Equalisation Payments Clause Samples
The Equalisation Payments clause ensures that financial contributions or distributions among parties are balanced to reflect fairness or agreed proportions. In practice, this clause may require one party to make a payment to another if initial contributions, profits, or losses are not evenly distributed, such as in investment funds or joint ventures where participants enter at different times or with varying amounts. Its core function is to prevent inequity among parties by adjusting payments so that all participants are treated fairly according to the agreed terms.
Equalisation Payments. If any Senior Creditor or Hedging Bank (a “Recovering Creditor”) makes a Recovery other than by reason of a payment from the Security Agent dealt with under Clause 11 (Proceeds of Enforcement), then:
(a) such Recovering Creditor will notify the Security Agent with details of such Recovery within three Business Days of receipt or recovery;
(b) the Security Agent will determine in good faith whether such Recovery is in excess of the amount (the amount of the excess being the “Recovery Excess”) which such Recovering Creditor would have received had such Recovery been effected by the Security Agent pursuant to the Combined Security Documents and applied as provided in Clause 11 (Proceeds of Enforcement), and shall notify such Recovering Creditor accordingly;
(c) such Recovering Creditor will pay an amount equal to the Recovery Excess (together with any interest accrued (at a rate determined by the Security Agent acting reasonably) on such amount from the date of receipt or recovery by it) to the Security Agent, retaining the balance in pro tanto satisfaction of the amount due to it;
(d) the Security Agent shall treat the Recovery Excess (plus such accrued interest) as if it were the proceeds of enforcement of the Combined Security Documents and shall deal with it in accordance with Clause 11 (Proceeds of Enforcement); and
(e) at the option of the Recovering Creditor (i) the liability of the relevant Obligor to such Recovering Creditor shall be increased (or treated as not having been reduced) by an amount equal to the Recovery Excess, or (ii) such Obligor shall fully indemnify such Recovering Creditor for the amount of the Recovery Excess.
Equalisation Payments. If, following acceleration of the Loans in accordance with Clause 24.21 (Acceleration), any amount owing by any Obligor Party under the Transaction Documents to a Secured Party (a Recovering Secured Party) is discharged by payment, set-off or any other manner other than through the Security Agent under this Agreement, then:
(a) the Recovering Secured Party shall, within three (3) Business Days supply details of the recovery to the Security Agent;
(b) the Security Agent shall calculate whether the recovery is in excess of the amount which the Recovering Secured Party would have received if the recovery had been received by the Security Agent under the Transaction Security Documents and applied in accordance with this Agreement; and
Equalisation Payments. If, following a Senior Enforcement Event, any amount owing by the Borrower under the Finance Documents to a Senior Creditor (a Recovering Creditor) is discharged by payment, set-off or any other manner other than through the Intercreditor Agent under Clause 10 (Proceeds of Enforcement of Security), then:
(a) the Recovering Creditor must, within three Business Days supply details of the recovery to the Intercreditor Agent;
(b) the Intercreditor Agent must calculate whether the recovery is in excess of the amount which the Recovering Creditor would have received if the recovery had been received by the Intercreditor Agent under 10 (Proceeds of Enforcement of Security), without taking account of any Tax which would be imposed on the Senior Agent in relation to the recovery or distribution; and
(c) the Recovering Creditor must pay to the Intercreditor Agent an amount equal to the excess (the redistribution).
Equalisation Payments. If, following acceleration of the Loans in accordance with Clause 24.21 (Acceleration), any amount owing by any Obligor Party under the Transaction Documents to a Secured Party (a Recovering Secured Party) is discharged by payment, set-off or any other manner other than through the Security Agent under this Agreement, then:
Equalisation Payments. If at any time after the delivery of a notice by the Agent under Clause 24.18 (Acceleration) any Relevant Bilateral Bank makes a Recovery in respect of any sum owed by the relevant Bilateral Borrower whether directly or by set-off or by any other means which, if such sum had been recovered by the Relevant Bilateral Bank from an Obligor, would have fallen to be dealt with under Clause 30.10 (Application of Proceeds by Security Agent) then:
(a) such Relevant Bilateral Bank will notify details of such Recovery to the Security Agent within 3 Business Days;
(b) the Security Agent will then determine in good faith the amount by which such Recovery exceeds the amount which such Relevant Bilateral Bank would have received had such Recovery been affected by the Security Agent from an Obligor pursuant to the Security Documents and applied as provided in Clause 29.10 (Application of Proceeds by Security Agent);
(c) such Relevant Bilateral Bank will pay an amount equal to the excess to the Security Agent, retaining the balance in pro tanto satisfaction of the amount due to it;
(d) the Security Agent shall treat the excess as if it were a Recovery from an Obligor pursuant to the relevant Security Documents and shall deal with it in accordance with Clause 29.10 (Application of proceeds by Security Agent) (taking into account the amount withheld by the Relevant Bilateral Bank in paragraph (c) above).