Defaulting Limited Partners Sample Clauses
The Defaulting Limited Partners clause defines the consequences and procedures that apply when a limited partner fails to meet its financial or other obligations under a partnership agreement. Typically, this clause outlines steps such as issuing a notice of default, imposing penalties like loss of voting rights or reduction of partnership interest, and potentially allowing the non-defaulting partners to purchase the defaulting partner's interest. Its core function is to protect the partnership from disruptions caused by non-compliant partners and to ensure that all partners fulfill their commitments, thereby maintaining the financial stability and operational integrity of the partnership.
Defaulting Limited Partners. (a) If at any time a Partner shall fail to make a required Capital Contribution to the Partnership when due under a Funding Notice (a “Defaulting Limited Partner”), a Majority Vote of Tier One Parallel Investment Vehicles, acting under the Voting Agreement, may subject such Defaulting Limited Partner to certain adverse consequences, including, but not limited to: (i) interest accruing on the amount of such default and any costs of collection associated therewith commencing on the date such Capital Contribution was due at the lesser of (A) the rate of twenty percent (20%) per annum and (B) the maximum rate permitted by applicable law (such default amount, together with any associated collection costs, including legal fees and expenses, plus any other liability or obligation incurred by the Partnership in connection with such default (but specifically excluding punitive and consequential damages) plus interest being the “Default Amount”); and (ii) causing distributions that would otherwise be made to the Defaulting Limited Partner to be credited against the Default Amount in a manner to be determined pursuant to the Voting Agreement (which such determination shall be based on the determination of a Majority Vote of Tier One Parallel Investment Vehicles). In addition, while any of the Default Amount remains outstanding, the Defaulting Limited Partner shall forfeit its right to vote on matters on which such Defaulting Limited Partner would otherwise be entitled to vote and if the Partnership is a Tier One Parallel Investment Vehicle, the Partnership shall forfeit such portion of its right to vote under the Voting Agreement attributable to such Defaulting Limited Partner’s Consortium Percentage Interest.
(b) If a Defaulting Limited Partner shall fail to make a required Capital Contribution as and when due and, except in the case of a Capital Contribution called in connection with the consummation of the transactions contemplated by the Restructuring Proposal, such failure continues for a period of three (3) Business Days following notice of such default, the Tier One Parallel Investment Vehicles (acting in accordance with the Voting Agreement) also shall be entitled, but not required, to (i) reduce the Defaulting Limited Partner’s Capital Account without taking into account any increase or decrease in the value of the Partnership, in an amount up to fifty percent (50%) of the Capital Account of such Defaulting Limited Partner, which amount (A) shall be allocate...
Defaulting Limited Partners. Termination of Employment (other than Tier 1 Limited Partners)..................................14 5.5 Termination of a Tier 1 Limited Partner.........................................................16 5.6 Special Consequences of Termination of Any Profits Limited Partner..............................17 5.7
Defaulting Limited Partners. In the event a Limited Partner shall be in default of his Investor Note or the Pledge and Security Agreement entered into in connection therewith and, as a result of such default, the holder of such Investor Note shall foreclose upon the Limited Partner's Limited Partnership interest in the Partnership or if such interest is sold pursuant to the power of sale contained in the Pledge and Security Agreement, the Holder of such Investor Note may itself (or its agent or designee) (the "Purchaser"), at its election, become a Substituted Limited Partner upon such foreclosure. In the event of a foreclosure or sale pursuant to the Pledge and Security Agreement of the defaulting Limited Partner's Partnership Interest, as provided above, the Purchaser shall become a Substituted Limited Partner with all of the rights and obligations thereof. Each Substituted Limited Partner hereby constitutes and appoints the General Partner, and each officer of the General Partner, with full power of substitution, such Substituted Limited Partner's agent and attorney-in-fact for the purpose of executing and delivering any and all such documents necessary to convey the Interest of such Substituted Limited Partner, if such Substituted Limited Partner shall become a Defaulting Limited Partner, to the Purchaser pursuant to this paragraph, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, dissolution or incapacity of such Substituted Limited Partner.