Overrun and Shortfall Undertaking Sample Clauses
The Overrun and Shortfall Undertaking clause establishes the parties' obligations in the event that actual costs or quantities exceed (overrun) or fall short of (shortfall) agreed estimates or targets. Typically, this clause outlines who is responsible for covering additional expenses if costs surpass the budget, or how savings are distributed if costs are less than anticipated. Its core function is to allocate financial risk and responsibility between the parties, ensuring clarity and fairness in managing deviations from planned outcomes.
POPULAR SAMPLE Copied 1 times
Overrun and Shortfall Undertaking. 2.2.1 The Sponsor hereby unconditionally and irrevocably undertakes to and agrees with the Facility Agent acting on behalf of the Lenders that until the occurrence of Final Completion it shall from time to time following the issuance of the Overrun Notice by the Borrower or the Facility Agent, make contributions or ensure contributions to the Borrower (as may be specified in such notice) for meeting any Cost Overrun by way of:
(i) subscription to Shares of the Borrower;
(ii) by way of subordinated debt from the Sponsor without creation of any Security Interest over the Project assets; or
(iii) loans arranged by Sponsor without creation of any Security Interest over the Project assets.