Default by a Member Clause Samples
The 'Default by a Member' clause defines the consequences and procedures that apply when a member of an agreement fails to fulfill their obligations. Typically, this clause outlines what constitutes a default, such as missed payments or failure to perform required duties, and describes the steps the non-defaulting parties may take, such as issuing notices, imposing penalties, or initiating termination. Its core function is to provide a clear framework for addressing breaches, thereby protecting the interests of all parties and ensuring predictable remedies in the event of non-compliance.
Default by a Member. If for any reason one or more Members of the Underwriting Group shall fail or refuse (otherwise than for a reason sufficient to justify the termination of this Agreement under the provisions of Section 9 hereof) to purchase and pay for the number of Shares agreed to be purchased by such Member, the Company shall immediately give notice thereof to the Representative, and the non-defaulting Members shall have the right within 24 hours after the receipt by the Representative of such notice, to purchase or procure one or more other Members to purchase, in such proportions as may be agreed upon among the Representative and such purchasing Member or Members and upon the terms herein set forth, the Shares which such defaulting Member or Members agreed to purchase. If the non-defaulting Members fail so to make such arrangements with respect to all such Shares, the number of Shares which each non-defaulting Member is otherwise obligated to purchase under the Agreement shall be automatically increased pro rata to absorb the remaining Shares which the defaulting Member or Members agreed to purchase; provided, however, that the non-defaulting Members shall not be obligated to purchase the Shares which the defaulting Member or Members agreed to purchase in excess of 10% of the total number of Shares which such non-defaulting Member agreed to purchase hereunder, and provided further that the non-defaulting Members shall not be obligated to purchase any Shares which the defaulting Member or Members agreed to purchase if such additional purchase would cause the Member to be in violation of the net capital rule of the Commission or other applicable law. If the total number of Shares which the defaulting Member or Members agreed to purchase shall not be purchased or absorbed in accordance with the two preceding sentences, the Company shall have the right, within 24 hours next succeeding the 24-hour period above referred to, to make arrangements with other underwriters or purchasers satisfactory to the Representative for the purchase of such Shares on the terms herein set forth. In any such case, either the Representative or the Company shall have the right to postpone the Closing determined as provided in Section 3.2.2 hereof for not more than seven business days after the date originally fixed as the Closing pursuant to said Subsection 3.2.2 in order that any necessary changes in the Registration Statement, the Prospectus or any other documents or arrangements may be made....
Default by a Member. If for any reason one or more Members shall fail or refuse (otherwise than for a reason sufficient to justify the termination of this Agreement under the provisions of Section 10 hereof) to purchase and pay for the number of Shares agreed to be purchased by such Member, the Company shall immediately give notice thereof to the Representative, and the non-defaulting Members shall have the right within twenty-four (24) hours after the receipt by the Representative of such notice, to purchase or procure one or more other Members to purchase, in such proportions as may be agreed upon between the Representative and such purchasing Member or Members, and upon the terms herein set forth, the Shares which such defaulting Member or Members agreed to purchase. If the non- defaulting Members fail to make such arrangements with respect to all such Shares, the number of Shares which each non-defaulting Member is otherwise obligated to purchase under the Agreement shall be automatically increased pro rata to absorb the remaining Shares which the defaulting Member or Members agreed to purchase; provided, however, that the non-defaulting Members shall not be obligated to purchase the Shares which the defaulting Member or Members agreed to purchase if the aggregate number of such Shares exceeds ten percent (10%) of the total number of Shares which all Members agreed to purchase hereunder. If the total number of Nothing contained in this Section 4.2 shall relieve any defaulting Member of its liability, if any, to the Company or to the remaining Members for damages occasioned by its default hereunder.
Default by a Member. (a) The occurrence of any of the following events will constitute an event of default and the Member so defaulting (the “Defaulting Member”) will (except as otherwise provided in clause (iv) of this Section 6.5(a)) thereafter be deemed to be in default without any further action whatsoever on the part of the Company or the other Member: (i) the attempted dissolution of the Company by the Member other than pursuant to the provisions of this Agreement, (ii) the bankruptcy or insolvency of a Member, (iii) an Event of Withdrawal with respect to a Member, but not if such Event of Withdrawal is described in clause (ii) or (iv) of Section 8.1(a), or (iv) a material violation or breach of any of the terms or provisions of this Agreement by a Member, provided, however, that a Member will not be deemed to be in default under this clause (iv) until that Member has failed to cure the default during the 30-day period following the receipt of notice of such default, except that if the default is a non monetary default and cannot reasonably and with due diligence and in good faith be cured within such 30-day period, and if the Defaulting Member immediately commences and proceeds to complete the cure of such default with due diligence and in good faith, the 30-day period with respect to such default shall be extended to include such additional period of time as may be reasonably necessary to cure such default, not to exceed 90 days.
(b) Any provision of this Agreement to the contrary notwithstanding, on the date that a Member becomes a Defaulting Member, that Member will not have any voting rights with respect to any matters set forth in this Agreement, but only so long as the default continues and is not cured by the Defaulting Member or waived by the other Member.
(c) Upon an event of default by a Member, (i) the non-Defaulting Member will have the right to dissolve the Company and (ii) the Company and the non-Defaulting Member will have all rights and remedies available at law and in equity and may institute legal proceedings against the Defaulting Member with respect to any damages or losses incurred by the Company or by the non-Defaulting Member. The Company and the non- Defaulting Member will be entitled to reasonable attorneys’ fees and expenses incurred in connection with any action brought against a Defaulting Member pursuant to this Agreement.
Default by a Member. In the event a Non-Managing Member defaults in making its portion of any Additional Capital Contribution by the last day specified in the Call (the “Default Date”), the unpaid amount being herein called the “Contribution Deficiency,” then such Non-Managing Member shall be deemed a “Non-Contributing Member.” U.S. Manager shall notify the non-defaulting Non-Managing Member within five (5) days after the Default Date and the non-defaulting Non-Managing Member (the “Contributing Member”) shall have the right, but not the obligation, to make a loan to the Non-Contributing Member up to the amount of the Contribution Deficiency bearing interest at a rate equal to the lesser of (i) the “prime” or “base” rate of interest of commercial lending announced from time to time by Bank of America, plus 5% per annum or (ii) the maximum rate permitted by applicable law. The Contributing Member may pay the amount of such loan directly to the Company, and from and after the date of such loan all distributions by the Company to the Non-Contributing Member shall be paid by the Company to the Contributing Member and applied first to accrued but unpaid interest and then principal on such loan. The loan (together with reasonable attorney’s fees and expenses incurred by the Contributing Member in enforcing the loan) shall be secured by the entire Membership Interest of the Non-Contributing Member under the Uniform Commercial Code of the State of Delaware, and the Contributing Member shall have all the rights and remedies of a secured party thereunder. The Non-Contributing Member (i) hereby appoints the Contributing Member as its attorney-in-fact for the purpose of signing and filing any financing statements to perfect the Contributing Member’s security interest and (ii) agrees to take such other actions as may reasonably be required to perfect or enforce such security interest.
Default by a Member