Failure to Make Contributions. 11.1 Pre-ability to water down (a) The non-defaulting Shareholder shall have the right but not the obligation to advance or cause to be advanced to the Company the defaulted contribution on behalf of the defaulting Shareholder and treat the same, together with any accrued interest, as a demand loan to the defaulting Shareholder (a “Default Loan”) bearing interest from the date of the advance until paid at the Effective Interest Rate plus an additional two percent, but in no event at a rate higher than the maximum rate permitted by Law. The failure to repay a Default Loan upon demand shall be a default. Failure to timely repay any Default Loan shall entitle the other Shareholder to enforce the security for the loan and to exercise the rights provided in Section 11.1(b). Each Shareholder hereby grants to the other a lien upon its Ownership Interest, the Assets and a pledge of and security interest in its Ownership Interest to secure any Default Loan made hereunder, including interest thereon, reasonable attorneys fees and all other reasonable costs and expenses incurred in recovering the loan with interest and in enforcing such lien, pledge, or security interest, or both. (b) The non-defaulting Shareholder may elect, by Notice to the defaulting (c) Shareholder at any time within 15 days after expiration of the 15 day cure period provided in this Section 11.1, or on failure to repay a Default Loan on demand to have all of the Ownership Interest owned by the defaulting Shareholder exchanged for the Net Smelter Returns Royalty, determined as provided in Schedule C, upon which transfer and exchange the defaulting Shareholder shall have no Ownership Interest in, or any rights with respect to, the Company or the Properties except as provided in Schedule C. (d) The non-defaulting Shareholder shall have the right but not the obligation to contribute to the Company the amount of the defaulted contribution as an additional contribution and elect that the Ownership Interest of the defaulting Shareholder shall be reduced and the Ownership Interest of the non-defaulting Shareholder shall be increased in accordance with the formula set forth in Section 10.6 of this Agreement, treating the additional contribution as if it were a contribution under Section 12.2 of this Agreement.
Appears in 2 contracts
Samples: Shareholder Agreement (Golden Goliath Resources LTD), Shareholder Agreements (Golden Goliath Resources LTD)
Failure to Make Contributions. 11.1 Pre-ability to water down
(a) The If a Member does not timely contribute capital when required, that Member shall be in default under this Agreement. In such event, a non-defaulting Shareholder Member shall have send the right but defaulting Member written notice of such default, giving such Member fourteen (14) days from the date such notice is given to contribute the entire amount of its required Capital Contribution. If the defaulting Member does not the obligation to advance or cause to be advanced contribute its required capital to the Company within said fourteen (14)-day period, those non-defaulting Members who hold a majority of the defaulted contribution Percentage Interests held by all non-defaulting Members may elect any one or more of the following remedies:
A. One or more non-defaulting Members may advance funds to the Company to cover those amounts that the defaulting Member fails to contribute. Amounts that a non-defaulting Member so advances on behalf of the defaulting Shareholder Member shall become a loan due and treat owing from the samedefaulting Member to such non-defaulting Member and bear interest at the rate of ten percent (10%) per annum, together with any accrued interest, as a demand loan payable monthly. All cash distributions otherwise distributable to the defaulting Shareholder Member under this Agreement shall instead be paid to the non-defaulting Members making such advances until such advances and interest thereon are paid in full. In any event, any such advances shall be evidenced by a promissory note in a form reasonably acceptable to the non-defaulting Members and be due and payable by the defaulting Member one (a “Default Loan”1) bearing interest year from the date that such advance was made. Any amounts repaid shall first be applied to costs of the advance until paid at the collection, then to interest and thereafter to principal. Effective Interest Rate plus an additional two percentupon a Member becoming a defaulting Member, but in no event at a rate higher than the maximum rate permitted by Law. The failure to repay a Default Loan upon demand shall be a default. Failure to timely repay any Default Loan shall entitle the other Shareholder to enforce the security for the loan and to exercise the rights provided in Section 11.1(b). Each Shareholder hereby each Member grants to the other non-defaulting Members who advance funds under this SECTION 3.8A a lien upon its Ownership Interest, the Assets and a pledge of and security interest in its Ownership Membership Interest to secure any Default Loan made hereunder, including interest thereon, reasonable attorneys fees its obligation to repay such advances and all agrees to execute and deliver a promissory note as described herein together with a security agreement in a form reasonably acceptable to the non-defaulting Members and such UCC-1 financing statements and assignments of certificates of membership (or other reasonable costs and expenses incurred in recovering the loan with interest and in enforcing documents of transfer) as such lien, pledge, or security interest, or bothnon-defaulting Members may reasonably request.
(b) B. One or more non-defaulting Members may contribute funds to the capital of the Company to cover those amounts that the defaulting Member fails to contribute. In such event, the Percentage Interests of all Members shall be adjusted proportionately to reflect the cumulative total Capital Contributions each Member has contributed or, with respect to a non-defaulting Member, which such Member has agreed to contribute.
C. The non-defaulting Shareholder may elect, by Notice to the defaulting
(c) Shareholder at any time within 15 days after expiration Members who hold a majority of the 15 day cure period provided in this Section 11.1, or on failure to repay a Default Loan on demand to have Percentage Interests held by all of the Ownership Interest owned by the defaulting Shareholder exchanged for the Net Smelter Returns Royalty, determined as provided in Schedule C, upon which transfer and exchange the defaulting Shareholder shall have no Ownership Interest in, or any rights with respect to, the Company or the Properties except as provided in Schedule C.
(d) The non-defaulting Shareholder shall have Members may dissolve the right but not the obligation to contribute to Company, in which event the Company the amount of the defaulted contribution as an additional contribution and elect that the Ownership Interest of the defaulting Shareholder shall be reduced wound-up, liquidated and the Ownership Interest of the non-defaulting Shareholder shall be increased in accordance with the formula set forth in Section 10.6 of this Agreement, treating the additional contribution as if it were a contribution under Section 12.2 of this Agreement.terminated pursuant to ARTICLE X.
Appears in 2 contracts
Samples: Operating Agreement (Osi Restaurant Partners, LLC), Operating Agreement (Outback Steakhouse Inc)
Failure to Make Contributions. 11.1 PreIf a Member does not timely contribute capital when required, that Member shall be in default under this Agreement. In such event, the Managers shall send the defaulting Member written notice of such default, giving him or her fourteen (14) days from the date such notice is given to contribute the entire amount of his or her required capital contribution. If the defaulting Member does not contribute his or her required capital to the Company within said fourteen (14)-day period, the Managers or those non-ability to water downdefaulting Members who hold a majority of the Percentage Interests held by all non-defaulting Members may elect any one or more of the following remedies:
(a) A. The non-defaulting Shareholder shall have the right but not the obligation to Members may advance or cause to be advanced funds to the Company to cover those amounts which the defaulted contribution defaulting Member fails to contribute. Amounts which a non-defaulting Member so advances on behalf of the defaulting Shareholder Member shall become a loan due and treat owing from the samedefaulting Member to such non-defaulting Member and bear interest at the rate of ten percent (10%) per annum, together with any accrued interest, as a demand loan payable monthly. All cash distributions otherwise distributable to the defaulting Shareholder Member under this Agreement shall instead be paid to the non-defaulting Members making such advances until such advances and interest thereon are paid in full. In any event, any such advances shall be evidenced by a promissory note in the form of Exhibit “A” and be due and payable by the defaulting Member one (a “Default Loan”1) bearing interest year from the date of that such advance was made. Any amounts repaid shall first be applied to interest and thereafter to principal. Effective upon a Member becoming a defaulting Member, each Member grants to the non- defaulting Members who advance until paid at the Effective funds under this Section 3.5A a security interest in his or her Economic Interest Rate plus an additional two percent, but in no event at a rate higher than the maximum rate permitted by Law. The failure to secure his or her obligation to repay such advances and agrees to execute and deliver a Default Loan upon demand promissory note as described herein together with a security agreement in the form of Exhibit “A“ and such UCC-1 financing statements and assignments of certificates of membership (or other documents of transfer) as such non-defaulting. Members may reasonably request.
B. The Percentage Interests shall be adjusted, in which event each Member’s Percentage Interest shall be a default. Failure to timely repay any Default Loan shall entitle the other Shareholder to enforce the security for the loan and to exercise the rights provided in Section 11.1(b). Each Shareholder hereby grants to the other a lien upon its Ownership Interestfraction, the Assets numerator of which represents the amount of such Member’s Capital Account and a pledge the denominator of and security interest in its Ownership Interest to secure any Default Loan made hereunder, including interest thereon, reasonable attorneys fees and which represents the sum of all other reasonable costs and expenses incurred in recovering the loan with interest and in enforcing such lien, pledge, or security interest, or bothMembers’ Capital Accounts.
(b) C. The non-defaulting Shareholder Members who hold a majority of the Percentage Interests held by all non-defaulting Members may electdissolve the Company, by Notice in which event the Company shall be wound-up, liquidated and terminated pursuant to Article X.
D. The Company or the non-defaulting Members may purchase the defaulting Member’s entire Membership Interest in accordance with the same terms and conditions as those set forth in Article VIII except that the purchase price shall be an amount equal to eighty percent (80%) of the purchase price determined in accordance with Section 8.3.
E. The defaulting Members shall have no right to receive any distributions from the Company until the non-defaulting Members have first received distributions in an amount equal to the defaultingadditional capital contributed by each non-defaulting Member to the Company plus a cumulative, non-compounded return thereon at the rate of ten percent (10%) per annum.
F. The defaulting Member shall lose his or her voting and approval rights under the Act, the Articles and this Agreement until such time as the defaulting Member cures the default.
G. The defaulting Member shall lose his or her ability (cwhether as a Member or a Manager) Shareholder at any time within 15 days after expiration to actively participate in the management and operations of the 15 day cure period Company until such time as the defaulting Member cures the default.
H. If the defaulting Member does not make a required contribution of property or services, the Company may require the defaulting Member to contribute cash equal to that portion of the fair market value of the contribution that has not been made. This remedy is in addition to, and not in lieu of any other rights, including the right to specific performance, the remedies listed above in this Section 3.5, or any other rights of the Company or its Members under applicable law. Each Member acknowledges and agrees that the remedies described in this Section 3.5 bear a reasonable relationship to the damages which the Members estimate may be suffered by the Company and the non-defaulting Members by reason of the failure of a defaulting Member to make an additional Capital Contribution and the election of any or all of the above described remedies is not unreasonable under the circumstances existing as of the date hereof. The election of the Managers or non-defaulting Members, as applicable, to pursue any remedy provided in this Section 11.1, 3.5 shall not be a waiver or on failure to repay a Default Loan on demand to have all limitation of the Ownership Interest owned by the defaulting Shareholder exchanged for the Net Smelter Returns Royalty, determined as provided in Schedule C, upon which transfer and exchange the defaulting Shareholder shall have no Ownership Interest in, right to pursue an additional or any rights different remedy available hereunder or of law or equity with respect to, the Company or the Properties except as provided in Schedule C.
(d) The non-defaulting Shareholder shall have the right but not the obligation to contribute to the Company the amount of the defaulted contribution as an additional contribution and elect that the Ownership Interest of the defaulting Shareholder shall be reduced and the Ownership Interest of the non-defaulting Shareholder shall be increased in accordance with the formula set forth in Section 10.6 of this Agreement, treating the additional contribution as if it were a contribution under Section 12.2 of this Agreementany subsequent default.
Appears in 1 contract
Samples: Operating Agreement
Failure to Make Contributions. 11.1 Pre-ability In the event that an Employer, signatory to water down
(a) The non-defaulting Shareholder shall have the right but not the obligation or bound by this Agreement or who becomes signatory to advance or cause bound by this Agreement, fails to be advanced make its contributions and payments to the Company the defaulted contribution on behalf of the defaulting Shareholder and treat the same, together with any accrued interest, as a demand loan to the defaulting Shareholder (a “Default Loan”) bearing interest from the date of the advance until paid at the Effective Interest Rate plus an additional two percent, but in no event at a rate higher than the maximum rate permitted by Law. The failure to repay a Default Loan upon demand shall be a default. Failure to timely repay any Default Loan shall entitle the other Shareholder to enforce the security for the loan and to exercise the rights provided in Section 11.1(b). Each Shareholder hereby grants to the other a lien upon its Ownership Interest, the Assets and a pledge of and security interest in its Ownership Interest to secure any Default Loan made hereunder, including interest thereon, reasonable attorneys fees and all other reasonable costs and expenses incurred in recovering the loan with interest and in enforcing such lien, pledge, or security interest, or both.
(b) The non-defaulting Shareholder may elect, by Notice to the defaulting
(c) Shareholder at any time within 15 days after expiration of the 15 day cure period provided in this Section 11.1, or on failure to repay a Default Loan on demand to have all of the Ownership Interest owned by the defaulting Shareholder exchanged for the Net Smelter Returns Royalty, determined as provided in Schedule C, upon which transfer and exchange the defaulting Shareholder shall have no Ownership Interest in, or any rights with respect to, the Company or the Properties except as provided in Schedule C.
(d) The non-defaulting Shareholder shall have the right but not the obligation to contribute to the Company the amount of the defaulted contribution as an additional contribution and elect that the Ownership Interest of the defaulting Shareholder shall be reduced and the Ownership Interest of the non-defaulting Shareholder shall be increased Employee Benefit Plans in accordance with the formula set forth in Section 10.6 requirements of this the Agreement, treating the additional contribution applicable wage sheet and this Addendum, the Union shall be authorized to take any economic action against the Employer it deems reasonable, including the removal of employees from the job or shop of any such Employer, and such action shall not be deemed to be in violation of any other provision in the Agreement, including but not limited to the no-strike clause. This provision shall not be applied in regard to any fringe benefit contributions which are due or claimed to be due as if it were a contribution under Section 12.2 result of an alleged violation of the Subcontractor clause in the Agreement. The Employer shall be liable for all costs of collecting the contributions due, together with attorneys’ fees, interest at the rate specified in the Trust Agreements or policies adopted by the Trustees, and such late payment fees or liquidated damages at the rate specified in the Trust Agreements or policies adopted by the Boards of Trustees. The Employer’s liability for payments required by this Addendum shall not be subject to the grievance or arbitration procedure of the Agreement or any Trust Agreement. New Employers, or consistently delinquent Employers, who are signatory to or bound by the Agreement or who become signatory to or bound by the Agreement, may be required to furnish a good and sufficient surety bond, satisfactory to the Trustees of the Employee Benefit Plans, in an amount up to one hundred thousand dollars ($100,000), for the purpose of insuring payment of contributions due to the Employee Benefit Plans as required by the Agreement, this Addendum and applicable wage sheet for a period of one (1) year or from the time of a second (2nd) delinquency in any one (1) year period, whichever is applicable. The bond shall be procured from a surety company licensed to do business in the State of Oregon and a copy of such bond shall be delivered to the administrator of the Employee Benefit Plans. The Employer shall maintain the bond in full force and effect throughout the term of the Agreement, including any renewals or extensions hereof. In lieu of a bond, a cash deposit in an amount satisfactory to the Trustees of the Employee Benefit Plans up to one hundred thousand dollars ($100,000) may be made with the administrator of the Employee Benefit Plans.
Appears in 1 contract
Samples: Labor Agreement
Failure to Make Contributions. 11.1 Pre-ability to water down
(a) The If a Partner shall default in any of its obligations under SECTION 0 to make contributions to the Partnership in accordance with the terms of any call for such contributions, the Managing Partner shall immediately notify each of the Partners (a "DEFAULT NOTICE"). If the contribution has not been made by the defaulting Partner within two (2) business days after the receipt of the Default Notice, the Managing Partner shall again notify each of the Partners. Within five (5) business days after the receipt of the Default Notice, if the default has not been cured by the payment of the contribution and interest thereon (calculated as hereinafter provided) (the "DEFAULT AMOUNT"), each of the non-defaulting Shareholder shall have the right but not the obligation to advance or cause to be advanced Partners may, in its sole discretion, pay to the Company Managing Partner its portion (based on the defaulted ratio that each non-defaulting Partner's Ownership Interest bears to the aggregate Ownership Interests of all non-defaulting Partners participating in such contribution on behalf (the non-defaulting Partners that so elect are herein referenced to as the "PARTICIPATING PARTNERS") of the defaulting Shareholder and treat the same, together with any accrued interest, as a demand loan to the defaulting Shareholder (a “Default Loan”) bearing interest from the date of the advance until paid at the Effective Interest Rate plus an additional two percent, but in no event at a rate higher than the maximum rate permitted by Law. The failure to repay a Default Loan upon demand shall be a default. Failure to timely repay any Default Loan shall entitle the other Shareholder to enforce the security for the loan and to exercise the rights provided in Section 11.1(b). Each Shareholder hereby grants to the other a lien upon its Ownership Interest, the Assets and a pledge of and security interest in its Ownership Interest to secure any Default Loan made hereunder, including interest thereon, reasonable attorneys fees and all other reasonable costs and expenses incurred in recovering the loan with interest and in enforcing such lien, pledge, or security interest, or bothAmount.
(b) During the continuance of any payment default by any Partner, the Partner shall not be entitled to receive any cash distributions and the Participating Partners will share in all cash distributions that otherwise would have been made to the defaulting Partner on a proportionate basis based on the ratio that each Participating Partner's Ownership Interest bears to the aggregate Ownership Interests of all Participating Partners. The non-defaulting Shareholder may electPartner shall not be permitted to be represented on the Management Committee or other committees, and will have its voting rights suspended, but the defaulting Partner shall continue to be liable for its obligations as a Partner under this Agreement. If a defaulting Partner cures its default within the thirty (30) day period described in SECTION 0, by Notice paying to the defaultingPartnership the amount of the default and the interest thereon calculated under SECTION 0 less the amount that was distributed to the Participating Partners from the amounts that were otherwise distributable to the defaulting Partner, the amount paid shall be distributed to the Participating Partners pro rata in accordance with their Ownership Interests.
(c) Shareholder Interest shall accrue on unpaid contributions from the date that the contribution became payable until the contribution is paid at any time within 15 days after expiration a rate equal to the lesser of the 15 day cure period provided in this Section 11.1, or on failure to repay a Default Loan on demand to have all of the Ownership Interest owned by the defaulting Shareholder exchanged for the Net Smelter Returns Royalty, determined as provided in Schedule C, upon which transfer and exchange the defaulting Shareholder shall have no Ownership Interest in, or any rights with respect to, the Company fifteen percent (15%) per annum or the Properties except as provided in Schedule C.maximum lawful rate.
(d) The non-In the event that a defaulting Shareholder shall have the right but not the obligation Partner fails to contribute pay to the Company the amount Partnership any portion of the defaulted Default Amount as provided herein on or prior to the thirtieth (30th) day after the due date for the contribution or the Participating Partners have not received from the amounts that were otherwise distributable to the defaulting Partner the Default Amount plus interest thereon as an additional contribution provided herein prior to the thirtieth (30th) day after the due date for the contribution, the Participating Partners may elect to (x) continue receiving the benefits of SECTIONS 0 and elect that 0 or (y) require the Partnership to reduce the Ownership Interest of the defaulting Shareholder shall be reduced and Partner, effective on the thirty-first (31st) day after the due date for the contribution (the "ADJUSTMENT DATE"), to a percentage determined by multiplying the Ownership Interest of the defaulting Partner (as determined on the Adjustment Date) by a number equal to one minus a fraction, the numerator of which is one hundred fifty percent (150%) of the Default Amount less the amounts that have been distributed to the Participating Partners prior to the adjustment Date that were otherwise distributable to the defaulting Partner, and the denominator of which is the product of (1) the Ownership Interest of the defaulting Partner (as determined on the Adjustment Date) multiplied by (2) the aggregate amount of the Capital Accounts of all Partners on the Adjustment Date. The adjustment shall apply separately for each default on a cash call. The Ownership Interests of the Participating Partners shall be adjusted upward by the proportion of the amount of the downward adjustment made to the Ownership Interest of the defaulting Partner.
(e) If the Participating Partners have elected the remedy provided in SECTION 0(Y), the default to which such election is related will be deemed to have been cured and the defaulting Partner will no longer be deemed a non-defaulting Shareholder Partner for this SECTION 0, except for purposes of SECTION 0.
(f) If at anytime or over a course of time, the Ownership Interest of a Partner is reduced by seventy-five percent (75%) or more as a result of the provisions of this SECTION 0, the defaulting Partner shall not be permitted to be represented on the Management Committee or other committees and will have its voting rights suspended, but the defaulting Partner shall continue to be liable for its obligations as a Partner under this Agreement and shall continue to have all other rights hereunder.
(g) Notwithstanding the foregoing, the remedies provided in SECTION 0 are cumulative and are not exclusive, and in the event of a default by a Partner, the Partnership and the Partners shall be increased in accordance with the formula set forth in Section 10.6 of this Agreement, treating the additional contribution as if it were a contribution under Section 12.2 of this Agreemententitled to all available legal or equitable remedies.
Appears in 1 contract
Samples: General Partnership Agreement (Offshore Energy Development Corp)
Failure to Make Contributions. 11.1 Pre-ability to water down
(a) The If a Member does not timely contribute capital when required, that Member shall be in default under this Agreement. In such event, a non-defaulting Shareholder Member shall have send the right but defaulting Member written notice of such default, giving such Member fourteen (14) days from the date such notice is given to contribute the entire amount of its required Capital Contribution. If the defaulting Member does not the obligation to advance or cause to be advanced contribute its required capital to the Company within said fourteen (14)-day period, those non-defaulting Members who hold a majority of the defaulted contribution Percentage Interests held by all non-defaulting Members may elect any one or more of the following remedies:
A. One or more non-defaulting Members may advance funds to the Company to cover those amounts that the defaulting Member fails to contribute. Amounts that a non-defaulting Member so advances on behalf of the defaulting Shareholder Member shall become a loan due and treat owing from the samedefaulting Member to such non-defaulting Member and bear interest at the rate of ten percent (10%) per annum, together with any accrued interest, as a demand loan payable monthly. All cash distributions otherwise distributable to the defaulting Shareholder Member under this Agreement shall instead be paid to the non-defaulting Members making such advances until such advances and interest thereon are paid in full. In any event, any such advances shall be evidenced by a promissory note in a form reasonably acceptable to the non-defaulting Members and be due and payable by the defaulting Member one (a “Default Loan”1) bearing interest year from the date that such advance was made. Any amounts repaid shall first be applied to costs of the advance until paid at the collection, then to interest and thereafter to principal. Effective Interest Rate plus an additional two percentupon a Member becoming a defaulting Member, but in no event at a rate higher than the maximum rate permitted by Law. The failure to repay a Default Loan upon demand shall be a default. Failure to timely repay any Default Loan shall entitle the other Shareholder to enforce the security for the loan and to exercise the rights provided in Section 11.1(b). Each Shareholder hereby each Member grants to the other non-defaulting Members who advance funds under this Section 3.8A a lien upon its Ownership Interest, the Assets and a pledge of and security interest in its Ownership Membership Interest to secure any Default Loan made hereunder, including interest thereon, reasonable attorneys fees its obligation to repay such advances and all agrees to execute and deliver a promissory note as described herein together with a security agreement in a form reasonably acceptable to the non-defaulting Members and such UCC-1 financing statements and assignments of certificates of membership (or other reasonable costs and expenses incurred in recovering the loan with interest and in enforcing documents of transfer) as such lien, pledge, or security interest, or bothnon-defaulting Members may reasonably request.
(b) B. One or more non-defaulting Members may contribute funds to the capital of the Company to cover those amounts that the defaulting Member fails to contribute. In such event, the Percentage Interests of all Members shall be adjusted proportionately to reflect the cumulative total Capital Contributions each Member has contributed or, with respect to a non-defaulting Member, which such Member has agreed to contribute.
C. The non-defaulting Shareholder may elect, by Notice to the defaulting
(c) Shareholder at any time within 15 days after expiration Members who hold a majority of the 15 day cure period provided in this Section 11.1, or on failure to repay a Default Loan on demand to have Percentage Interests held by all of the Ownership Interest owned by the defaulting Shareholder exchanged for the Net Smelter Returns Royalty, determined as provided in Schedule C, upon which transfer and exchange the defaulting Shareholder shall have no Ownership Interest in, or any rights with respect to, the Company or the Properties except as provided in Schedule C.
(d) The non-defaulting Shareholder shall have Members may dissolve the right but not the obligation to contribute to Company, in which event the Company shall be wound-up, liquidated and terminated pursuant to Article X.
D. The defaulting Member shall lose its voting and approval rights under the amount Act, the Certificate and this Agreement.
E. The defaulting Member shall lose its ability to participate in the management and operations of the defaulted contribution as an additional contribution and elect that the Ownership Interest of the defaulting Shareholder shall be reduced and the Ownership Interest of Company.
F. The Company or the non-defaulting Shareholder shall be increased in accordance with Members may purchase the formula set forth in Section 10.6 defaulting Member’s entire Membership Interest for an amount equal to eighty percent (80%) of this Agreement, treating the additional contribution as if it were a contribution under Section 12.2 Fair Market Value of this Agreementthe Membership Interest.
Appears in 1 contract
Failure to Make Contributions. 11.1 Pre-ability to water down
(a) The If a Partner shall default in any of its obligations under SECTIONS 5.4 OR 5.5 to make contributions to the Partnership in accordance with the terms of any call for such contributions, the Managing Partner shall immediately notify each of the Partners (a "DEFAULT NOTICE"). If the contribution has not been made by the defaulting Partner within two (2) business days after the receipt of the Default Notice, the Managing Partner shall again notify each of the Partners. Within five (5) business days after the receipt of the Default Notice, if the default has not been cured by the payment of the contribution and interest thereon (calculated as hereinafter provided) (the "DEFAULT AMOUNT"), each of the non-defaulting Shareholder shall have the right but not the obligation to advance or cause to be advanced Partners may, in its sole discretion, pay to the Company Managing Partner its portion (based on the defaulted ratio that each non-defaulting Partner's Ownership Interest bears to the aggregate Ownership Interests of all non-defaulting Partners participating in such contribution on behalf (the non-defaulting Partners that so elect are herein referred to as the "PARTICIPATING PARTNERS")) of the defaulting Shareholder and treat the same, together with any accrued interest, as a demand loan to the defaulting Shareholder (a “Default Loan”) bearing interest from the date of the advance until paid at the Effective Interest Rate plus an additional two percent, but in no event at a rate higher than the maximum rate permitted by Law. The failure to repay a Default Loan upon demand shall be a default. Failure to timely repay any Default Loan shall entitle the other Shareholder to enforce the security for the loan and to exercise the rights provided in Section 11.1(b). Each Shareholder hereby grants to the other a lien upon its Ownership Interest, the Assets and a pledge of and security interest in its Ownership Interest to secure any Default Loan made hereunder, including interest thereon, reasonable attorneys fees and all other reasonable costs and expenses incurred in recovering the loan with interest and in enforcing such lien, pledge, or security interest, or bothAmount.
(b) During the continuance of any payment default by any Partner, the Partner shall not be entitled to receive any cash distributions and the Participating Partners will share in all cash distributions that otherwise would have been made to the defaulting Partner on a proportionate basis based on the ratio that each Participating Partner's Ownership Interest bears to the aggregate Ownership Interests of all Participating Partners. The non-defaulting Shareholder may electPartner shall not be permitted to be represented on the Management Committee or other committees, and will have its voting rights suspended, but the defaulting Partner shall continue to be liable for its obligations as a Partner under this Agreement. If a defaulting Partner cures its default within the thirty (30) day period described in SECTION 5.6(D), by Notice paying to the defaultingPartnership the amount of the default and the interest thereon calculated under SECTION 5.6(C) less the amount that was distributed to the Participating Partners from the amounts that were otherwise distributable to the defaulting Partner, the amount paid shall be distributed to the Participating Partners pro rata in accordance with their Ownership Interests.
(c) Shareholder Interest shall accrue on unpaid contributions from the date that the contribution became payable until the contribution is paid at any time within 15 days after expiration a rate equal to the lesser of the 15 day cure period provided in this Section 11.1, or on failure to repay a Default Loan on demand to have all of the Ownership Interest owned by the defaulting Shareholder exchanged for the Net Smelter Returns Royalty, determined as provided in Schedule C, upon which transfer and exchange the defaulting Shareholder shall have no Ownership Interest in, or any rights with respect to, the Company fifteen percent (15%) per annum or the Properties except as provided in Schedule C.maximum lawful rate.
(d) The non-In the event that a defaulting Shareholder shall have the right but not the obligation Partner fails to contribute pay to the Company the amount Partnership any portion of the defaulted Default Amount as provided herein on or prior to the thirtieth (30th) day after the due date for the contribution or the Participating Partners have not received from the amounts that were otherwise distributable to the defaulting Partner the Default Amount plus interest thereon as an additional contribution and provided herein prior to the thirtieth (30th) day after the due date for the contribution, the Participating Partners may elect that to (x) continue receiving the benefits of SECTIONS 5.6(B) AND 5.6(C) OR (Y) require the Partnership to reduce the Ownership Interest of the defaulting Shareholder shall be reduced and Partner, effective on the thirty-first (31st) day after the due date for the contribution (the "ADJUSTMENT DATE"), to a percentage determined by multiplying the Ownership Interest of the defaulting Partner (as determined on the Adjustment Date) by a number equal to one minus a fraction, the numerator of which is one hundred fifty percent (150%) of the Default Amount less the amounts that have been distributed to the Participating Partners prior to the adjustment Date that were otherwise distributable to the defaulting Partner, and the denominator of which is the product of (1) the Ownership Interest of the defaulting Partner (as determined on the Adjustment Date) multiplied by (2) the aggregate amount of the Capital Accounts of all Partners on the Adjustment Date. The adjustment shall apply separately for each default on a cash call. The Ownership Interests of the Participating Partners shall be adjusted upward by the proportion of the amount of the downward adjustment made to the Ownership Interest of the defaulting Partner.
(e) If the Participating Partners have elected the remedies provided in SECTION 5.6(D)(Y), the default to which such election is related will be deemed to have been cured and the defaulting Partner will no longer be deemed a non-defaulting Shareholder shall be increased in accordance with Partner for this SECTION 5.6, except for purposes of SECTION 5.6(F).
(f) If at any time or over a course of time, the formula set forth in Section 10.6 Ownership Interest of a Partner is reduced by seventy-five percent (75%) or more as a result of the provisions of this AgreementSECTION 5.6, treating the additional contribution defaulting Partner shall not be permitted to be represented on the Management Committee or other committees and will have its voting rights suspended, but the defaulting Partner shall continue to be liable for its obligations as if it were a contribution Partner under Section 12.2 of this Agreement.
(g) Notwithstanding the foregoing, the remedies provided in SECTION 5.6 are cumulative and are not exclusive, and in the event of a default by a Partner, the Partnership and the Partners shall be entitled to all available legal or equitable remedies.
Appears in 1 contract
Samples: General Partnership Agreement (Offshore Energy Development Corp)
Failure to Make Contributions. 11.1 Pre-ability to water down
(a) The If a Member does not timely contribute capital when required, that Member shall be in default under this Agreement. In such event, a non-defaulting Shareholder Member shall have send the right but defaulting Member written notice of such default, giving such Member fourteen (14) days from the date such notice is given to contribute the entire amount of its required Capital Contribution. If the defaulting Member does not the obligation to advance or cause to be advanced contribute its required capital to the Company within said fourteen (14)-day period, those non-defaulting Members who hold a majority of the defaulted contribution Percentage Interests held by all non-defaulting Members may elect any one or more of the following remedies:
A. One or more non-defaulting Members may advance funds to the Company to cover those amounts that the defaulting Member fails to contribute. Amounts that a non-defaulting Member so advances on behalf of the defaulting Shareholder Member shall become a loan due and treat owing from the samedefaulting Member to such non-defaulting Member and bear interest at the rate of ten percent (10%) per annum, together with any accrued interest, as a demand loan payable monthly. All cash distributions otherwise distributable to the defaulting Shareholder Member under this Agreement shall instead be paid to the non-defaulting Members making such advances until such advances and interest thereon are paid in full. In any event, any such advances shall be evidenced by a promissory note in a form reasonably acceptable to the non-defaulting Members and be due and payable by the defaulting Member one (a “Default Loan”1) bearing interest year from the date that such advance was made. Any amounts repaid shall first be applied to costs of the advance until paid at the collection, then to interest and thereafter to principal. Effective Interest Rate plus an additional two percentupon a Member becoming a defaulting Member, but in no event at a rate higher than the maximum rate permitted by Law. The failure to repay a Default Loan upon demand shall be a default. Failure to timely repay any Default Loan shall entitle the other Shareholder to enforce the security for the loan and to exercise the rights provided in Section 11.1(b). Each Shareholder hereby each Member grants to the other non-defaulting Members who advance funds under this Section 3.8A a lien upon its Ownership Interest, the Assets and a pledge of and security interest in its Ownership Membership Interest to secure any Default Loan made hereunder, including interest thereon, reasonable attorneys fees its obligation to repay such advances and all agrees to execute and deliver a promissory note as described herein together with a security agreement in a form reasonably acceptable to the non-defaulting Members and such UCC-1 financing statements and assignments of certificates of membership (or other reasonable costs and expenses incurred in recovering the loan with interest and in enforcing documents of transfer) as such lien, pledge, or security interest, or bothnon-defaulting Members may reasonably request.
(b) B. One or more non-defaulting Members may contribute funds to the capital of the Company to cover those amounts that the defaulting Member fails to contribute. In such event, the Percentage Interests of all Members shall be adjusted proportionately to reflect the cumulative total Capital Contributions each Member has contributed or, with respect to a non-defaulting Member, which such Member has agreed to contribute.
C. The non-defaulting Shareholder may elect, by Notice to the defaulting
(c) Shareholder at any time within 15 days after expiration Members who hold a majority of the 15 day cure period provided in this Section 11.1, or on failure to repay a Default Loan on demand to have Percentage Interests held by all of the Ownership Interest owned by the defaulting Shareholder exchanged for the Net Smelter Returns Royalty, determined as provided in Schedule C, upon which transfer and exchange the defaulting Shareholder shall have no Ownership Interest in, or any rights with respect to, the Company or the Properties except as provided in Schedule C.
(d) The non-defaulting Shareholder shall have Members may dissolve the right but not the obligation to contribute to Company, in which event the Company shall be wound-up, liquidated and terminated pursuant to Article X.
D. The defaulting Member shall lose its voting and approval rights under the amount Act, the Certificate and this Agreement.
E. The defaulting Member shall lose its ability to participate in the management and operations of the defaulted contribution as an additional contribution and elect that the Ownership Interest of the defaulting Shareholder shall be reduced and the Ownership Interest of Company.
F. The Company or the non-defaulting Shareholder shall be increased in accordance with Members may purchase the formula set forth in Section 10.6 defaulting Member's entire Membership Interest for an amount equal to eighty percent (80%) of this Agreement, treating the additional contribution as if it were a contribution under Section 12.2 Fair Market Value of this Agreementthe Membership Interest.
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