Common use of Failure to Make Additional Capital Contributions Clause in Contracts

Failure to Make Additional Capital Contributions. In the event that there is a Defaulting Member, the Non-defaulting Member may, in addition to any other remedy available at law or in equity, elect by twenty (20) days written notice to the Defaulting Member either (i) not to make the Additional Capital Contribution otherwise required to be made by such Non-defaulting Member, in which case neither of the Class A Members shall be deemed to be a Defaulting Member, or (ii) to make the Additional Capital Contribution otherwise required to be made by such Non- defaulting Member and to advance the Default Amount to the Company, with the following results: (i) the sum advanced constitutes a loan from the Non-defaulting Member to the Defaulting Member and a Capital Contribution of that sum to the Company by the Defaulting Member pursuant to the applicable provisions of this Agreement; (ii) the principal balance of the loan and all accrued unpaid interest thereon is due and payable in whole on the tenth day after written demand therefor by the Non-defaulting Member to the Defaulting Member; (iii) the amount lent bears interest at a rate equal to twelve percent (12%) per annum, compounded annually from the Day that the advance is deemed made until the date that the loan, together with all interest accrued on it, is repaid to the Non-defaulting Member; (iv) all distributions from the Company that otherwise would be made to the Defaulting Member (whether before or after dissolution of the Company) instead shall be paid to the Non-defaulting Member until the loan and all interest accrued on it have been paid in full to the Non-defaulting Member (with payments being applied first to accrued and unpaid interest and then to principal), and (v) the Non-defaulting Member has the right, in addition to the other rights and remedies granted to it pursuant to this Agreement or available to it at Law or in equity, to take any action (including court proceedings) that the Non-defaulting Member may deem appropriate to obtain payment by the Defaulting Member of the loan and all accrued and unpaid interest on it, at the cost and expense of the Defaulting Member.

Failure to Make Additional Capital Contributions. In If a Member (a “Non-Contributing Member”) fails to pay its proportionate share of an Additional Capital Contribution to the event that there is a Defaulting MemberCompany on the due date for such payment (the “Due Date”), the CEO shall deliver to all Members written notice of the Non-defaulting Member may, in addition to any other remedy available at law or in equity, elect by twenty Contributing Member’s default (20) days written notice to the Defaulting Member either (i) not to make “Deficiency Notice”). The Deficiency Notice shall specify the portion of the Additional Capital Contribution otherwise required to be made by such which the Non-defaulting MemberContributing Member failed to make and the date on or before which such funds are finally required by the Company, in which case neither date shall not be earlier than five (5) days after the date of the Class A Members shall be deemed Deficiency Notice (the “Final Payment Date”). (a) If the Additional Capital Contributions are required primarily to be enable the Company to initiate a Defaulting Membernew project, transaction or other venture or acquire a business or portion thereof (iiin each case, which is or is intended to be, operated by the Company as a distinct, stand alone business the profits and losses of which are capable of being segregated from the profit and losses of the other businesses of the Company) to make (the “New Targeted Business”), and the Non-Contributing Member has not contributed the full amount of its proportionate share of the Additional Capital Contribution otherwise required to be made paid by such Non- defaulting Member and to advance the Default Amount to the CompanyFinal Payment Date, with the following resultsthen: (i) the sum advanced constitutes Members who are not Non-Contributing Members (the “Other Members”) acting alone by the affirmative vote of a loan from majority of such Other Members shall elect whether the Company shall initiate, acquire or operate the New Targeted Business; and if the Other Members elect to initiate, acquire or operate the New Targeted Business, such Other Members shall: (A) contribute the balance of the Capital Contributions so required pro rata in accordance with each Other Member’s Sharing Ratio relative to each other or such other proportion as they may agree upon; and (B) indemnify and hold harmless the Non-defaulting Contributing Member from any loss, liability, damage or other obligation (“Liabilities”) incurred by such Non-Contributing Member which (1) relate solely to, or result solely from, the operation of the New Targeted Business and (2) which are incurred solely by virtue of being a Member of the Company. With respect to claims made by a Non-Contributing Member against the Defaulting Other Members, the foregoing indemnity shall cover only direct damages or other Liabilities which may be incurred by the Non-Contributing Member and shall not include, and the Other Members shall not be obligated to indemnify or hold harmless the Non-Contributing Member for, any claim made by a Capital Contribution of Non-Contributing Member against the Other Members for special, incidental, indirect, punitive or consequential damages or other Liabilities, or damages or other Liabilities for lost revenue or lost profits, whether foreseeable or not (collectively, “Special Damages”). The foregoing indemnity shall cover both direct damages and Special Damages with respect to claims made by a third party against Non-Contributing Members that sum to the Company are otherwise covered by the Defaulting Member pursuant to the applicable provisions of this Agreement;such indemnity. (ii) the principal balance any portion of the loan and all accrued unpaid interest thereon is due and payable in whole on the tenth day after written demand therefor Additional Capital Contribution paid by the Non-defaulting Contributing Member shall be returned to the Defaulting Membersuch Non-Contributing Members without interest; (iii) Notwithstanding anything herein or in the amount lent bears interest at a rate equal to twelve percent (12%) per annum, compounded annually from the Day that the advance is deemed made until the date that the loan, together with all interest accrued on it, is repaid Joint Venture Agreement to the Non-defaulting Member;contrary: (iv) all distributions from the Company that otherwise would be made to the Defaulting Member (whether before or after dissolution of the Company) instead shall be paid to the Non-defaulting Member until the loan and all interest accrued on it have been paid in full to the Non-defaulting Member (with payments being applied first to accrued and unpaid interest and then to principal), and (vA) the Non-defaulting Member has the rightContributing Members shall not be entitled to any Profits, in addition Losses, Distributable Cash or other assets or benefits of any kind from such New Targeted Business, and shall be deemed to the other rights and remedies granted have a zero (0%) percent Project Sharing Ratio with respect to it pursuant to this Agreement or available to it at Law or in equity, to take any action such New Targeted Business; and (including court proceedingsB) that the Non-defaulting Contributing Members and their respective representatives on the Board shall have no voting or other rights with respect to matters relating to the ownership or operation of, or otherwise relating to, such New Targeted Business which do not (1) directly and adversely affect the Fair Grounds Project or any other Project in which such Member may deem appropriate has a Project Sharing Ratio that is 20% or more or (2) impose directly any obligation on any Non-Contributing Member (after giving effect to obtain payment the provisions of Section 6.4(a)(i)). Each Member understands, acknowledges and agrees that the foregoing shall act as a waiver of its rights under Section 10.3 of this Agreement and Schedule 2 of the Joint Venture Agreement, to the extent necessary to a effectuate the foregoing. The “Fair Grounds Project” shall mean the development and promotion of the Fair Grounds Technology by the Defaulting Member of the loan and all accrued and unpaid interest on it, at the cost and expense of the Defaulting MemberCompany.

Failure to Make Additional Capital Contributions. In (a) If a Partner fails or elects not to make any additional capital contribution requested pursuant to Section 2.2 (a “Non-Contributing Partner”), then the event that there is General Partner shall send a Defaulting Member, notice (the “Non-Funding Notice”) to all Partners identifying the Non-defaulting Member mayContributing Partner, and setting forth the amount of the additional capital contribution that such Non-Contributing Partner failed or elected not to make (the “Non-Contributed Amount”). If a Non-Contributing Partner fails to make the additional capital contribution to the Partnership within five business days after the provision of a Non-Funding Notice to all Partners, then the Partners that made their optional additional capital contributions to the Partnership (the “Contributing Partners”), in addition their sole and absolute discretion, may elect to any other remedy available at law make additional capital contributions to the Partnership in an amount up to the Non-Contributed Amount in the place and stead of the Non-Contributing Partner, with each Contributing Partner having the right to contribute up to its pro rata share of the Non-Contributed Amount based on the ratio that its Back-End Percentage Interest bears to the aggregate Back-End Percentage Interests of all Contributing Partners or in equitysuch other percentage as the Contributing Partners holding a majority of all Back-End Percentage Interests held by all Contributing Partners shall agree (provided that if a Partner is an affiliate of another Partner, elect then neither such Partner shall be treated as a Contributing Partner unless each such Partner contributes its pro rata share of the optional additional capital contribution). In the case of any non-pro rata contributions by twenty the Partners (20) days written notice to i.e., other than in accordance with Back- End Percentage Interests), the Defaulting Member amounts so contributed shall be treated as either (i) not loans to make the Additional Capital Contribution otherwise required Partnership to be evidenced by one or more non-negotiable demand promissory notes bearing interest at the rate of 14% per annum and requiring prepayment of principal and interest out of any available Distributable Cash prior to any distributions of Distributable Cash being made by such Non-defaulting Member, in which case neither of to the Class A Members shall be deemed to be a Defaulting MemberPartners, or (ii) to make if all of the Additional Capital Contribution otherwise Contributing Partners agree in writing within 60 days after making such contributions, as additional capital contributions, in which event the Back-End Percentage Interests of the Partners shall be adjusted as provided in Section 2.4(b). (b) If the Back-End Percentage Interests of the Partners are required to be made adjusted as provided in Section 2.4(a), then the Back-End Percentage Interests of each Non-Contributing Partner shall be reduced by such Non- defaulting Member and to advance the Default Amount to the Company, with the following results: quotient (expressed as a percentage) of: (i) the sum advanced constitutes a loan from the Non-defaulting Member to the Defaulting Member and a Capital Contribution of that sum to the Company Contributed Amount; divided by the Defaulting Member pursuant to the applicable provisions of this Agreement; (ii) the principal balance sum of the loan and aggregate capital contributions made to the Partnership by all accrued unpaid interest thereon is due and payable in whole on Partners from the tenth day after written demand therefor Effective Date through the applicable date of determination. The Back-End Percentage Interest of each Contributing Partner shall be increased by its proportionate share of the amount that the Back-End Percentage Interest of the Non-defaulting Member Contributing Partner is reduced (determined based upon the ratio that the portion of Non-Contributed Amount paid by such Partner bears to the Defaulting Member; (iii) aggregate portion of the Non-Contributed Amount paid by all Partners). Further, if the Back-End Percentage Interests of the Partners are required to be adjusted as provided in Section 2.4(a), then the amount lent bears interest at a rate equal of any additional capital contributions to twelve percent the Partnership in (12%1) per annum, compounded annually from the Day that the advance is deemed made until the date that the loan, together with all interest accrued on it, is repaid an amount up to the Non-defaulting Member; Contributed Amount made by a Contributing Partner or (iv2) all distributions from the Company that otherwise would be made in an amount up to the Defaulting Member amount of any non-pro rata contributions by the Partners (whether before or after dissolution i.e., other than in accordance with Back-End Percentage Interests) made by a Contributing Partner shall, in either case, increase the Undistributed First Priority Capital of the Companyeach such Contributing Partner. For illustration purposes only, assume that: (A) instead shall be paid to the Non-defaulting Member until the loan and all interest accrued on it have been paid in full to the Non-defaulting Member an additional capital contribution was requested; (with payments being applied first to accrued and unpaid interest and then to principal), and (vB) the Non-defaulting Member has Contributing Partner’s Back-End Percentage Interest is 50%; (C) the right, in addition to the other rights and remedies granted to it pursuant to this Agreement or available to it at Law or in equity, to take any action Contributing Partner’s Back-End Percentage Interest is 50%; (including court proceedingsD) that the Non-defaulting Member may deem appropriate Contributed Amount is $1,000,000; and (E) the sum of the aggregate capital contributions made to obtain payment the Partnership by the Defaulting Member Partners from the Effective Date through the applicable date of determination equals $10,000,000. Under these circumstances, the loan Non-Contributing Partner’s Back-End Percentage Interest would decrease from 50% to 40% (50% minus the quotient (expressed as a percentage) of: (1) $1,000,000; divided by (2) $10,000,000); and all accrued and unpaid interest on it, at the cost and expense of the Defaulting MemberContributing Partner’s Back-End Percentage Interest would increase from 50% to 60%. (c) THE PARTNERS ACKNOWLEDGE AND AGREE THAT THE PARTNERSHIP INTEREST OF A NON-CONTRIBUTING PARTNER MAY BE SUBSTANTIALLY DILUTED FOR FAILING (OR ELECTING NOT) TO MAKE CAPITAL CONTRIBUTIONS UNDER SECTION 2.2.

Failure to Make Additional Capital Contributions. (a) In the event that there any Partner fails to pay any amount (the "Amount Due") which it is a Defaulting Member, the Non-defaulting Member may, in addition required to any other remedy available at law or in equity, elect by twenty (20) days written notice pay to the Defaulting Member either Partnership on or before the datc (ithe "Due Date") not to make the Additional Capital Contribution otherwise required to be made by when such Non-defaulting Memberamount is due and payable, in which case neither of the Class A Members it shall be deemed to be in default hereunder (a "Defaulting MemberPartner") and a notice of default shall be given to it. (b) In the event that any Partner fails to pay any Amount Due by the relevant Due Date, such Amount Due shall bear interest at the Prime Rate plus two percent (2%) (or the highest rate permitted by applicable law, ifless) on the Amount Due from the relevant Due Date until the earlier of (i) the date on which such payment is received by the Partnership or (ii) the date of the exercise by the General Partner of the option set forth in Section 8.2(c) provided, that the General Partner, in its sole discretion, may elect to make the Additional Capital Contribution otherwise required to be made waive such interest if it determines that such failure by such Non- defaulting Member Partner to timely pay the Amount Due was an isolated occurrence unlikely to recur. Any distributions to which such Partner is entitled shall be reduced by the amount of such interest, and to advance the Default Amount such amount shall be allocated, Pro Rata to the Company, with the following results:Partners. (ic) Without limiting the sum advanced constitutes a loan from Partnership's rights against the Defaulting Partner, if the full amount of such payment is not received by the Partnership within forty-five (45) days after the delivery of such notice, as liquidated and agreed upon current damages for such default (it being agreed that it would be difficult or impossible to fix the actual damages), the Partnership shall have the option, exercisable by the General Partner, to purchase the Defaulting Partner's interest in the Partnership for One Hundred Dollars ($100) and offer the Defaulting Partner's interest in the Partnership and the balance ofthe Defaulting Partner's Unfunded Subscriptions first to the Partners other than the Defaulting Partner (the "Non-defaulting Member Defaulting Partners"), Pro Rata to the Defaulting Member Partners, and a Capital Contribution of that sum then to the Company other offerees on such terms as determined by the Defaulting Member pursuant to the applicable provisions of this Agreement; (ii) the principal balance of the loan and all accrued unpaid interest thereon is due and payable General Partner in whole on the tenth day after written demand therefor by the Non-defaulting Member to the Defaulting Member; (iii) the amount lent bears interest at a rate equal to twelve percent (12%) per annumits discretion; provided, compounded annually from the Day however, that the advance is deemed made until the date that the loan, together with all interest accrued offer to other offerees shall not be on it, is repaid terms more favorable than those offered to the Non-defaulting Member; (iv) all distributions from the Company that otherwise would be made to the Defaulting Member (whether before or after dissolution Partners. Proceeds of the Company) instead sale of the interest, net of expenses related to such sale, shall be paid distributed to the Non-defaulting Member until Defaulting Partners, Pro Rata to the loan and all interest accrued on it have been paid in full Partners. If such proceeds are distributed to the Non-defaulting Member Defaulting Partners, appropriate adjustments shall be made in determining the amount of the Priority Paymentto account for the return of such Non-Defaulting Partner's Capital Contributions. To the extent the Defaulting Partner's interest in the Partnership is not sold pursuant to the foregoing, the Partnership shall have the right, exercisable by the General Partner, to purchase the Defaulting Partner's interest in the Partnership for One Hundred Dollars (with payments being applied first to accrued and unpaid $ J 00) and, for no separate consideration, apportion that interest and then to principal), and (v) among the Non-defaulting Member has the rightDefaulting Partners, in addition Pro Rata to the other rights and remedies granted to it pursuant to this Agreement or available to it at Law or in equity, to take any action (including court proceedings) that the Non-defaulting Member may deem appropriate to obtain payment by the Defaulting Member of the loan and all accrued and unpaid interest on it, at the cost and expense Partners. Any remaining balance of the Defaulting MemberPartner's Unfunded Subscription may be assumed by the General Partner (or its designee) in its sole discretion. (d) Notwithstanding anything to the contrary set forth in this Agreement, (I) any Defaulting Partner that does not make full payment to the Partnership of all amounts due and payable to the Partnership on or before the date that is forty-five (45) days after notice of a default was mailed to such Partner as provided in Section 8.2(a) shall not receive any distributions from the Partnership; and (2) any distributions that otherwise wonld be made to a Defaulting Partner during such forty-five (45) day period shall be made to such Defaulting Partner at the end of such forty-five (45) day period if, before the end of such period, the Defaulting Partner has paid to the Partnership all amounts then due and payable. (e) The application of the aforesaid liquidated damages provision shall not relieve any Defaulting Partner of such Partner's obligation to make all subsequent Additional Capital Contributions when due unless the General Partner, in its sole discretion, exercises its rights under Section 8.2( c).