Debt Allocation Mechanism Sample Clauses
The Debt Allocation Mechanism clause defines how existing or future debts are to be distributed among parties involved in an agreement. Typically, this clause outlines the method for assigning responsibility for repayment, such as dividing debt based on ownership percentages or specific contractual roles. For example, in a joint venture, it may specify that each party is liable for a proportionate share of any liabilities incurred. The core function of this clause is to ensure clarity and fairness in the handling of debt obligations, thereby preventing disputes and misunderstandings regarding financial responsibilities.
Debt Allocation Mechanism. (a) Notwithstanding any provision of any Loan Document to the contrary, on the DAM Exchange Date, each Lender holding U.S. Term Loans and each Lender holding Canadian Term Loans shall automatically and without further act (and without regard to the provisions of Section 9.04), unless, on or prior to the DAM Exchange Date, one or more Lenders having or holding Term Loans representing both (i) more than 50.0% of the aggregate principal amount of U.S. Term Loans of all Lenders, and (ii) more than 50.0% of the aggregate principal amount of Canadian Term Loans of all Lenders, shall have otherwise directed the Administrative Agent, assign to other Lenders a portion of its interests in the U.S. Term Loans and the Canadian Term Loans and/or purchase from other Lenders a portion of their interests in the U.S. Term Loans and Canadian Term Loans, such that in lieu of the interests such Lender has acquired as of such date in the U.S. Term Loans and the Canadian Term Loans (whether as a Lender of record or by participation), including such Lender’s interests in (x) the Obligations of each U.S. Loan Party and (y) the Canadian Obligations of each Canadian Loan Party in respect of Term Loans, such Lender shall hold an interest in the U.S. Term Loans (including the Obligations of each U.S. Loan Party in respect of the U.S. Term Loans) equal to such Lender’s DAM Percentage of all U.S. Term Loans outstanding as at such date of determination, whether or not such Lender previously had an interest in U.S. Term Loans, and such Lender shall hold an interest in the Canadian Term Loans (including the Canadian Obligations of each Canadian Loan Party in respect of the Canadian Term Loans) equal to such Lender’s DAM Percentage of all Canadian Term Loans outstanding as at such date of determination, whether or not such Lender previously had an interest in Canadian Term Loans. A Lender may elect upon the occurrence of a DAM Exchange Date that the interests in the Canadian Term Loans acquired by such Lender shall be acquired by participation and not by assignment. In such case, the Administrative Agent shall determine the Dollar Equivalent of the Loans outstanding in Canadian Dollars, and such participation shall be structured as a participation in Dollars and be purchased by such Lender in Dollars, in each case, based on the Exchange Rate as in effect on the date immediately preceding the DAM Exchange Date, such that any amounts received by the Lender of record with respect to such Loan...
Debt Allocation Mechanism