Dilution Reserve Clause Samples
A Dilution Reserve is a contractual provision that sets aside a portion of funds or assets to protect against reductions in the value of receivables due to factors like returns, credits, or billing errors. In practice, this reserve is calculated based on historical dilution rates and is withheld from the amount advanced to a seller in receivables financing arrangements. Its core function is to safeguard the buyer or lender from losses that may arise if the actual collectible amount of receivables is less than initially anticipated, thereby allocating risk and ensuring financial stability in the transaction.
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Dilution Reserve. The "Dilution Reserve" of any Undivided Interest on any day means an amount determined in accordance with the definition of Dilution Reserve in Appendix A.
Dilution Reserve. On any date of determination, computed as of the most recent Cut-Off Date, the product of (a) the sum of (i) the product of (A) the Stress Factor times (B) the Adjusted Dilution Ratio plus (ii) the Dilution Volatility Component times (b) the Dilution Horizon Ratio.
Dilution Reserve. =Dilution Reserve Percentage (from Schedule IV) Times Net Receivables Balance
Dilution Reserve. Dilution horizon: 1 month (**) - Stress factor (SF): 2,25 Dilution reserve (m) = [{SF * ED} + {DS - ED}*{DS/ED}] * DHR (m) Expected Dilution (ED) = average Dilution ratio within the last 12 months Dilution ratio (m) = Net Credit Notes (m) / Turnover (m-1) Net credit notes (m) = new Credit Notes issued during the relevant month, based on the reporting template filled monthly by each seller and the Refinanced Seller, excluding any Miscellaneous Accounting Credit Entries Dilution Spike (DS) = Maximum Dilution ratio within the last 12 months Dilution horizon ratio (DHR) = Turnover (m) / [Outstanding Amount of Sold Receivables as of the end of month m - Outstanding Amount of Defaulted Receivables as of the end of month m - Outstanding Amount of Net Miscellaneous Receivables as of the end of month m + Outstanding Amount of Refinanced Sold Receivables as of the end of month m - Outstanding Amount of Refinanced Defaulted Receivables as of the end of month m - Outstanding Amount of Refinanced Net Miscellaneous Receivables as of the end of month m]
Dilution Reserve. The product of (i) the sum of (A) the product of (x) 2 and (y) the Adjusted Dilution Ratio plus (B) the Dilution Volatility Component and (ii) the Dilution Horizon Ratio.
Dilution Reserve. For any Calculation Period, the product (expressed as a percentage) of:
Dilution Reserve. At the sole discretion of Lender, a reserve in an amount equal to the outstanding principal amount of the Term Loan”
Dilution Reserve. As of any date of determination, an amount equal to one (1) percentage point for each full percentage point by which Dilution is in excess of ten percent (10%). The Dilution Reserve shall be calculated as of the end of each month.
Dilution Reserve. A dilution reserve equal to the amount (if any) by which dilution for accounts receivable of the Borrower and its Subsidiaries exceeds 5%.
Dilution Reserve. The definition of "Dilution Reserve" in Exhibit I to the Agreement is amended and restated in its entirety to read as follows: