Capital Contributions of Members. (a) Each prospective initial Common Member, to be admitted as a Member of the Company at the Initial Drawdown Date, must deliver to the Investment Manager a completed, executed Subscription Agreement, which must be satisfactory to the Company and the Investment Manager, and in which, among other things, such prospective Common Member represents that it is an "accredited investor" as defined in Rule 501(a) under the Securities Act, a "qualified client" within the meaning under Rule 205-3 of the Advisers Act and a "qualified purchaser" under Section 2(a)(51)(A) of the Investment Company Act and the regulations promulgated thereunder (an accredited investor, qualified client and qualified purchaser, collectively a "Qualified Investor"). The minimum Common Share Commitment to which a Common Member may subscribe shall be $10,000,000; provided, however, that the Investment Manager may, in its sole and absolute discretion, waive this requirement. On the Initial Drawdown Date, each initial prospective Common Member shall contribute to the Company 50% of its Common Share Commitment or such other proportion as the Board of Directors shall have determined. On the date of issuance of each series of Preferred Shares, each Person who is admitted as a Member holding Preferred Shares of such series in accordance with the applicable Statement of Preferences shall, in connection therewith, contribute to the Company an amount in cash equal to the purchase price for such Preferred Shares. (b) Subsequent to the Initial Drawdown Date, the Company will draw down Common Share Commitments on up to two additional Drawdown Dates (each, a "Subsequent Drawdown Date") during the Subscription Period. On each Subsequent Drawdown Date, the Company will issue Common Shares at Net Asset Value per Common Share as calculated within (c) Unfunded Commitments may be called by the Company at any time during the Subscription Period in any amount on not less than 15 days prior written notice to the Members; provided, however, that (i) all Capital Contributions for Common Shares shall be on a pro rata basis in proportion to each Common Member's respective Unfunded Commitment, (ii) the aggregate amount of Capital Contributions required on each Subsequent Drawdown Date shall be at least 25% of the aggregate Common Share Commitments (or, with respect to the last Subsequent Drawdown Date, any amount left undrawn), and (iii) all calls for Capital Contributions shall be made so that they are required to be funded on or prior to the end of the Subscription Period. (d) If any Member fails to be or remain a Qualified Investor or make full payment of any portion of its Share Commitment or any other payment required hereunder when due (collectively, a "Defaulting Member"), the Company shall give such Defaulting Member written notice of its failure to be a Qualified Investor or default in payment and in the event such failure or default shall continue beyond the tenth calendar day following such notice, the Company may, in its sole discretion, take any one or more of the following actions: (i) The Company may assist the Defaulting Member in finding a buyer for the Defaulting Member's Shares which buyer will assume the Defaulting Member's obligations hereunder, subject to the restrictions on transfer contained in Section 11.2 (in which case such Person shall, as a condition of purchasing such Shares, become a party to this Agreement and assume such Defaulting Member's obligation to make both defaulted and future Capital Contributions). (ii) The Company may pursue and enforce all rights and remedies the Company may have against the Defaulting Member, including a lawsuit to collect the overdue amount, if applicable, with interest calculated thereon at a rate equal to the Base Rate plus six percent (6%) per annum or, if greater, the annualized rate of total return per Common Share over the prior four fiscal quarters (or since commencement of operations if less than four fiscal quarters) (but not in excess of the highest rate per annum permitted by applicable law). (iii) The Company may offer a Defaulting Member's Common Shares to the Common Members (other than any Defaulting Member), which offer shall be made pro rata in accordance with the non-defaulting Members' respective Common Share Commitments, at a discount to the Net Asset Value of such Common Shares. The purchase price for such Common Shares will be determined in the sole discretion of a majority of the Independent Directors; provided, however, that such Defaulting Member shall receive not less than 66 2/3% of the most recently determined Net Asset Value of such Common Shares. If a non-defaulting Member elects not to purchase all of the Common Shares offered to it, such unpurchased Common Shares shall be reoffered pro rata to the non-defaulting Members who have purchased all of the Common Shares offered to them until either all of such Common Shares are acquired or no non-defaulting Member wishes to make a further investment. At the closing of such purchase (on a date and at a place designated by the Company), each purchasing Member shall, as payment in full for the Defaulting Member's Common Shares being purchased, (A) deliver a non-interest bearing, non-recourse promissory note (in a form approved by the Company) payable upon the earlier to occur of ten years after delivery of the note or liquidation of the Company, secured only by the Defaulting Member's Common Shares being purchased by such Member (excluding the portion of such Common Shares represented by contributions made by such purchaser with respect to such Common Shares), payable to the Defaulting Member in an amount equal to the purchase price of the portion of the Defaulting Member's Common Shares being purchased by such Member, and (B) assume the portion of the Defaulting Member's obligation to make both defaulted and future Capital Contributions and other payments pursuant to its Common Share Commitment and this Agreement which are commensurate with the portion of the Defaulting Member's Common Shares being purchased by such Member. Upon the closing of such purchase, each purchasing Member shall make a Capital Contribution in an aggregate amount equal to that portion of the assumed Common Share Commitment representing the defaulted Common Share Commitment, if any, of the Defaulting Member, and the balance of the assumed Common Share Commitment shall be added to such purchasing Member's Common Share Commitment for all purposes under this Agreement. The Company shall specify the procedures for making and accepting the offers contemplated by this subparagraph and shall, in its discretion, set time limits for acceptance. All Capital Contributions made by the purchasing Members shall be "Capital Contributions" made under this Agreement and Common Shares shall be issued to such Members accordingly. If all of the Defaulting Member's Common Shares are not purchased pursuant to the immediately preceding provisions, the Company may offer any remaining Common Shares to any other Person on the same terms as originally offered to the Members pursuant to such provisions, subject to the restrictions on transfer contained in Section 11.2 (in which case such Person shall, as a condition of purchasing such Common Shares, become a Member party to this Agreement and assume such Defaulting Member's obligation to make both defaulted and future Capital Contributions) or take any other action in relation to such remaining Common Shares as may be permitted pursuant to any other subparagraphs of this Section 7.1(d). (iv) The Company may repurchase, retire and cancel such Defaulting Member's Shares at a discount to the Net Asset Value of such Shares. The consideration to be paid to such Defaulting Member upon any repurchase, retirement or cancellation of such Shares will be determined in the sole discretion of a majority of the Independent Directors; provided, however, that such Defaulting Member shall receive not less than 66 2/3% of the Net Asset Value of such Shares. (v) The Company may offer to the Common Members (other than such Defaulting Member) for assumption by the non-defaulting Members such Defaulting Member's Common Share Commitment to make its Capital Contribution which was not made ("Defaulted Commitment"), which offer shall be made pro rata in accordance with the non-defaulting Members' respective Common Shares. If a non-defaulting Member elects not to assume the entire portion of the Defaulted Commitment offered to it, such unassumed Defaulted Commitment shall be reoffered pro rata to the non-defaulting Members who have elected to assume the entire portion of the Defaulted Commitment offered to them until either all of such Defaulted Commitment is assumed or no non-defaulting Member wishes to make a further assumption of the Defaulted Commitment. At the closing of such offer (on a date and at a place designated by the Company), each assuming Member shall make a Capital Contribution in an amount equal to that portion of the Defaulted Commitment assumed by it in accordance with the provisions of this subparagraph which is then due or past due. The Investment Manager shall specify the procedures for making and accepting the offers contemplated by this subparagraph and shall, in its discretion, set time limits for acceptance. If the entire Defaulted Commitment is not assumed pursuant to the preceding provisions, the Company may offer to any other Person for assumption any remaining portion of the Defaulted Commitment, subject to the restrictions on transfer contained in Section 11.2 (in which case such third party or parties shall become a party to this Agreement). All Capital Contributions made by the non-defaulting Members and other Persons pursuant to this subparagraph (v) shall be "Capital Contributions" made under this Agreement, and the Common Shares of each of such Members and other Persons shall be adjusted accordingly. Such Defaulting Member's Common Share Commitment shall be reduced by the aggregate amount of Defaulted Commitment, if any, assumed by the non-defaulting Members and such other Persons and for which payments have been actually received by the Company. (vi) The Company may reduce (effective on the date of the default) the Defaulting Member's Common Share Commitment (to the extent it has not been assumed by another Member or Person) to the amount of Capital Contributions actually made by such Defaulting Member (net of distributions pursuant to Section 8.1), and the aggregate Common Share Commitment of such Defaulting Member shall be commensurately reduced; provided, however, that the Common Share Commitments of the non-defaulting Members shall not be reduced. (vii) If the Defaulting Member is an entity formed for the purpose of investing in the Company and such Defaulting Member has failed to make any portion of a Capital Contribution when required and such failure is caused by the failure of one or more of such Defaulting Member's investors to either (i) make an equity contribution or (ii) deliver payment in exchange for any notes issued to such investor, to such Defaulting Member, the Company may, in its sole discretion, apply the provisions of this Section 7.1(d) to such Defaulting Member's Common Shares and/or Common Share Commitments on a pro rata basis to appropriately reflect the effect of the failure of such Defaulting Member's defaulting equity investors in a manner which is equitable to such Defaulting Member's non-defaulting equity investors. (e) No consent of any Member shall be required as a condition precedent to any transfer, assignment, assumption or other disposition of a Defaulting Member's Common Shares or Common Share Commitment, as the case may be, pursuant to Section 7.1(d). If all of the Defaulting Member's Common Shares and its Common Share Commitments are purchased in the manner set forth in Section 7.1(d), such Defaulting Member shall cease to be a Common Member in the Company and shall cease to have the power to exercise any rights or powers of a Common Member.
Appears in 1 contract
Samples: Operating Agreement (York Enhanced Strategies Fund, LLC)
Capital Contributions of Members. (a) Each prospective initial subscribing Common Member, to be admitted as a Member of the Company at the Initial Drawdown DateClosing, must deliver to the Investment Manager a completed, executed Subscription Agreement, which must be satisfactory to the Company and the Investment Manager, and in which, among other things, such prospective Common Member represents that it is an "“accredited investor" ” as defined in Rule 501(a) under the Securities Act, Act and a "“qualified client" ” within the meaning under of Rule 205-3 of the Advisers Act and a "qualified purchaser" under Section 2(a)(51)(A) of the Investment Company Act and the regulations promulgated thereunder (an accredited investor, qualified client and qualified purchaser, collectively a "Qualified Investor")Act. The minimum Common Share Commitment to which a Common Member may subscribe shall be $10,000,000100,000,000; provided, however, that the Investment Manager may, in its sole and absolute discretion, waive this requirement. On The Company may accept additional Common Share Commitments (each an “Additional Common Share Commitment”) from existing and additional prospective Common Members who satisfy the Initial Drawdown Daterequirements set forth in the first two sentences of this Section 7.1(a) until January 2, 2009. The Company shall hold periodic initial closings for an initial drawdown of Additional Common Share Commitments (each, a “Subsequent Closing”), at which each initial existing or prospective Common Member whose subscription for an Additional Common Share Commitment has been accepted since the most recent closing shall contribute to the Company 50% such portion of its such Additional Common Share Commitment or such other proportion as the Board of Directors Investment Manager shall have determineddetermined and notified to such existing or prospective Members in order for the drawdown in respect of such Additional Common Share Commitment shall equal the percentage of the initial Common Share Commitment drawn through such date. On the date of original issuance of each series of Preferred Shares, if any, each Person who is admitted as a Member holding Preferred Shares of such series in accordance with the applicable Statement of Preferences shall, in connection therewith, contribute to the Company an amount in cash equal to the purchase price for such Preferred Shares.
(b) Subsequent to the Initial Drawdown DateClosing, the Company will draw down Common Share Commitments and Additional Common Share Commitments on up to two additional multiple Drawdown Dates (each, a "“Subsequent Drawdown Date") during the Subscription Period”), which may coincide with Subsequent Closings. On each Subsequent Drawdown Date, the Company will issue Common Shares at Net Asset Value per Common Share as calculated withinwithin 48 hours prior to issuance (exclusive of Sundays and holidays) in an aggregate amount equal to the percentage of the Common Share Commitments drawn down; provided, however, that the Investment Manager may adjust the price per Common Share for the initial drawdown in respect of any Additional Common Share Commitment to be the Net Asset Value per Common Share as so calculated plus an additional amount in order to ensure that the subscribers for Additional Common Share Commitments are responsible for the appropriate portion of the Company’s organizational, offering and operational expenses (excluding interest and preferred dividends) through the relevant Subsequent Drawdown Date. Furthermore, prospective Common Members admitted to the Company after October 1, 2008 may be required to pay a capital charge on the amount of their Additional Common Share Commitment at a per annum rate equal to an amount approved by the Board of Directors calculated from the Initial Closing until the date of the applicable Subsequent Closing.
(c) Unfunded Commitments may be called by the Company at any time during the Subscription Period in any amount on not less than 15 days 10 calendar days’ prior written notice to the Common Members; provided, however, that (i) except as set forth in the proviso to Section 7.1(b), all Capital Contributions for Common Shares shall be on a pro rata basis in proportion to each Common Member's ’s respective Unfunded Commitment, Commitment and (ii) the aggregate amount of Capital Contributions required on each Subsequent Drawdown Date shall be at least 25% of the aggregate Common Share Commitments (or, with respect to the last Subsequent Drawdown Date, any amount left undrawn), and (iii) all calls for Capital Contributions shall be made so that they are required to be funded on or prior to the end of the Subscription Commitment Period.
(d) If any Common Member fails to be or remain a Qualified Investor or make full payment of any portion of its Common Share Commitment or any other payment required hereunder when due (collectively, a "“Defaulting Member"”), the Company shall give such Defaulting Member written notice of its failure to be a Qualified Investor or default in payment and in the event such failure or default shall continue beyond the tenth calendar day following such notice, the Company may, in its sole discretion, take any one or more of the following actions:
(i) The Company may assist the Defaulting Member in finding a buyer for the Defaulting Member's ’s Common Shares which buyer will assume the Defaulting Member's ’s obligations hereunder, subject to the restrictions on transfer contained in Section 11.2 (in which case such Person shall, as a condition of purchasing such Common Shares, become a party to this Agreement and assume such Defaulting Member's ’s obligation to make both defaulted and future Capital Contributions).
(ii) The Company may pursue and enforce all rights and remedies the Company may have against the Defaulting Member, including a lawsuit to collect the overdue amount and the costs (including attorneys’ fees) and expenses of collecting such overdue amount, if applicable, with interest calculated thereon commencing on the date such Capital Contribution was due at a rate equal to the lesser of the Base Rate plus six five percent (65%) per annum or, if greater, and the annualized rate of total return per Common Share over the prior four fiscal quarters (or since commencement of operations if less than four fiscal quarters) (but not in excess of the highest maximum rate per annum permitted by applicable law).
(iii) The Company may offer a Defaulting Member's ’s Common Shares to the Common Members (other than any Defaulting Member), which offer shall be made pro rata in accordance with the non-defaulting Members' ’ respective Common Share Commitments, at a discount to the Net Asset Value of such Common Shares. The purchase price for such Common Shares will be determined in the sole discretion of a majority of the Independent Directors; provided, however, that such Defaulting Member shall receive not less than 66 2/366% of the most recently determined Net Asset Value of such Common Shares. If a non-defaulting Member elects not to purchase all of the Common Shares offered to it, such unpurchased Common Shares shall be reoffered pro rata to the non-defaulting Members who have purchased all of the Common Shares offered to them until either all of such Common Shares are acquired or no non-defaulting Member wishes to make a further investment. At the closing of such purchase (on a date and at a place designated by the Company), each purchasing Member shall, as payment in full for the Defaulting Member's ’s Common Shares being purchased, (A) deliver a non-interest bearing, non-recourse promissory note (in a form approved by the Company) payable upon the earlier to occur of ten years after delivery of the note or liquidation of the Company, secured only by the Defaulting Member's ’s Common Shares being purchased by such Member (excluding the portion of such Common Shares represented by contributions made by such purchaser with respect to such Common Shares), payable to the Defaulting Member in an amount equal to the purchase price of the portion of the Defaulting Member's ’s Common Shares being purchased by such Member, and (B) assume the portion of the Defaulting Member's ’s obligation to make both defaulted and future Capital Contributions and other payments pursuant to its Common Share Commitment and this Agreement which are commensurate with the portion of the Defaulting Member's ’s Common Shares being purchased by such Member. Upon the closing of such purchase, each purchasing Member shall make a Capital Contribution in an aggregate amount equal to that portion of the assumed Common Share Commitment representing the defaulted Common Share Commitment, if any, Commitment of the Defaulting Member, and the balance of the assumed Common Share Commitment shall be added to such purchasing Member's ’s Common Share Commitment for all purposes under this Agreement. The Company shall specify the procedures for making and accepting the offers contemplated by this subparagraph and shall, in its discretion, set time limits for acceptance. All Capital Contributions made by the purchasing Members shall be "“Capital Contributions" ” made under this Agreement and Common Shares shall be issued to such Members accordingly. If all of the Defaulting Member's ’s Common Shares are not purchased pursuant to the immediately preceding provisions, the Company may offer any remaining Common Shares to any other Person on the same terms as originally offered to the Members pursuant to such provisions, subject to the restrictions on transfer contained in Section 11.2 (in which case such Person shall, as a condition of purchasing such Common Shares, become a Member party to this Agreement and assume such Defaulting Member's ’s obligation to make both defaulted and future Capital Contributions) or take any other action in relation to such remaining Common Shares as may be permitted pursuant to any other subparagraphs of this Section 7.1(d).
(iv) The Company may repurchase, retire and cancel such Defaulting Member's ’s Common Shares at a discount to the Net Asset Value of such Common Shares. The consideration to be paid to such Defaulting Member upon any repurchase, retirement or cancellation of such Common Shares will be determined in the sole discretion of a majority of the Independent Directors; provided, however, that such Defaulting Member shall receive not less than 66 2/366% of the Net Asset Value of such Common Shares.
(v) The Company may offer to the Common Members (other than such Defaulting Member) for assumption by the non-defaulting Members such Defaulting Member's ’s Common Share Commitment to make its Capital Contribution which was not made ("“Defaulted Commitment"”), which offer shall be made pro rata in accordance with the non-defaulting Members' ’ respective Common Shares. If a non-defaulting Member elects not to assume the entire portion of the Defaulted Commitment offered to it, such unassumed Defaulted Commitment shall be reoffered pro rata to the non-defaulting Members who have elected to assume the entire portion of the Defaulted Commitment offered to them until either all of such Defaulted Commitment is assumed or no non-defaulting Member wishes to make a further assumption of the Defaulted Commitment. At the closing of such offer (on a date and at a place designated by the Company), each assuming Member shall make a Capital Contribution in an amount equal to that portion of the Defaulted Commitment assumed by it in accordance with the provisions of this subparagraph which is then due or past due. The Investment Manager shall specify the procedures for making and accepting the offers contemplated by this subparagraph and shall, in its discretion, set time limits for acceptance. If the entire Defaulted Commitment is not assumed pursuant to the preceding provisions, the Company may offer to any other Person for assumption any remaining portion of the Defaulted Commitment, subject to the restrictions on transfer contained in Section 11.2 (in which case such third party or parties shall become a party to this Agreement). All Capital Contributions made by the non-defaulting Members and other Persons pursuant to this subparagraph (v) shall be "“Capital Contributions" ” made under this Agreement, and the Common Shares of each of such Members and other Persons shall be adjusted accordingly. Such Defaulting Member's ’s Common Share Commitment shall be reduced by the aggregate amount of Defaulted Commitment, if any, Commitment assumed by the non-defaulting Members and such other Persons and for which payments have been actually received by the Company.
(vi) The Company may reduce (effective on the date of the default) the Defaulting Member's Common Share ’s Unfunded Commitment (to the extent it has not been assumed by another Member or Person) to the amount of Capital Contributions actually made by such Defaulting Member (net of distributions pursuant to Section 8.1), and the aggregate Common Share Commitment of such Defaulting Member shall be commensurately reduced; provided, however, that the Common Share Commitments of the non-defaulting Members shall not be reduced.
(vii) If the Defaulting Member is an entity formed for the purpose of investing in the Company and such Defaulting Member has failed Member’s failure to make any portion of a Capital Contribution when required and such failure is caused by the failure of one or more of such Defaulting Member's ’s investors to either (i) make an equity contribution or (ii) deliver payment in exchange for any notes issued to such investor, to such Defaulting Member, the Company may, in its sole discretion, apply the provisions of this Section 7.1(d) to such Defaulting Member's ’s Common Shares and/or Common Share Commitments on a pro rata basis to appropriately reflect the effect of the failure of such Defaulting Member's ’s defaulting equity investors in a manner which is equitable to such Defaulting Member's ’s non-defaulting equity investors.
(viii) The Company may require the non-defaulting Members to make additional Capital Contributions, pro rata based on their respective Unfunded Commitments, in an aggregate amount equal to the shortfall created by such Defaulted Commitment (but not, for any such non-defaulting Member, to exceed such non-defaulting Member’s Unfunded Commitment).
(ix) The Company may offer a Defaulting Member’s Common Shares to any other Person at a value determined by the Investment Manager in its sole discretion, subject to the restrictions on transfer contained in Section 11.2 (in which case such Person shall, as a condition of purchasing such Common Shares, become a Member party to this Agreement and assume such Defaulting Member’s obligation to make both defaulted and future Capital Contributions).
(x) The Company may cause distributions that would otherwise be made to the Defaulting Member pursuant to this Agreement to be credited against the amount of the Defaulted Commitment in a manner to be determined by the Investment Manager.
(e) No consent of any Member shall be required as a condition precedent to any transfer, assignment, assumption or other disposition of a Defaulting Member's ’s Common Shares or Common Share Commitment, as the case may be, pursuant to Section 7.1(d). If all of the Defaulting Member's ’s Common Shares and its Common Share Commitments are purchased in the manner set forth in Section 7.1(d), such Defaulting Member shall cease to be a Common Member in the Company and shall cease to have the power to exercise any rights or powers of a Common Member.
Appears in 1 contract
Samples: Limited Liability Company Agreement (PNMAC Mortgage Opportunity Fund, LLC)
Capital Contributions of Members. (a) Each prospective initial Common MemberThe Class A Member has made (or will promptly make, at the request of the Board, a contribution to be admitted as a Member the capital of the Company at in the amount of twenty million dollars ($20,000,000) (the “Initial Drawdown Date, must deliver to the Investment Manager a completed, executed Subscription Agreement, which must be satisfactory to the Company and the Investment Manager, and in which, among other things, such prospective Common Member represents that it is an "accredited investor" as defined in Rule 501(a) under the Securities Act, a "qualified client" within the meaning under Rule 205-3 of the Advisers Act and a "qualified purchaser" under Section 2(a)(51)(A) of the Investment Company Act and the regulations promulgated thereunder (an accredited investor, qualified client and qualified purchaser, collectively a "Qualified Investor"Class A Contribution”). The minimum Common Share Commitment to which a Common Member may subscribe shall be $10,000,000; provided, however, that the Investment Manager may, in its sole and absolute discretion, waive this requirement. On the Initial Drawdown Date, each initial prospective Common Member shall contribute to the Company 50% of its Common Share Commitment or such other proportion as the Board of Directors shall have determined. On the date of issuance of each series of Preferred Shares, each Person who is admitted as a Member holding Preferred Shares of such series in accordance with the applicable Statement of Preferences shall, in connection therewith, contribute to the Company an amount in cash equal to the purchase price for such Preferred Shares.
(b) Subsequent The Class B Member has made (or will promptly make, at the request of the Board, a contribution to the Initial Drawdown Date, capital of the Company will draw down Common Share Commitments on up to two additional Drawdown Dates in the amount of twenty million dollars (each, a "Subsequent Drawdown Date"$20,000,000) during (the Subscription Period. On each Subsequent Drawdown Date, the Company will issue Common Shares at Net Asset Value per Common Share as calculated within“Initial Class B Contribution”).
(c) Unfunded Commitments may The aggregate Initial Class A Contribution and the Initial Class B Contribution shall each be called by made as of the Effective Date in cash, along with and the contribution of mutually agreed costs and expenses incurred on behalf of the Company at any time during the Subscription Period in any amount on not less than 15 days prior written notice to the Members; provided, however, that (i) all Capital Contributions for Common Shares shall be on a pro rata basis in proportion to each Common Member's respective Unfunded Commitment, (ii) the aggregate amount of Capital Contributions required on each Subsequent Drawdown Date shall be at least 25% of the aggregate Common Share Commitments (or, with respect to the last Subsequent Drawdown Date, any amount left undrawn), and (iii) all calls for Capital Contributions shall be made so that they are required to be funded on or prior to the end of the Subscription PeriodEffective Date.
(d) If In the event that the Board approves an additional Facility or Facilities each Capital Member shall be required to make subsequent capital contributions in such amounts and on such dates as may be required by the Board, provided that following a Company Xxxxxxxx Trigger Event or Cinemark Xxxxxxxx Trigger Event, subsequent mandatory capital contributions shall require the consent of the Class C Member. In the event of mandatory capital call, each Capital Member shall be required to contribute, pro rata, the aggregate amount of the capital call (a “Subsequent Capital Contribution”). In the event that any Capital Member fails to be or remain a Qualified Investor or make full payment of any portion of its Share Commitment Initial Capital Contribution or any other payment required hereunder when due Subsequent Capital Contribution within thirty (collectively30) days of the date set forth in a notice by the Board (or within thirty (30) days of the Effective Date with respect to an Initial Capital Contribution) (in each case, a "Defaulting Member"“Capital Contribution Default”), the Company shall give such Defaulting non-defaulting Member written notice of its failure to be a Qualified Investor or default in payment and in the event such failure or default shall continue beyond the tenth calendar day following such notice, the Company may, in its sole discretion, take any may elect one or more of the following actionsfollowing:
(i) The Company such non-defaulting Member may assist contribute the Defaulting Member in finding amount of the defaulting Member’s Capital Contribution, with a buyer for the Defaulting Member's Shares which buyer will assume the Defaulting Member's obligations hereunder, subject corresponding adjustment to the restrictions Membership Interest held by the Members based on transfer contained in Section 11.2 (in which case such Person shall, as a condition the aggregate amount of purchasing such Shares, become a party to this Agreement and assume such Defaulting capital contributed by each Member's obligation to make both defaulted and future Capital Contributions).; or
(ii) The Company may pursue and enforce all rights and remedies the Company may have against the Defaulting Member, including a lawsuit to collect the overdue amount, if applicable, with interest calculated thereon at a rate equal to the Base Rate plus six percent (6%) per annum or, if greater, the annualized rate of total return per Common Share over the prior four fiscal quarters (or since commencement of operations if less than four fiscal quarters) (but not in excess of the highest rate per annum permitted by applicable law).
(iii) The Company may offer a Defaulting Member's Common Shares to the Common Members (other than any Defaulting Member), which offer shall be made pro rata in accordance with the non-defaulting Members' respective Common Share Commitments, at Member may contribute the amount of the defaulting Member’s Capital Contribution in the form of a discount to loan evidenced by a capital note in the Net Asset Value form of such Common SharesExhibit E (a “Capital Note”). The purchase price for such Common Shares will be determined in the sole discretion issuance of a majority of the Independent Directors; provided, however, that such Defaulting Member shall receive not less than 66 2/3% of the most recently determined Net Asset Value of such Common Shares. If a non-defaulting Member elects not to purchase all of the Common Shares offered to it, such unpurchased Common Shares shall be reoffered pro rata any additional Membership Units to the non-defaulting Members who have purchased all Member in the event of a Capital Contribution Default will be based on a valuation equal to the lesser of the Common Shares offered to them until either all of such Common Shares are acquired post-money valuation following the latest Capital Contribution or no at the non-defaulting Member wishes to make a further investment. At Member’s option, the closing of such purchase (on a date and at a place designated by the Company), each purchasing Member shall, as payment in full for the Defaulting Member's Common Shares being purchased, (A) deliver a non-interest bearing, non-recourse promissory note (in a form approved by the Company) payable upon the earlier to occur of ten years after delivery fair market value of the note or liquidation of the Company, secured only Membership Units as determined by the Defaulting Member's Common Shares being purchased by such Member (excluding the portion of such Common Shares represented by contributions made by such purchaser with respect to such Common Shares), payable to the Defaulting Member in an amount equal to the purchase price of the portion of the Defaulting Member's Common Shares being purchased by such Member, and (B) assume the portion of the Defaulting Member's obligation to make both defaulted and future Capital Contributions and other payments pursuant to its Common Share Commitment and this Agreement which are commensurate with the portion of the Defaulting Member's Common Shares being purchased by such Member. Upon the closing of such purchase, each purchasing Member shall make a Capital Contribution in an aggregate amount equal to that portion of the assumed Common Share Commitment representing the defaulted Common Share Commitment, if any, of the Defaulting Member, and the balance of the assumed Common Share Commitment shall be added to such purchasing Member's Common Share Commitment for all purposes under this Agreement. The Company shall specify the procedures for making and accepting the offers contemplated by this subparagraph and shall, in its discretion, set time limits for acceptance. All Capital Contributions made by the purchasing Members shall be "Capital Contributions" made under this Agreement and Common Shares shall be issued to such Members accordingly. If all of the Defaulting Member's Common Shares are not purchased pursuant to the immediately preceding provisions, the Company may offer any remaining Common Shares to any other Person on the same terms as originally offered to the Members pursuant to such provisions, subject to the restrictions on transfer contained in Section 11.2 (in which case such Person shall, as a condition of purchasing such Common Shares, become a Member third party to this Agreement and assume such Defaulting Member's obligation to make both defaulted and future Capital Contributions) or take any other action in relation to such remaining Common Shares as may be permitted pursuant to any other subparagraphs of this Section 7.1(d).
(iv) The Company may repurchase, retire and cancel such Defaulting Member's Shares at a discount to the Net Asset Value of such Shares. The consideration to be paid to such Defaulting Member upon any repurchase, retirement or cancellation of such Shares will be determined in the sole discretion of a majority of the Independent Directors; provided, however, that such Defaulting Member shall receive not less than 66 2/3% of the Net Asset Value of such Shares.
(v) The Company may offer to the Common Members (other than such Defaulting Member) for assumption appraiser selected by the non-defaulting Members such Defaulting Member's Common Share Commitment to make its Capital Contribution which was not made ("Defaulted Commitment"), which offer shall be made pro rata in accordance with Member and approved by the non-defaulting Members' respective Common Shares. If a non-defaulting Member elects not to assume the entire portion of the Defaulted Commitment offered to it, such unassumed Defaulted Commitment shall be reoffered pro rata to the non-defaulting Members who have elected to assume the entire portion of the Defaulted Commitment offered to them until either all of such Defaulted Commitment is assumed or no non-defaulting Member wishes to make a further assumption of the Defaulted Commitment. At the closing of such offer (on a date and at a place designated by the Company), each assuming Member shall make a Capital Contribution in an amount equal to that portion of the Defaulted Commitment assumed by it in accordance with the provisions of this subparagraph which is then due or past due. The Investment Manager shall specify the procedures for making and accepting the offers contemplated by this subparagraph and shall, in its discretion, set time limits for acceptance. If the entire Defaulted Commitment is not assumed pursuant to the preceding provisions, the Company may offer to any other Person for assumption any remaining portion of the Defaulted Commitment, subject to the restrictions on transfer contained in Section 11.2 (in which case such third party or parties shall become a party to this Agreement). All Capital Contributions made by the non-defaulting Members and other Persons pursuant to this subparagraph (v) shall be "Capital Contributions" made under this Agreement, and the Common Shares of each of such Members and other Persons shall be adjusted accordingly. Such Defaulting Member's Common Share Commitment shall be reduced by the aggregate amount of Defaulted Commitment, if any, assumed by the non-defaulting Members and such other Persons and for which payments have been actually received by the Company.
(vi) The Company may reduce (effective on the date of the default) the Defaulting Member's Common Share Commitment (to the extent it has not been assumed by another Member or Person) to the amount of Capital Contributions actually made by such Defaulting Member (net of distributions pursuant to Section 8.1), and the aggregate Common Share Commitment of such Defaulting Member shall be commensurately reduced; provided, however, that the Common Share Commitments of the non-defaulting Members whose approval shall not be reducedunreasonably withheld, delayed or conditioned).
(vii) If the Defaulting Member is an entity formed for the purpose of investing in the Company and such Defaulting Member has failed to make any portion of a Capital Contribution when required and such failure is caused by the failure of one or more of such Defaulting Member's investors to either (i) make an equity contribution or (ii) deliver payment in exchange for any notes issued to such investor, to such Defaulting Member, the Company may, in its sole discretion, apply the provisions of this Section 7.1(d) to such Defaulting Member's Common Shares and/or Common Share Commitments on a pro rata basis to appropriately reflect the effect of the failure of such Defaulting Member's defaulting equity investors in a manner which is equitable to such Defaulting Member's non-defaulting equity investors.
(e) No consent of any Member shall be required as a condition precedent to any transfer, assignment, assumption or other disposition of a Defaulting Member's Common Shares or Common Share Commitment, as the case may be, pursuant to Section 7.1(d). If all of the Defaulting Member's Common Shares and its Common Share Commitments are purchased in the manner set forth in Section 7.1(d), such Defaulting Member shall cease to be a Common Member in the Company and shall cease to have the power to exercise any rights or powers of a Common Member.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Cinemark Holdings, Inc.)
Capital Contributions of Members. (a) Each prospective initial subscribing Common Member, to be admitted as a Member of the Company at the Initial Drawdown Date, must deliver to the Investment Manager a completed, executed Subscription Agreement, which must be satisfactory to the Company and the Investment Manager, and in which, among other things, such prospective Common Member represents that it is an "accredited investor" as defined in Rule 501(a) under the Securities Act, Act and a "qualified client" within the meaning under of Rule 205-3 of the Advisers Act and a "qualified purchaser" under Section 2(a)(51)(A) of the Investment Company Act and the regulations promulgated thereunder (an accredited investor, qualified client and qualified purchaser, collectively a "Qualified Investor")Act. The minimum Common Share Commitment to which a Common Member may subscribe shall be $10,000,000; provided, however, that the Investment Manager may, in its sole and absolute discretion, waive this requirement. On the Initial Drawdown Date, each initial prospective Common Member whose subscription has been accepted on or prior to such date shall contribute to the Company 5020% of its Common Share Commitment or such other proportion as the Board of Directors Investment Manager shall have determined. The Company may accept additional Common Share Commitments (each an "Additional Common Share Commitment") from existing and additional prospective Common Members who satisfy the requirements set forth in the first two sentences of this Section 7.1(a) until the third Drawdown Date. On the date of original issuance of each series of Preferred Shares, each Person who is admitted as a Member holding Preferred Shares of such series in accordance with the applicable Statement of Preferences shall, in connection therewith, contribute to the Company an amount in cash equal to the purchase price for such Preferred Shares.
(b) Subsequent to the Initial Drawdown Date, the Company will draw down Common Share Commitments on up to two additional multiple Drawdown Dates (each, a "Subsequent Drawdown Date") during the Subscription Period). On each Subsequent Drawdown Date, the Company will issue Common Shares at Net Asset Value per Common Share as calculated withinwithin 48 hours prior to issuance (exclusive of Sundays and holidays) in an aggregate amount equal to the percentage of the Common Share Commitments drawn down; provided, however, that in order to ensure that the appropriate portion of the Company's organizational, offering and operational expenses (excluding interest and preferred dividends) through the relevant Subsequent Drawdown Date are borne by the subscribers for Additional Common Share Commitments, the price per Common Share for the initial drawdown in respect of any Additional Common Share Commitment shall be adjusted to be the Net Asset Value per Common Share as so calculated plus an additional amount not less than the quotient obtained by dividing (i) the sum of (A) the product obtained by multiplying (I) 20% of the aggregate amount of such Additional Common Share Commitment times (II) the quotient obtained by dividing (x) the aggregate amount of the organizational and offering expenses, and an allocable portion of operational expenses (excluding interest and preferred dividends), of the Company in respect of the Common Shares incurred for accounting purposes through the related pricing date by (y) 20% of the aggregate amount of the Common Share Commitments (including such Additional Common Share Commitments) accepted through such pricing date plus (B) the product obtained by multiplying (I) the aggregate amount of such Additional Common Share Commitment times (II) the quotient obtained by dividing (x) the aggregate amount of sales commissions payable by the Company in respect of all such Additional Common Share Commitments by (y) the aggregate amount of all Common Share Commitments by (ii) the number of Common Shares being purchased at such initial drawdown in respect of the portion of such Additional Common Share Commitment being drawn at such time (which number shall be calculated by dividing such initial drawdown amount of such Additional Common Share Commitment by the Net Asset Value per Common Share as calculated pursuant to the initial clause of this sentence without regard to this proviso). For the avoidance doubt, the phrase "such additional Common Share Commitment" (or the plural thereof) refers only to Additional Common Share Commitments with respect to which such Subsequent Drawdown Date is the date of the initial drawdown. On the first Subsequent Drawdown Date after which any particular Additional Common Share Commitment has been accepted by the Company, the drawdown in respect of such Additional Common Share Commitment shall equal the percentage of the initial Common Share Commitments drawn through such date.
(c) Unfunded Commitments may be called by the Company at any time during the Subscription Period in any amount on not less than 15 days prior written notice to the Common Members; provided, however, that (i) except as set forth in the proviso to Section 7.1(b), all Capital Contributions for Common Shares shall be on a pro rata basis in proportion to each Common Member's respective Unfunded Commitment, (ii) the aggregate amount of Capital Contributions required on each Subsequent Drawdown Date shall be at least 2510% of the aggregate Common Share Commitments (or, with respect to the last Subsequent Drawdown Date, any amount left undrawn), and (iii) all calls for Capital Contributions shall be made so that they are required to be funded on or prior to the end of the Subscription Period.
(d) If any Common Member fails to be or remain a Qualified Investor or make full payment of any portion of its Common Share Commitment or any other payment required hereunder when due (collectively, a "Defaulting Member"), the Company shall give such Defaulting Member written notice of its failure to be a Qualified Investor or default in payment and in the event such failure or default shall continue beyond the tenth calendar day following such notice, the Company may, in its sole discretion, take any one or more of the following actions:
(i) The Company may assist the Defaulting Member in finding a buyer for the Defaulting Member's Common Shares which buyer will assume the Defaulting Member's obligations hereunder, subject to the restrictions on transfer contained in Section 11.2 (in which case such Person shall, as a condition of purchasing such Common Shares, become a party to this Agreement and assume such Defaulting Member's obligation to make both defaulted and future Capital Contributions).
(ii) The Company may pursue and enforce all rights and remedies the Company may have against the Defaulting Member, including a lawsuit to collect the overdue amount, if applicable, with interest calculated thereon at a rate equal to the Base Rate plus six percent (6%) per annum or, if greater, the annualized rate of total return per Common Share over the prior four fiscal quarters (or since commencement of operations if less than four fiscal quarters) (but not in excess of the highest rate per annum permitted by applicable law).
(iii) The Company may offer a Defaulting Member's Common Shares to the Common Members (other than any Defaulting Member), which offer shall be made pro rata in accordance with the non-defaulting Members' respective Common Share Commitments, at a discount to the Net Asset Value of such Common Shares. The purchase price for such Common Shares will be determined in the sole discretion of a majority of the Independent Directors; provided, however, that such Defaulting Member shall receive not less than 66 2/366% of the most recently determined Net Asset Value of such Common Shares. If a non-defaulting Member elects not to purchase all of the Common Shares offered to it, such unpurchased Common Shares shall be reoffered pro rata to the non-defaulting Members who have purchased all of the Common Shares offered to them until either all of such Common Shares are acquired or no non-defaulting Member wishes to make a further investment. At the closing of such purchase (on a date and at a place designated by the Company), each purchasing Member shall, as payment in full for the Defaulting Member's Common Shares being purchased, (A) deliver a non-interest bearing, non-recourse promissory note (in a form approved by the Company) payable upon the earlier to occur of ten years after delivery of the note or liquidation of the Company, secured only by the Defaulting Member's Common Shares being purchased by such Member (excluding the portion of such Common Shares represented by contributions made by such purchaser with respect to such Common Shares), payable to the Defaulting Member in an amount equal to the purchase price of the portion of the Defaulting Member's Common Shares being purchased by such Member, and (B) assume the portion of the Defaulting Member's obligation to make both defaulted and future Capital Contributions and other payments pursuant to its Common Share Commitment and this Agreement which are commensurate with the portion of the Defaulting Member's Common Shares being purchased by such Member. Upon the closing of such purchase, each purchasing Member shall make a Capital Contribution in an aggregate amount equal to that portion of the assumed Common Share Commitment representing the defaulted Common Share Commitment, if any, Commitment of the Defaulting Member, and the balance of the assumed Common Share Commitment shall be added to such purchasing Member's Common Share Commitment for all purposes under this Agreement. The Company shall specify the procedures for making and accepting the offers contemplated by this subparagraph and shall, in its discretion, set time limits for acceptance. All Capital Contributions made by the purchasing Members shall be "Capital Contributions" made under this Agreement and Common Shares shall be issued to such Members accordingly. If all of the Defaulting Member's Common Shares are not purchased pursuant to the immediately preceding provisions, the Company may offer any remaining Common Shares to any other Person on the same terms as originally offered to the Members pursuant to such provisions, subject to the restrictions on transfer contained in Section 11.2 (in which case such Person shall, as a condition of purchasing such Common Shares, become a Member party to this Agreement and assume such Defaulting Member's obligation to make both defaulted and future Capital Contributions) or take any other action in relation to such remaining Common Shares as may be permitted pursuant to any other subparagraphs of this Section 7.1(d).
(iv) The Company may repurchase, retire and cancel such Defaulting Member's Common Shares at a discount to the Net Asset Value of such Common Shares. The consideration to be paid to such Defaulting Member upon any repurchase, retirement or cancellation of such Common Shares will be determined in the sole discretion of a majority of the Independent Directors; provided, however, that such Defaulting Member shall receive not less than 66 2/366% of the Net Asset Value of such Common Shares.
(v) The Company may offer to the Common Members (other than such Defaulting Member) for assumption by the non-defaulting Members such Defaulting Member's Common Share Commitment to make its Capital Contribution which was not made ("Defaulted Commitment"), which offer shall be made pro rata in accordance with the non-defaulting Members' respective Common Shares. If a non-defaulting Member elects not to assume the entire portion of the Defaulted Commitment offered to it, such unassumed Defaulted Commitment shall be reoffered pro rata to the non-defaulting Members who have elected to assume the entire portion of the Defaulted Commitment offered to them until either all of such Defaulted Commitment is assumed or no non-defaulting Member wishes to make a further assumption of the Defaulted Commitment. At the closing of such offer (on a date and at a place designated by the Company), each assuming Member shall make a Capital Contribution in an amount equal to that portion of the Defaulted Commitment assumed by it in accordance with the provisions of this subparagraph which is then due or past due. The Investment Manager shall specify the procedures for making and accepting the offers contemplated by this subparagraph and shall, in its discretion, set time limits for acceptance. If the entire Defaulted Commitment is not assumed pursuant to the preceding provisions, the Company may offer to any other Person for assumption any remaining portion of the Defaulted Commitment, subject to the restrictions on transfer contained in Section 11.2 (in which case such third party or parties shall become a party to this Agreement). All Capital Contributions made by the non-defaulting Members and other Persons pursuant to this subparagraph (v) shall be "Capital Contributions" made under this Agreement, and the Common Shares of each of such Members and other Persons shall be adjusted accordingly. Such Defaulting Member's Common Share Commitment shall be reduced by the aggregate amount of Defaulted Commitment, if any, Commitment assumed by the non-defaulting Members and such other Persons and for which payments have been actually received by the Company.
(vi) The Company may reduce (effective on the date of the default) the Defaulting Member's Common Share Commitment (to the extent it has not been assumed by another Member or Person) to the amount of Capital Contributions actually made by such Defaulting Member (net of distributions pursuant to Section 8.1), and the aggregate Common Share Commitment of such Defaulting Member shall be commensurately reduced; provided, however, that the Common Share Commitments of the non-defaulting Members shall not be reduced.
(vii) If the Defaulting Member is an entity formed for the purpose of investing in the Company and such Defaulting Member has failed Member's failure to make any portion of a Capital Contribution when required and such failure is caused by the failure of one or more of such Defaulting Member's investors to either (i) make an equity contribution or (ii) deliver payment in exchange for any notes issued to such investor, to such Defaulting Member, the Company may, in its sole discretion, apply the provisions of this Section 7.1(d) to such Defaulting Member's Common Shares and/or Common Share Commitments on a pro rata basis to appropriately reflect the effect of the failure of such Defaulting Member's defaulting equity investors in a manner which is equitable to such Defaulting Member's non-defaulting equity investors.
(e) No consent of any Member shall be required as a condition precedent to any transfer, assignment, assumption or other disposition of a Defaulting Member's Common Shares or Common Share Commitment, as the case may be, pursuant to Section 7.1(d). If all of the Defaulting Member's Common Shares and its Common Share Commitments are purchased in the manner set forth in Section 7.1(d), such Defaulting Member shall cease to be a Common Member in the Company and shall cease to have the power to exercise any rights or powers of a Common Member.
Appears in 1 contract
Samples: Operating Agreement (Tennenbaum Opportunities Fund V, LLC)
Capital Contributions of Members. (a) Each prospective initial Common Member, to be admitted as a Member of the Company at the Initial Drawdown Date, must deliver to the Investment Manager a completed, executed Subscription Agreement, which must be satisfactory to the Company and the Investment Manager, and in which, among other things, such prospective Common Member represents that it is an "accredited investor" as defined in Rule 501(a) under the Securities Act, Act and a "qualified client" within the meaning under of Rule 205-3 of the Advisers Act and a "qualified purchaser" under Section 2(a)(51)(A) of the Investment Company Act and the regulations promulgated thereunder (an accredited investor, qualified client and qualified purchaser, collectively a "Qualified Investor")Act. The minimum Common Share Commitment to which a Common Member may subscribe shall be $10,000,000125,000,000; provided, however, that the Investment Manager may, in its sole and absolute discretion, waive this requirement. On the Initial Drawdown Date, each initial prospective Common Member shall contribute to the Company 5020% of its Common Share Commitment or such other proportion as the Board of Directors shall have determined. On the date of original issuance of each series of Preferred Shares, each Person who is admitted as a Member holding Preferred Shares of such series in accordance with the applicable Statement of Preferences shall, in connection therewith, contribute to the Company an amount in cash equal to the purchase price for such Preferred Shares.
(b) Subsequent to the Initial Drawdown Date, the Company will draw down Common Share Commitments on up to two additional multiple Drawdown Dates (each, a "Subsequent Drawdown Date") during the Subscription Period). On each Subsequent Drawdown Date, the Company will issue Common Shares at Net Asset Value per Common Share as calculated withinwithin 48 hours prior to issuance (exclusive of Sundays and holidays) in an aggregate amount equal to the percentage of the Common Share Commitments drawn down.
(c) Unfunded Commitments may be called by the Company at any time during the Subscription Period in any amount on not less than 15 days prior written notice to the Common Members; provided, however, that (i) all Capital Contributions for Common Shares shall be on a pro rata basis in proportion to each Common Member's respective Unfunded Commitment, (ii) the aggregate amount of Capital Contributions required on each Subsequent Drawdown Date shall be at least 2510% of the aggregate Common Share Commitments (or, with respect to the last Subsequent Drawdown Date, any amount left undrawn), and (iii) all calls for Capital Contributions shall be made so that they are required to be funded on or prior to the end of the Subscription Period.
(d) If any Common Member fails to be or remain a Qualified Investor or make full payment of any portion of its Common Share Commitment or any other payment required hereunder when due (collectively, a "Defaulting Member"), the Company shall give such Defaulting Member written notice of its failure to be a Qualified Investor or default in payment and in the event such failure or default shall continue beyond the tenth calendar day following such notice, the Company may, in its sole discretion, take any one or more of the following actions:
(i) The Company may assist the Defaulting Member in finding a buyer for the Defaulting Member's Common Shares which buyer will assume the Defaulting Member's obligations hereunder, subject to the restrictions on transfer contained in Section 11.2 (in which case such Person shall, as a condition of purchasing such Common Shares, become a party to this Agreement and assume such Defaulting Member's obligation to make both defaulted and future Capital Contributions).
(ii) The Company may pursue and enforce all rights and remedies the Company may have against the Defaulting Member, including a lawsuit to collect the overdue amount, if applicable, with interest calculated thereon at a rate equal to the Base Rate plus six percent (6%) per annum or, if greater, the annualized rate of total return per Common Share over the prior four fiscal quarters (or since commencement of operations if less than four fiscal quarters) (but not in excess of the highest rate per annum permitted by applicable law).
(iii) The Company may offer a Defaulting Member's Common Shares to the Common Members (other than any Defaulting Member), which offer shall be made pro rata in accordance with the non-defaulting Members' respective Common Share Commitments, at a discount to the Net Asset Value of such Common Shares. The purchase price for such Common Shares will be determined in the sole discretion of a majority of the Independent Directors; provided, however, that such Defaulting Member shall receive not less than 66 2/366% of the most recently determined Net Asset Value of such Common Shares. If a non-defaulting Member elects not to purchase all of the Common Shares offered to it, such unpurchased Common Shares shall be reoffered pro rata to the non-defaulting Members who have purchased all of the Common Shares offered to them until either all of such Common Shares are acquired or no non-defaulting Member wishes to make a further investment. At the closing of such purchase (on a date and at a place designated by the Company), each purchasing Member shall, as payment in full for the Defaulting Member's Common Shares being purchased, (A) deliver a non-interest bearing, non-recourse promissory note (in a form approved by the Company) payable upon the earlier to occur of ten years after delivery of the note or liquidation of the Company, secured only by the Defaulting Member's Common Shares being purchased by such Member (excluding the portion of such Common Shares represented by contributions made by such purchaser with respect to such Common Shares), payable to the Defaulting Member in an amount equal to the purchase price of the portion of the Defaulting Member's Common Shares being purchased by such Member, and (B) assume the portion of the Defaulting Member's obligation to make both defaulted and future Capital Contributions and other payments pursuant to its Common Share Commitment and this Agreement which are commensurate with the portion of the Defaulting Member's Common Shares being purchased by such Member. Upon the closing of such purchase, each purchasing Member shall make a Capital Contribution in an aggregate amount equal to that portion of the assumed Common Share Commitment representing the defaulted Common Share Commitment, if any, Commitment of the Defaulting Member, and the balance of the assumed Common Share Commitment shall be added to such purchasing Member's Common Share Commitment for all purposes under this Agreement. The Company shall specify the procedures for making and accepting the offers contemplated by this subparagraph and shall, in its discretion, set time limits for acceptance. All Capital Contributions made by the purchasing Members shall be "Capital Contributions" made under this Agreement and Common Shares shall be issued to such Members accordingly. If all of the Defaulting Member's Common Shares are not purchased pursuant to the immediately preceding provisions, the Company may offer any remaining Common Shares to any other Person on the same terms as originally offered to the Members pursuant to such provisions, subject to the restrictions on transfer contained in Section 11.2 (in which case such Person shall, as a condition of purchasing such Common Shares, become a Member party to this Agreement and assume such Defaulting Member's obligation to make both defaulted and future Capital Contributions) or take any other action in relation to such remaining Common Shares as may be permitted pursuant to any other subparagraphs of this Section 7.1(d).
(iv) The Company may repurchase, retire and cancel such Defaulting Member's Common Shares at a discount to the Net Asset Value of such Common Shares. The consideration to be paid to such Defaulting Member upon any repurchase, retirement or cancellation of such Common Shares will be determined in the sole discretion of a majority of the Independent Directors; provided, however, that such Defaulting Member shall receive not less than 66 2/366% of the Net Asset Value of such Common Shares.
(v) The Company may offer to the Common Members (other than such Defaulting Member) for assumption by the non-defaulting Members such Defaulting Member's Common Share Commitment to make its Capital Contribution which was not made ("Defaulted Commitment"), which offer shall be made pro rata in accordance with the non-defaulting Members' respective Common Shares. If a non-defaulting Member elects not to assume the entire portion of the Defaulted Commitment offered to it, such unassumed Defaulted Commitment shall be reoffered pro rata to the non-defaulting Members who have elected to assume the entire portion of the Defaulted Commitment offered to them until either all of such Defaulted Commitment is assumed or no non-defaulting Member wishes to make a further assumption of the Defaulted Commitment. At the closing of such offer (on a date and at a place designated by the Company), each assuming Member shall make a Capital Contribution in an amount equal to that portion of the Defaulted Commitment assumed by it in accordance with the provisions of this subparagraph which is then due or past due. The Investment Manager shall specify the procedures for making and accepting the offers contemplated by this subparagraph and shall, in its discretion, set time limits for acceptance. If the entire Defaulted Commitment is not assumed pursuant to the preceding provisions, the Company may offer to any other Person for assumption any remaining portion of the Defaulted Commitment, subject to the restrictions on transfer contained in Section 11.2 (in which case such third party or parties shall become a party to this Agreement). All Capital Contributions made by the non-defaulting Members and other Persons pursuant to this subparagraph (v) shall be "Capital Contributions" made under this Agreement, and the Common Shares of each of such Members and other Persons shall be adjusted accordingly. Such Defaulting Member's Common Share Commitment shall be reduced by the aggregate amount of Defaulted Commitment, if any, Commitment assumed by the non-defaulting Members and such other Persons and for which payments have been actually received by the Company.
(vi) The Company may reduce (effective on the date of the default) the Defaulting Member's Common Share Commitment (to the extent it has not been assumed by another Member or Person) to the amount of Capital Contributions actually made by such Defaulting Member (net of distributions pursuant to Section 8.1), and the aggregate Common Share Commitment of such Defaulting Member shall be commensurately reduced; provided, however, that the Common Share Commitments of the non-defaulting Members shall not be reduced.
(vii) If the Defaulting Member is an entity formed for the purpose of investing in the Company and such Defaulting Member has failed Member's failure to make any portion of a Capital Contribution when required and such failure is caused by the failure of one or more of such Defaulting Member's investors to either (i) make an equity contribution or (ii) deliver payment in exchange for any notes issued to such investor, to such Defaulting Member, the Company may, in its sole discretion, apply the provisions of this Section 7.1(d) to such Defaulting Member's Common Shares and/or Common Share Commitments on a pro rata basis to appropriately reflect the effect of the failure of such Defaulting Member's defaulting equity investors in a manner which is equitable to such Defaulting Member's non-defaulting equity investors.
(e) No consent of any Member shall be required as a condition precedent to any transfer, assignment, assumption or other disposition of a Defaulting Member's Common Shares or Common Share Commitment, as the case may be, pursuant to Section 7.1(d). If all of the Defaulting Member's Common Shares and its Common Share Commitments are purchased in the manner set forth in Section 7.1(d), such Defaulting Member shall cease to be a Common Member in the Company and shall cease to have the power to exercise any rights or powers of a Common Member.
Appears in 1 contract
Samples: Operating Agreement (Special Value Expansion Fund, LLC)
Capital Contributions of Members. (a) Each prospective initial Common Member, to be admitted as a Member of the Company at the Initial Drawdown Date, must deliver to the Investment Manager a completed, executed Subscription Agreement, which must be satisfactory to the Company and the Investment Manager, and in which, among other things, such prospective Common Member represents that it is an "accredited investor" as defined in Rule 501(a) under the Securities Act, Act and a "qualified client" within the meaning under of Rule 205-3 of the Advisers Act and a "qualified purchaser" under Section 2(a)(51)(A) of the Investment Company Act and the regulations promulgated thereunder (an accredited investor, qualified client and qualified purchaser, collectively a "Qualified Investor")Act. The minimum Common Share Commitment to which a Common Member may subscribe shall be $10,000,000; provided, however, that the Investment Manager may, in its sole and absolute discretion, waive this requirement. On the Initial Drawdown Date, each initial prospective Common Member shall contribute to the Company 5020% of its Common Share Commitment or such other proportion as the Board of Directors shall have determined. On the date of original issuance of each series of Preferred Shares, each Person who is admitted as a Member holding Preferred Shares of such series in accordance with the applicable Statement of Preferences shall, in connection therewith, contribute to the Company an amount in cash equal to the purchase price for such Preferred Shares.
(b) Subsequent to the Initial Drawdown Date, the Company will draw down Common Share Commitments on up to two additional multiple Drawdown Dates (each, a "Subsequent Drawdown Date") during the Subscription Period). On each Subsequent Drawdown Date, the Company will issue Common Shares at Net Asset Value per Common Share as calculated withinwithin 48 hours prior to issuance (exclusive of Sundays and holidays) in an aggregate amount equal to the percentage of the Common Share Commitments drawn down.
(c) Unfunded Commitments may be called by the Company at any time during the Subscription Period in any amount on not less than 15 days prior written notice to the Common Members; provided, however, that (i) all Capital Contributions for Common Shares shall be on a pro rata basis in proportion to each Common Member's respective Unfunded Commitment, (ii) the aggregate amount of Capital Contributions required on each Subsequent Drawdown Date shall be at least 2510% of the aggregate Common Share Commitments (or, with respect to the last Subsequent Drawdown Date, any amount left undrawn), and (iii) all calls for Capital Contributions shall be made so that they are required to be funded on or prior to the end of the Subscription Period.
(d) If any Common Member fails to be or remain a Qualified Investor or make full payment of any portion of its Common Share Commitment or any other payment required hereunder when due (collectively, a "Defaulting Member"), the Company shall give such Defaulting Member written notice of its failure to be a Qualified Investor or default in payment and in the event such failure or default shall continue beyond the tenth calendar day following such notice, the Company may, in its sole discretion, take any one or more of the following actions:
(i) The Company may assist the Defaulting Member in finding a buyer for the Defaulting Member's Common Shares which buyer will assume the Defaulting Member's obligations hereunder, subject to the restrictions on transfer contained in Section 11.2 (in which case such Person shall, as a condition of purchasing such Common Shares, become a party to this Agreement and assume such Defaulting Member's obligation to make both defaulted and future Capital Contributions).
(ii) The Company may pursue and enforce all rights and remedies the Company may have against the Defaulting Member, including a lawsuit to collect the overdue amount, if applicable, with interest calculated thereon at a rate equal to the Base Rate plus six percent (6%) per annum or, if greater, the annualized rate of total return per Common Share over the prior four fiscal quarters (or since commencement of operations if less than four fiscal quarters) (but not in excess of the highest rate per annum permitted by applicable law).
(iii) The Company may offer a Defaulting Member's Common Shares to the Common Members (other than any Defaulting Member), which offer shall be made pro rata in accordance with the non-defaulting Members' respective Common Share Commitments, at a discount to the Net Asset Value of such Common Shares. The purchase price for such Common Shares will be determined in the sole discretion of a majority of the Independent Directors; provided, however, that such Defaulting Member shall receive not less than 66 2/366% of the most recently determined Net Asset Value of such Common Shares. If a non-defaulting Member elects not to purchase all of the Common Shares offered to it, such unpurchased Common Shares shall be reoffered pro rata to the non-defaulting Members who have purchased all of the Common Shares offered to them until either all of such Common Shares are acquired or no non-defaulting Member wishes to make a further investment. At the closing of such purchase (on a date and at a place designated by the Company), each purchasing Member shall, as payment in full for the Defaulting Member's Common Shares being purchased, (A) deliver a non-interest bearing, non-recourse promissory note (in a form approved by the Company) payable upon the earlier to occur of ten years after delivery of the note or liquidation of the Company, secured only by the Defaulting Member's Common Shares being purchased by such Member (excluding the portion of such Common Shares represented by contributions made by such purchaser with respect to such Common Shares), payable to the Defaulting Member in an amount equal to the purchase price of the portion of the Defaulting Member's Common Shares being purchased by such Member, and (B) assume the portion of the Defaulting Member's obligation to make both defaulted and future Capital Contributions and other payments pursuant to its Common Share Commitment and this Agreement which are commensurate with the portion of the Defaulting Member's Common Shares being purchased by such Member. Upon the closing of such purchase, each purchasing Member shall make a Capital Contribution in an aggregate amount equal to that portion of the assumed Common Share Commitment representing the defaulted Common Share Commitment, if any, Commitment of the Defaulting Member, and the balance of the assumed Common Share Commitment shall be added to such purchasing Member's Common Share Commitment for all purposes under this Agreement. The Company shall specify the procedures for making and accepting the offers contemplated by this subparagraph and shall, in its discretion, set time limits for acceptance. All Capital Contributions made by the purchasing Members shall be "Capital Contributions" made under this Agreement and Common Shares shall be issued to such Members accordingly. If all of the Defaulting Member's Common Shares are not purchased pursuant to the immediately preceding provisions, the Company may offer any remaining Common Shares to any other Person on the same terms as originally offered to the Members pursuant to such provisions, subject to the restrictions on transfer contained in Section 11.2 (in which case such Person shall, as a condition of purchasing such Common Shares, become a Member party to this Agreement and assume such Defaulting Member's obligation to make both defaulted and future Capital Contributions) or take any other action in relation to such remaining Common Shares as may be permitted pursuant to any other subparagraphs of this Section 7.1(d).
(iv) The Company may repurchase, retire and cancel such Defaulting Member's Common Shares at a discount to the Net Asset Value of such Common Shares. The consideration to be paid to such Defaulting Member upon any repurchase, retirement or cancellation of such Common Shares will be determined in the sole discretion of a majority of the Independent Directors; provided, however, that such Defaulting Member shall receive not less than 66 2/366% of the Net Asset Value of such Common Shares.
(v) The Company may offer to the Common Members (other than such Defaulting Member) for assumption by the non-defaulting Members such Defaulting Member's Common Share Commitment to make its Capital Contribution which was not made ("Defaulted Commitment"), which offer shall be made pro rata in accordance with the non-defaulting Members' respective Common Shares. If a non-defaulting Member elects not to assume the entire portion of the Defaulted Commitment offered to it, such unassumed Defaulted Commitment shall be reoffered pro rata to the non-defaulting Members who have elected to assume the entire portion of the Defaulted Commitment offered to them until either all of such Defaulted Commitment is assumed or no non-defaulting Member wishes to make a further assumption of the Defaulted Commitment. At the closing of such offer (on a date and at a place designated by the Company), each assuming Member shall make a Capital Contribution in an amount equal to that portion of the Defaulted Commitment assumed by it in accordance with the provisions of this subparagraph which is then due or past due. The Investment Manager shall specify the procedures for making and accepting the offers contemplated by this subparagraph and shall, in its discretion, set time limits for acceptance. If the entire Defaulted Commitment is not assumed pursuant to the preceding provisions, the Company may offer to any other Person for assumption any remaining portion of the Defaulted Commitment, subject to the restrictions on transfer contained in Section 11.2 (in which case such third party or parties shall become a party to this Agreement). All Capital Contributions made by the non-defaulting Members and other Persons pursuant to this subparagraph (v) shall be "Capital Contributions" made under this Agreement, and the Common Shares of each of such Members and other Persons shall be adjusted accordingly. Such Defaulting Member's Common Share Commitment shall be reduced by the aggregate amount of Defaulted Commitment, if any, Commitment assumed by the non-defaulting Members and such other Persons and for which payments have been actually received by the Company.
(vi) The Company may reduce (effective on the date of the default) the Defaulting Member's Common Share Commitment (to the extent it has not been assumed by another Member or Person) to the amount of Capital Contributions actually made by such Defaulting Member (net of distributions pursuant to Section 8.1), and the aggregate Common Share Commitment of such Defaulting Member shall be commensurately reduced; provided, however, that the Common Share Commitments of the non-defaulting Members shall not be reduced.
(vii) If the Defaulting Member is an entity formed for the purpose of investing in the Company and such Defaulting Member has failed Member's failure to make any portion of a Capital Contribution when required and such failure is caused by the failure of one or more of such Defaulting Member's investors to either (i) make an equity contribution or (ii) deliver payment in exchange for any notes issued to such investor, to such Defaulting Member, the Company may, in its sole discretion, apply the provisions of this Section 7.1(d) to such Defaulting Member's Common Shares and/or Common Share Commitments on a pro rata basis to appropriately reflect the effect of the failure of such Defaulting Member's defaulting equity investors in a manner which is equitable to such Defaulting Member's non-defaulting equity investors.
(e) No consent of any Member shall be required as a condition precedent to any transfer, assignment, assumption or other disposition of a Defaulting Member's Common Shares or Common Share Commitment, as the case may be, pursuant to Section 7.1(d). If all of the Defaulting Member's Common Shares and its Common Share Commitments are purchased in the manner set forth in Section 7.1(d), such Defaulting Member shall cease to be a Common Member in the Company and shall cease to have the power to exercise any rights or powers of a Common Member.
Appears in 1 contract
Samples: Operating Agreement (Special Value Opportunities Fund LLC)
