Second Amendment Incremental Term Loans Clause Samples
The 'Second Amendment Incremental Term Loans' clause establishes the terms under which additional term loans may be provided to a borrower under an existing credit agreement, as amended by a second amendment. This clause typically outlines the conditions for borrowing incremental amounts, such as lender consent requirements, maximum allowable increases, and the process for documenting the new loans. Its core function is to provide flexibility for the borrower to access additional financing under pre-agreed terms, while ensuring that all parties understand the limits and procedures for such increases, thereby reducing uncertainty and potential disputes.
Second Amendment Incremental Term Loans. Subject to the satisfaction or waiver of the conditions set forth in Section 3 hereof, on the Second Amendment Effective Date:
(a) The Second Amendment Incremental Term Loan Lender, by its execution of the Lender Addendum, agrees to make the Second Amendment Incremental Term Loans to the Borrower on the Second Amendment Effective Date in an aggregate principal amount set forth under the heading “Second Amendment Incremental Term Loan Commitment” opposite the Second Amendment Incremental Term Loan Lender’s name in the Lender Addendum (such commitment, the “Second Amendment Incremental Term Loan Commitment”).
(b) From and after the Second Amendment Effective Date, each party hereto agrees that, for all purposes of the Amended Credit Agreement and the other Loan Documents, (i) the Second Amendment Incremental Term Loan Lender shall be deemed to be a Term Lender and a Lender under the Amended Credit Agreement, and the Second Amendment Incremental Term Loan Lender shall be a party to the Amended Credit Agreement and shall have the rights and obligations of a Lender under the Amended Credit Agreement and (ii) the Second Amendment Incremental Term Loans, when funded, shall be made a part of the existing tranche of Initial Term Loans and shall be deemed to be an Initial Term Loan, a Term Loan and a Loan for all purposes under the Amended Credit Agreement and the other Loan Documents, including, but not limited to, the fact that the Second Amendment Incremental Term Loans shall bear interest as provided in the Amended Credit Agreement in respect of Initial Term Loans. All Second Amendment Incremental Term Loans incurred pursuant to this Amendment will be allocated ratably to each outstanding borrowing of Initial Term Loans that are Eurocurrency Rate Loans under the Credit Agreement for purposes of determining the initial interest rate thereon and Interest Period therefor.
(c) Section 1.01 of the Credit Agreement is hereby amended by:
(i) deleting the definition of “Applicable Amortization Percentage” in its entirety:
(ii) amending and restating the definition of “Initial Term Loans” as follows:
Second Amendment Incremental Term Loans. The Borrower shall repay to the Administrative Agent for the ratable account of the Second Amendment Incremental Lenders (i) on the last Business Day of each March, June, September and December, commencing with the last Business Day of the first fiscal quarter ending after the Amendment No. 2 Effective Date, an aggregate principal amount of Second Amendment Incremental Term Loans deemed made on the Amendment No. 2 Effective Date equal to 0.25% of the aggregate principal amount of all Second Amendment Incremental Term Loans outstanding on the Amendment No. 2 Effective Date (which payments shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.05) and (ii) on the Maturity Date for the Second Amendment Incremental Term Loans, the aggregate principal amount of all Second Amendment Incremental Term Loans outstanding on such date.