Judgment Shortfall Clause Samples
The Judgment Shortfall clause defines the obligations of a party when a court judgment or arbitration award is not fully satisfied by the responsible party. In practice, this clause typically requires the non-defaulting party to cover any remaining unpaid amounts and may provide mechanisms for recovering these shortfalls, such as seeking reimbursement or offsetting against other obligations. Its core function is to ensure that the party entitled to payment is made whole, even if the original judgment or award is not fully paid, thereby allocating the risk of non-payment and providing a clear remedy for shortfalls.
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Judgment Shortfall. (a) If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum owing hereunder in one Currency into another Currency, each party hereto agrees, to the fullest extent that it may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures in the relevant jurisdiction the first Currency could be purchased with such other Currency on the Business Day immediately preceding the day on which final judgment is given.
(b) The obligations of the Borrower in respect of any sum due to any party hereto or any holder of the obligations owing hereunder (the “Applicable Creditor”) shall, notwithstanding any judgment in a Currency (the “Judgment Currency”) other than the Currency in which such sum is stated to be due hereunder (the “Agreement Currency”), be discharged only to the extent that, on the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may in accordance with normal banking procedures in the relevant jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less than the sum due in accordance with this Agreement to the Applicable Creditor in the Agreement Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Applicable Creditor against such loss and if the amount of the Agreement Currency so purchased exceeds the sum due in accordance with this Agreement to the Applicable Creditor in the Agreement Currency, the Applicable Creditor agrees to remit such excess to the Borrower. The obligations of the Borrower and Applicable Creditor contained in this Section 9.19 shall survive the termination of this Agreement and the payment of all other amounts owing hereunder.
Judgment Shortfall. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder in Dollars into a Foreign Currency, the Borrower agrees that such sum will be converted to an amount equal to the Foreign Currency Equivalent on the business day preceding that on which final judgment is given. The obligation of the Borrower in respect of any sum due hereunder will, notwithstanding any judgment in a Foreign Currency, be discharged only to the extent that on the date the Borrower makes payment to the Lenders of any sum adjudged to be so due in such Foreign Currency, such Lender may, in accordance with normal banking procedures, purchase Dollars with such Foreign Currency; if the Dollars so purchased are less than the sum originally due to the Lenders in Dollars, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender against such loss, and if the Dollars so purchased exceed the sum originally due to any Lender in Dollars, such Lender agrees to remit to the Borrower such excess.