7);
(iv) the representations and warranties made by each Credit Party in this Agreement and in the other Loan Documents shall be true and correct on and a...
Optional Incremental Term Loans. 6267 SECTION 2.10 Additional Borrowers. 6569 ARTICLE III [INTENTIONALLY OMITTED] 6772 ARTICLE IV GENERAL LOAN PROVISIONS 6772 SECTION 4.1 Interest and Default Rate 6773 SECTION 4.2 Computation of Interest and Fees 6874