Additional Capital Contributions; Advances from Nevada Gold. (a) In the event the Company requires financing to fund Cost Budget Overruns for the Tioga Downs Complex and/or the Xxxxxx Xxxxx Complex or operating deficits of the Company, then, the Board may elect to require (i) additional Capital Contributions by the Members or (ii) in the case of Cost Budget Overruns, advances from Nevada Gold in accordance with Section 7.2(b), but only on the terms and conditions set forth in Section 7.2(b). (b) If all guaranty, contribution, reimbursement and indemnity obligations of Nevada Gold have been released, and the First Lien Lenders have not required Nevada Gold to provide the Nevada Gold Guarantee, or if the First Lien Lenders have required Nevada Gold to provide the Nevada Gold Guarantee but permit all or a portion of it to be used to fund Cost Budget Overruns (but not operating deficits) for the Tioga Downs Complex and/or the Xxxxxx Xxxxx Complex, then Nevada Gold shall provide financing to the Company up to the Permitted Amount to fund Cost Budget Overruns for the Tioga Downs Complex and/or the Xxxxxx Xxxxx Complex. Any and all such advances of the Permitted Amount shall be evidenced by Subordinated Notes and shall be on the same terms as described in Section 5.1. Notwithstanding the foregoing, for purposes of this Section 7.2(b), Cost Budget Overruns shall not include any design changes or changes in the construction work including through the use of change orders, which are not required by law. (c) If (i) there shall exist any operating deficits or Cost Budget Overruns (but, in the case of Cost Budget Overruns, only if Nevada Gold has already advanced the Permitted Amount to the Company pursuant to Section 7.2(b)) and (ii) the Board has elected to require the Members to make additional Capital Contributions in accordance with Section 4.1(d)(iv), the Company shall give written notice (a “Contribution Notice”) of such Cost Budget Overruns or operating deficits to all of the Members, which Contribution Notice shall summarize, with reasonable particularity, the specific Cost Budget Overruns or operating deficits, as the case may be, the Company’s actual and projected cash obligations, cash on hand, the projected sources and amounts of future cash flow, the number of Units to be issued and sold in connection with such required additional Capital Contributions and the Price Per Unit for each such Unit to be issued, and which Contribution Notice shall also specify a contribution date (“Contribution Date”) (which shall not be less than thirty (30) days following the date such Contribution Notice is delivered to the Members) upon which each Member shall have the obligation to contribute to the capital of the Company by purchasing Units at the Price Per Unit specified in the Contribution Notice, in cash, such Member’s Percentage (as of the Contribution Date) of such Cost Budget Overruns or operating deficits (“Cash Deficit Contribution”). If any Member (the “Non-Contributing Member”) fails to contribute all or any portion of such Member’s portion of the Cash Deficit Contribution (such amount that is not so contributed by the Non-Contributing Member being the “Delinquent Contribution”), then each Other Member shall be entitled to contribute all or any portion of the Delinquent Contribution on a pro rata basis (based on the Percentage of such Other Member to the aggregate Percentage of all Other Members that elect to contribute any portion of the Delinquent Contribution). Each Other Member may elect to contribute all or any portion of its pro rata share of the Delinquent Contribution by delivering a Notice to the Company within ten (10) days after the Contribution Date. If any Other Member does not elect to contribute its entire pro rata share of the Delinquent Contribution by the expiration of such 10-day period, any Other Member that has elected to contribute its entire pro rata share of the Delinquent Contribution may elect to contribute any part of the remaining portion of the Delinquent Contribution on a pro rata basis (based on the proportionate Percentages of such Other Members) until either the Other Members elect to contribute such remaining portion or no Other Member elects to contribute such remaining portion (which elections described in this sentence shall in any event be concluded within five (5) days following the expiration of such 10-day period). The Members agree that if either (but not both) Southern Tier or TrackPower is the Non-Contributing Member, then the other shall have the first right but not the obligation to contribute 100% of the portion of the Cash Deficit Contribution of such Non-Contributing Member, such election to be exercised within five (5) days following the Contribution Date. Notwithstanding the foregoing sentence, Southern Tier, Oneida and Nevada Gold agree that the right to contribute any portion of a Delinquent Contribution of TrackPower (as a result of TrackPower being a Non-Contributing Member) that would dilute TrackPower below 50% of its initial Percentage in the Company will be the joint right of Southern Tier, Oneida and Nevada Gold (in the proportion of their respective Percentages unless otherwise agreed). With respect to the amount of the Delinquent Contribution contributed by a Contributing Member, such Contributing Member shall be issued a number of Units equal to the product of (i) 1.5 times (ii) the quotient obtained by dividing (x) the amount of the Delinquent Contribution contributed by such Contributing Member by (y) the Price Per Unit established by the Board and specified in the Contribution Notice. The aggregate number of Units issued to all Contributing Members under this Section 7.2(c) shall be referred to as the “Cash Deficit Additional Contribution Units”. If Other Members contribute all or any portion of the Delinquent Contribution, the number of Units held by the Non-Contributing Member shall be reduced by the total number of Cash Deficit Additional Contribution Units issued to the Contributing Members; provided, that if there shall be more than one Non-Contributing Member in respect of a particular Cash Deficit Contribution and Other Members contribute all or any portion of the Delinquent Contributions of such Non-Contributing Members, then the number of Units held by each Non-Contributing Member shall be reduced by a number of Units equal to the product of (A) the total number of Cash Deficit Additional Contribution Units issued to Contributing Members, times (B) a fraction, (x) the numerator of which is the amount of the Delinquent Contribution of such Non-Contributing Member and (y) the denominator of which is the aggregate amount of all Delinquent Contributions of all Non-Contributing Members. (d) If, as a result of the provisions of Section 7.2(c), a Member’s (the “Diluted Member”) Percentage falls to or below 50% of its initial Percentage set forth in Exhibit 3.1, then the other Members (in the proportion of their respective Percentages unless otherwise agreed) shall have the right by Notice (“Purchase Notice”) to purchase all of the remaining Units of the Diluted Member, at a purchase price equal to 85% of the Fair Market Value of the remaining Units of the Diluted Member; provided, that such Purchase Notice shall not be delivered until November 7, 2007 or thereafter. Any transferee of a Diluted Member’s Units after such Member’s Percentage falls to or below 50% of its initial Percentage shall be subject to the purchase option unless otherwise agreed by the other Members. The Purchase Notice may designate any date, beginning ninety (90) days before the date of such Notice, and ending on the date of such Notice, as to the effective date on which Fair Market Value of the Units being purchased shall be determined. Upon giving of the Purchase Notice, the Fair Market Value of the Units shall be determined pursuant to Article 6. For purposes of clarity, if a Member is diluted to 50% or below its initial Percentage set forth in Exhibit 3.1 in March 2006, then the other Members may not deliver the Purchase Notice until November 7, 2007 or after and the Fair Market Value of the remaining Units being purchased would be determined as of a date no earlier than 90 days prior to the exercise of the purchase option (on or after November 7, 2007). The purchase price shall be payable 50% in cash due sixty (60) days from the date upon which Fair Market Value is determined pursuant to Article 6 (the “Valuation Date”), with the balance payable in 4 equal annual payments, plus interest, with the first installment due one year following the Valuation Date. The outstanding balance shall accrue interest at the interbank borrowing rate that banks charge each other for overnight loans (the “fed funds rate”) and shall be evidenced by a promissory note which shall contain an acknowledgment by the Diluted Member that the obligations under such promissory note are not obligations of the Company or the other Members except for the Member(s) that have elected the purchase option in this Section 7.2(d). (e) If, as a result of this Section 7.2 or any other provisions of this Agreement, a Member’s Percentage increases to 60% or greater, then the Board shall be reconstituted and increased if necessary and such Member shall have the right to elect a majority of the directors on the Board, and each of the other Members having a Percentage of at least 10% shall have the right to elect one Director. (f) Each of the Members acknowledges, agrees and represents the following: (i) the provisions of this Section 7.2 are not intended to confer upon any lender or other financing source of the Company any rights or remedies against the Members or the Company and no such lender or financing source shall be deemed to be a third party beneficiary of this Section 7.2; and (ii) such Member has not represented to any lender or other financing source of the Company, and such Member covenants and agrees that it shall not at anytime represent to any lender or other financing source of the Company, that such lender or financing source shall be entitled to rely on the provisions of this Section 7.2.
Appears in 2 contracts
Samples: Operating Agreement (Trackpower Inc), Operating Agreement (Nevada Gold & Casinos Inc)
Additional Capital Contributions; Advances from Nevada Gold. (a) In the event the Company requires financing to fund Cost Budget Overruns overruns for the Tioga Downs Complex and/or the Xxxxxx Xxxxx Complex or operating deficits of the CompanyCompany after all initial Capital Contributions of the Members as set forth in Section 7.1 above have been made, then, the Board may elect to require (i) additional Capital Contributions by the Members or (ii) in the case of Cost Budget Overrunsoverruns, advances from Nevada Gold in accordance with Section 7.2(b)Gold, but only on the terms and conditions set forth in Section 7.2(b).
(b) If all guaranty, contribution, reimbursement and indemnity obligations of Nevada Gold have been released, and the First Lien Lenders have Lender has not required Nevada Gold to provide a guaranty of $5,000,000 ($2,500,000 in the Nevada Gold Guaranteeevent the Xxxxxx Xxxxx Complex is not acquired), or if the First Lien Lenders have Lender has required Nevada Gold to provide the Nevada Gold Guarantee such guaranty but permit permits all or a portion of it to be used to fund Cost Budget Overruns (but not operating deficits) overruns for the Tioga Downs Complex and/or the Xxxxxx Xxxxx Complex, then Nevada Gold shall provide financing to the Company Company, up to the Permitted Amount amount of $5,000,000 (or $2,500,000 in the event the Xxxxxx Xxxxx Complex is not acquired) to fund Cost Budget Overruns overruns for the Tioga Downs Complex and/or the Xxxxxx Xxxxx Complex. Any and all such advances shall be treated as unsecured loans by Nevada Gold to the Company and evidenced by subordinated notes bearing interest at the rate of one percent (1%) per annum above the interest rate of the Permitted Amount shall be evidenced by Subordinated Notes Senior Note Financing and shall be on maturing thirty (30) days following the same terms as described in Section 5.1. Notwithstanding maturity date of the foregoing, for purposes of this Section 7.2(b), Cost Budget Overruns shall not include any design changes or changes in the construction work including through the use of change orders, which are not required by lawSenior Note Financing.
(c) If (i) there shall exist any operating deficits or Cost Budget Overruns (but, in the case of Cost Budget Overruns, only if financing from Nevada Gold has already advanced the Permitted Amount to the Company pursuant to is not required under Section 7.2(b)) , and (ii) the Board has elected elects to require the Members to make additional Capital Contributions in accordance with Section 4.1(d)(iv)by the Members, the Company Board shall give written notice (a “Contribution Notice”) of such Cost Budget Overruns overruns or operating deficits to all of the Members, which Contribution Notice notice shall summarize, with reasonable particularity, the specific Cost Budget Overruns overruns or operating deficits, as the case may be, the Company’s 's actual and projected cash obligations, cash on hand, and the projected sources and amounts of future cash flow, the number of Units to be issued and sold in connection with such required additional Capital Contributions and the Price Per Unit for each such Unit to be issued, flow and which Contribution Notice notice shall also specify a contribution date (“"Contribution Date”") (( which shall not be less than thirty (30) days following the effective date of such Contribution Notice is delivered to the Membersnotice) upon which each Member shall have the obligation to contribute to the capital of the Company by purchasing Units at the Price Per Unit specified in the Contribution NoticeCompany, in cash, such Member’s 's Percentage (as of the Contribution Date) of such Cost Budget Overruns or operating deficits (“"Cash Deficit Contribution”"). If any Member (the “"Non-Contributing Member”") fails to contribute all or any portion of the Cash Deficit Contribution or any other amount required to be made by such Member’s portion Member pursuant to Section 7.1 ("Delinquent Contribution"), and provided that one or more of the other Members (collectively, the "Contributing Members") have contributed (in the proportion of their ownership Percentages unless otherwise agreed) to the capital of the Company all of the Cash Deficit Contribution or any other amount required to be made by the Non-Contributing Member pursuant to Section 7.1 within thirty (30) days following the Contribution Date, then in such amount that is event there shall be a dilution penalty of 150% of every dollar not so contributed by the Non-Contributing Member being the “Delinquent Contribution”), then each Other Member shall be entitled to contribute all or any portion of the Delinquent Contribution on a pro rata basis (based on the Percentage of such Other Member to the aggregate Percentage of all Other Members that elect to contribute any portion of the Delinquent Contribution). Each Other Member may elect to contribute all or any portion of its pro rata share of the Delinquent Contribution by delivering a Notice to the Company within ten (10) days after the Contribution Date. If any Other Member does not elect to contribute its entire pro rata share of the Delinquent Contribution by the expiration of such 10-day period, any Other Member that has elected to contribute its entire pro rata share of the Delinquent Contribution may elect to contribute any part of the remaining portion of the Delinquent Contribution on a pro rata basis (based on the proportionate Percentages of such Other Members) until either the Other Members elect to contribute such remaining portion or no Other Member elects to contribute such remaining portion (which elections described in this sentence shall in any event be concluded within five (5) days following the expiration of such 10-day period)Member. The Members agree that if either (but not both) Southern Tier or TrackPower is the Non-Contributing Member, then the other shall have the first right but not the obligation to contribute 100% of the portion of the Cash Deficit Contribution or other amount required by Section 7.1 of such Non-Contributing Member, such election to be exercised within five (5) days following the Contribution Date. Notwithstanding The dilution penalty shall be determined as follows: the foregoing sentence, Southern Tier, Oneida and Nevada Gold agree that Percentage of the right to contribute any portion of a Delinquent Contribution of TrackPower (as a result of TrackPower being a Non-Contributing Member) that would dilute TrackPower below 50% of its initial Percentage in the Company Members will be the joint right of Southern Tier, Oneida and Nevada Gold (in the proportion of their respective Percentages unless otherwise agreed). With respect to the increased by an amount of the Delinquent Contribution contributed which is arrived at by a Contributing Member, such Contributing Member shall be issued a number of Units equal to the product of (i) 1.5 multiplying 150% times (ii) the quotient obtained by dividing (x) the amount of the Delinquent Contribution contributed by such Contributing Member by (y) the Price Per Unit established by the Board and specified in the Contribution Notice. The aggregate number of Units issued to all Contributing Members under this Section 7.2(c) shall be referred to as the “Cash Deficit Additional Contribution Units”. If Other Members contribute all or any portion of the Delinquent Contribution, the number of Units held by the Non-Contributing Member shall be reduced by the total number of Cash Deficit Additional Contribution Units issued to the Contributing Members; provided, that if there shall be more than one Non-Contributing Member in respect of a particular Cash Deficit Contribution and Other Members contribute all or any portion of the Delinquent Contributions of such Non-Contributing Members, then the number of Units held by each Non-Contributing Member shall be reduced by a number of Units equal to the product of (A) the total number of Cash Deficit Additional Contribution Units issued to Contributing Members, times (B) a fraction, (x) the numerator of which is the amount contributed by the Contributing Members on behalf of the Delinquent Contribution of such Non-Contributing Member Member, and (y) the denominator of which is the aggregate amount of all Delinquent Capital Contributions of all of the Members after the making of the additional Capital Contribution by the Contributing Members. The Percentage of the Non-Contributing MembersMember will be decreased by the same amount. For example, if (i) $1,000,000 in Cash Deficit Contributions are required, (ii) Nevada Gold contributes 100% of such amount, and (iii) the aggregate Capital Contributions of all of the Members after the making of the $1,000,000 Cash Deficit Contribution is $19,000,000, then Nevada Gold's Percentage shall be increased by 3.95%, calculated as follows: 150% X $500,000/$19,000,000 = 3.95% Trackpower's Percentage shall be decreased by 1.975% and Southern Tier's Percentage shall be decreased by 1.975%. For purposes of this Section, the aggregate amount of Capital Contributions made by the Members shall not include the amount of $5,000,000 associated with the Tioga Downs Contributed Amount (representing the incremental increase in value), which was credited one-half to TrackPower and one-half to Southern Tier.
(d) If, as a result of the provisions of Section 7.2(c)dilution penalty, a Member’s 's (the “"Diluted Member”") ownership Percentage falls to or below 50% of its initial Percentage set forth in Exhibit Section 3.1, then the other Members (in the proportion of their respective Percentages unless otherwise agreed) shall have the right by Notice notice (“"Purchase Notice”") to purchase all of the remaining Units Membership Interests of the Diluted Member, Member at a purchase price equal to 85% of the Fair Market Value of the remaining Units Membership Interests of the Diluted Member; provided, that such Purchase Notice shall not be delivered until November 7, 2007 or thereafter. Any transferee of a Diluted Member’s Units after such Member’s Percentage falls to or below 50% of its initial Percentage shall be subject to the purchase option unless otherwise agreed by the other Members. The Purchase Notice may designate any date, beginning ninety (90) days before the date of such Notice, and ending on the date of such Notice, as to the effective date on which Fair Market Value of the Units Membership Interests being purchased shall be determined. Upon giving of the Purchase Notice, the Fair Market Value of the Units Membership Interests shall be determined pursuant to Article 6. For purposes of clarity, if a Member is diluted to 50% or below its initial Percentage set forth in Exhibit 3.1 in March 2006, then the other Members may not deliver the Purchase Notice until November 7, 2007 or after and the Fair Market Value of the remaining Units being purchased would be determined as of a date no earlier than 90 days prior to the exercise of the purchase option (on or after November 7, 2007). The purchase price shall be payable 50% in cash due sixty (60) days from the date upon which Fair Market Value is determined pursuant to Article 6 (the “"Valuation Date”"), with the balance payable in 4 equal annual payments, plus interest, with the first installment due one year following the Valuation Date. The outstanding balance shall accrue interest at the interbank borrowing rate that banks charge each other for overnight loans (the “"fed funds rate”) and shall be evidenced by a promissory note which shall contain an acknowledgment by the Diluted Member that the obligations under such promissory note are not obligations of the Company or the other Members except for the Member(s) that have elected the purchase option in this Section 7.2(d").
(e) If, as a result of this Section 7.2 or any other provisions of this Agreement, a Member’s 's Percentage increases to 60% or greater, then the Board of Directors shall be reconstituted and increased if necessary to five members and such Member shall have the right to elect a majority of the three directors on to the Board, and each of the other two Members having a Percentage of at least 10% shall have the right to elect one Directordirector (or if there is only one other Member, the Member holding a 60% or greater Percentage shall have the right to elect three directors to the Board and the other Member shall have the right to elect two directors).
(f) Each of the Members acknowledges, agrees and represents the following:
(i) the provisions of this Section 7.2 are not intended to confer upon any lender or other financing source of the Company any rights or remedies against the Members or the Company and no such lender or financing source shall be deemed to be a third party beneficiary of this Section 7.2; and
(ii) such Member has not represented to any lender or other financing source of the Company, and such Member covenants and agrees that it shall not at anytime represent to any lender or other financing source of the Company, that such lender or financing source shall be entitled to rely on the provisions of this Section 7.2.
Appears in 1 contract
Samples: Operating Agreement (Trackpower Inc)
Additional Capital Contributions; Advances from Nevada Gold. (a) In the event the Company requires financing to fund Cost Budget Overruns overruns for the Tioga Downs Complex and/or the Xxxxxx Xxxxx Complex or operating deficits of the CompanyCompany after all initial Capital Contributions of the Members as set forth in Section 7.1 above have been made, then, the Board may elect to require (i) additional Capital Contributions by the Members or (ii) in the case of Cost Budget Overrunsoverruns, advances from Nevada Gold in accordance with Section 7.2(b)Gold, but only on the terms and conditions set forth in Section 7.2(b).
(b) If all guaranty, contribution, reimbursement and indemnity obligations of Nevada Gold have been released, and the First Lien Lenders have Lender has not required Nevada Gold to provide a guaranty of $5,000,000 ($2,500,000 in the Nevada Gold Guaranteeevent the Xxxxxx Xxxxx Complex is not acquired), or if the First Lien Lenders have Lender has required Nevada Gold to provide the Nevada Gold Guarantee such guaranty but permit permits all or a portion of it to be used to fund Cost Budget Overruns (but not operating deficits) overruns for the Tioga Downs Complex and/or the Xxxxxx Xxxxx Complex, then Nevada Gold shall provide financing to the Company Company, up to the Permitted Amount amount of $5,000,000 (or $2,500,000 in the event the Xxxxxx Xxxxx Complex is not acquired) to fund Cost Budget Overruns overruns for the Tioga Downs Complex and/or the Xxxxxx Xxxxx Complex. Any and all such advances shall be treated as unsecured loans by Nevada Gold to the Company and evidenced by subordinated notes bearing interest at the rate of one percent (1%) per annum above the interest rate of the Permitted Amount shall be evidenced by Subordinated Notes Senior Note Financing and shall be on maturing thirty (30) days following the same terms as described in Section 5.1. Notwithstanding maturity date of the foregoing, for purposes of this Section 7.2(b), Cost Budget Overruns shall not include any design changes or changes in the construction work including through the use of change orders, which are not required by lawSenior Note Financing.
(c) If (i) there shall exist any operating deficits or Cost Budget Overruns (but, in the case of Cost Budget Overruns, only if financing from Nevada Gold has already advanced the Permitted Amount to the Company pursuant to is not required under Section 7.2(b)) , and (ii) the Board has elected elects to require the Members to make additional Capital Contributions in accordance with Section 4.1(d)(iv)by the Members, the Company Board shall give written notice (a “Contribution Notice”) of such Cost Budget Overruns overruns or operating deficits to all of the Members, which Contribution Notice notice shall summarize, with reasonable particularity, the specific Cost Budget Overruns overruns or operating deficits, as the case may be, the Company’s 's actual and projected cash obligations, cash on hand, and the projected sources and amounts of future cash flow, the number of Units to be issued and sold in connection with such required additional Capital Contributions and the Price Per Unit for each such Unit to be issued, flow and which Contribution Notice notice shall also specify a contribution date (“"Contribution Date”") (( which shall not be less than thirty (30) days following the effective date of such Contribution Notice is delivered to the Membersnotice) upon which each Member shall have the obligation to contribute to the capital of the Company by purchasing Units at the Price Per Unit specified in the Contribution NoticeCompany, in cash, such Member’s 's Percentage (as of the Contribution Date) of such Cost Budget Overruns or operating deficits (“"Cash Deficit Contribution”"). If any Member (the “"Non-Contributing Member”") fails to contribute all or any portion of the Cash Deficit Contribution or any other amount required to be made by such Member’s portion Member pursuant to Section 7.1 ("Delinquent Contribution"), and provided that one or more of the other Members (collectively, the "Contributing Members") have contributed (in the proportion of their ownership Percentages unless otherwise agreed) to the capital of the Company all of the Cash Deficit Contribution or any other amount required to be made by the Non-Contributing Member pursuant to Section 7.1 within thirty (30) days following the Contribution Date, then in such amount that is event there shall be a dilution penalty of 150% of every dollar not so contributed by the Non-Contributing Member being the “Delinquent Contribution”), then each Other Member shall be entitled to contribute all or any portion of the Delinquent Contribution on a pro rata basis (based on the Percentage of such Other Member to the aggregate Percentage of all Other Members that elect to contribute any portion of the Delinquent Contribution). Each Other Member may elect to contribute all or any portion of its pro rata share of the Delinquent Contribution by delivering a Notice to the Company within ten (10) days after the Contribution Date. If any Other Member does not elect to contribute its entire pro rata share of the Delinquent Contribution by the expiration of such 10-day period, any Other Member that has elected to contribute its entire pro rata share of the Delinquent Contribution may elect to contribute any part of the remaining portion of the Delinquent Contribution on a pro rata basis (based on the proportionate Percentages of such Other Members) until either the Other Members elect to contribute such remaining portion or no Other Member elects to contribute such remaining portion (which elections described in this sentence shall in any event be concluded within five (5) days following the expiration of such 10-day period)Member. The Members agree that if either (but not both) Southern Tier or TrackPower is the Non-Contributing Member, then the other shall have the first right but not the obligation to contribute 100% of the portion of the Cash Deficit Contribution or other amount required by Section 7.1 of such Non-Contributing Member, such election to be exercised within five (5) days following the Contribution Date. Notwithstanding The dilution penalty shall be determined as follows: the foregoing sentence, Southern Tier, Oneida and Nevada Gold agree that Percentage of the right to contribute any portion of a Delinquent Contribution of TrackPower (as a result of TrackPower being a Non-Contributing Member) that would dilute TrackPower below 50% of its initial Percentage in the Company Members will be the joint right of Southern Tier, Oneida and Nevada Gold (in the proportion of their respective Percentages unless otherwise agreed). With respect to the increased by an amount of the Delinquent Contribution contributed which is arrived at by a Contributing Member, such Contributing Member shall be issued a number of Units equal to the product of (i) 1.5 multiplying 150% times (ii) the quotient obtained by dividing (x) the amount of the Delinquent Contribution contributed by such Contributing Member by (y) the Price Per Unit established by the Board and specified in the Contribution Notice. The aggregate number of Units issued to all Contributing Members under this Section 7.2(c) shall be referred to as the “Cash Deficit Additional Contribution Units”. If Other Members contribute all or any portion of the Delinquent Contribution, the number of Units held by the Non-Contributing Member shall be reduced by the total number of Cash Deficit Additional Contribution Units issued to the Contributing Members; provided, that if there shall be more than one Non-Contributing Member in respect of a particular Cash Deficit Contribution and Other Members contribute all or any portion of the Delinquent Contributions of such Non-Contributing Members, then the number of Units held by each Non-Contributing Member shall be reduced by a number of Units equal to the product of (A) the total number of Cash Deficit Additional Contribution Units issued to Contributing Members, times (B) a fraction, (x) the numerator of which is the amount contributed by the Contributing Members on behalf of the Delinquent Contribution of such Non-Contributing Member Member, and (y) the denominator of which is the aggregate amount of all Delinquent Capital Contributions of all of the Members after the making of the additional Capital Contribution by the Contributing Members. The Percentage of the Non-Contributing MembersMember will be decreased by the same amount. For example, if (i) $1,000,000 in Cash Deficit Contributions are required, (ii) Nevada Gold contributes 100% of such amount, and (iii) the aggregate Capital Contributions of all of the Members after the making of the $1,000,000 Cash Deficit Contribution is $19,000,000, then Nevada Gold's Percentage shall be increased by 3.95%, calculated as follows: 150% X $500,000/$19,000,000 = 3.95% Trackpower's Percentage shall be decreased by 1.975% and Southern Tier's Percentage shall be decreased by 1.975%. For purposes of this Section, the aggregate amount of Capital Contributions made by the Members shall not include the amount of $5,000,000 associated with the Tioga Downs Contributed Amount (representing the incremental increase in value), which was credited one-half to TrackPower and one-half to Southern Tier.
(d) If, as a result of the provisions of Section 7.2(c)dilution penalty, a Member’s (the “"Diluted Member”") ownership Percentage falls to or below 50% of its initial Percentage set forth in Exhibit Section 3.1, then the other Members (in the proportion of their respective Percentages unless otherwise agreed) shall have the right by Notice notice (“"Purchase Notice”") to purchase all of the remaining Units Membership Interests of the Diluted Member, Member at a purchase price equal to 85% of the Fair Market Value of the remaining Units Membership Interests of the Diluted Member; provided, that such Purchase Notice shall not be delivered until November 7, 2007 or thereafter. Any transferee of a Diluted Member’s Units after such Member’s Percentage falls to or below 50% of its initial Percentage shall be subject to the purchase option unless otherwise agreed by the other Members. The Purchase Notice may designate any date, beginning ninety (90) days before the date of such Notice, and ending on the date of such Notice, as to the effective date on which Fair Market Value of the Units Membership Interests being purchased shall be determined. Upon giving of the Purchase Notice, the Fair Market Value of the Units Membership Interests shall be determined pursuant to Article 6. For purposes of clarity, if a Member is diluted to 50% or below its initial Percentage set forth in Exhibit 3.1 in March 2006, then the other Members may not deliver the Purchase Notice until November 7, 2007 or after and the Fair Market Value of the remaining Units being purchased would be determined as of a date no earlier than 90 days prior to the exercise of the purchase option (on or after November 7, 2007). The purchase price shall be payable 50% in cash due sixty (60) days from the date upon which Fair Market Value is determined pursuant to Article 6 (the “"Valuation Date”"), with the balance payable in 4 equal annual payments, plus interest, with the first installment due one year following the Valuation Date. The outstanding balance shall accrue interest at the interbank borrowing rate that banks charge each other for overnight loans (the “"fed funds rate”) and shall be evidenced by a promissory note which shall contain an acknowledgment by the Diluted Member that the obligations under such promissory note are not obligations of the Company or the other Members except for the Member(s) that have elected the purchase option in this Section 7.2(d").
(e) If, as a result of this Section 7.2 or any other provisions of this Agreement, a Member’s 's Percentage increases to 60% or greater, then the Board of Directors shall be reconstituted and increased if necessary to five members and such Member shall have the right to elect a majority of the three directors on to the Board, and each of the other two Members having a Percentage of at least 10% shall have the right to elect one Directordirector (or if there is only one other Member, the Member holding a 60% or greater Percentage shall have the right to elect three directors to the Board and the other Member shall have the right to elect two directors).
(f) Each of the Members acknowledges, agrees and represents the following:
(i) the provisions of this Section 7.2 are not intended to confer upon any lender or other financing source of the Company any rights or remedies against the Members or the Company and no such lender or financing source shall be deemed to be a third party beneficiary of this Section 7.2; and
(ii) such Member has not represented to any lender or other financing source of the Company, and such Member covenants and agrees that it shall not at anytime represent to any lender or other financing source of the Company, that such lender or financing source shall be entitled to rely on the provisions of this Section 7.2.
Appears in 1 contract
