Funding Default. (a) If a Defaulting Shareholder fails to provide the required funding in the amount and manner and within the specified period set forth in a Contribution Notice or as otherwise required pursuant to Section 7.5(b) and, in any case, the 10 Business Day cure period specified by Section 8.1 has elapsed, the Non-Defaulting Shareholder shall have the right (but not the obligation) to: (i) fund all or a portion of the amount not funded by the Defaulting Shareholder (the “Defaulted Amount”) during the 10 day period following the expiry of the cure period referred to in Section 8.1 (the last day of such cure period being referred to as the “Dilution Day”) and, subject to the immediately following sentence, cause the dilution of the Proportionate Interest of the Defaulting Shareholder in accordance with Section 8.3. Notwithstanding anything to the contrary contained in this Agreement, for the period of time commencing on the date of this Agreement and ending on the date on which the initial Cultivation License for the Delta 3 Assets and Operations is obtained, the Non-Defaulting Shareholder shall only have a right to cause the dilution of the Defaulting Shareholder if the required funding (including without limitation, the amount) set forth in a Contribution Notice or otherwise required pursuant to Section 7.5(b) is included within the Initial Budget, or (ii) advance all or a portion of the Defaulted Amount on behalf of the Defaulting Shareholder as a loan to the Defaulting Shareholder, with the principal amount of such loan (and any overdue interest) bearing interest at all times at a rate per annum equal to the sum of Prime Rate plus 15%, as the same shall change from time to time, or at the maximum rate permitted by Applicable Law, whichever is less, calculated and compounded monthly in arrears until paid in full (either by way of a direct payment from the Defaulting Shareholder to the Non-Defaulting Shareholder or through application of future Distributions pursuant to Section 9.1(c)) (a “Shareholder Loan”) and, for greater certainty, the Shareholder Loan shall be considered to cure any default by the Defaulting Shareholder to fund the required amount. (b) If the Non-Defaulting Shareholder elects to fund all or a portion of the Defaulted Amount in the manner prescribed in Section 8.2(a)(i), such funding by the Non-Defaulting Shareholder shall be allocated to Share Capital in the same manner as the Share Capital held by the Non-Defaulting Shareholder immediately prior to the funding default. (c) If the Non-Defaulting Shareholder elects to advance all or a portion of the Defaulted Amount on behalf of the Defaulting Shareholder as a loan to the Defaulting Shareholder in the manner prescribed in Section 8.2(a)(ii), such advance by the Non-Defaulting Shareholder shall be allocated to Share Capital in the same manner as the Share Capital held by the Defaulting Shareholder immediately prior to the loan.
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Samples: Shareholders Agreement (Emerald Health Therapeutics Inc.), Shareholders Agreement (Village Farms International, Inc.), Shareholders Agreement (Village Farms International, Inc.)
Funding Default. 14.1 In the event that any Shareholder (a“the Defaulting Shareholder”) If a Defaulting Shareholder fails shall fail, for whatever reason, to provide the Project Funding or shall fail to execute the Suretyship Undertakings and/or the Guarantees required funding in terms of clause 13 (“the amount and manner and within the specified period set forth in a Contribution Notice or as otherwise required pursuant to Section 7.5(b) and, in any caseDefault Security”), the 10 Business Day cure period specified by Section 8.1 has elapsedother Shareholders shall be entitled, without prejudice to any other entitlements which they may have, to advance the Non-Defaulting Shareholder shall have the right (but not the obligation) to:
(i) fund all whole or a portion of the amount not funded Project Funding, the Defaulting Shareholders shall be in default (“a Funding Default”) of its obligations in terms of this Agreement, and the Shareholder (or if there shall be more than one shareholder, all or any of them in proportion to their Shareholding, (“the Funding Shareholder”), shall be entitled (but no obliged), without prejudice to any other entitlements which it or they may have hereunder, thereupon to contribute the whole or in part the Defaulting Funding to the Company, or furnish the Default Security to the relevant Lenders and in which event:
14.1.1 The Default Funding so contributed by the Funding Shareholders shall constitute loans (“Default Funding Loans”) advanced by the Funding Shareholders to the Company on the following terms and conditions:
14.1.1.1 the Default Funding Loan shall accrue interest at the Prime Rate plus [***]: and
14.1.1.2 subject to the provisions of clause 12.3, the Default Funding Loan shall be repayable by the Company to the Funding Shareholders(s) in priority to the payments of any dividends or other distributions to the Shareholders; Provided however that, the Defaulting Shareholder shall nonetheless remain entitled at any time to remedy such Funding Default by contributing to the Company, as and when it is able to do so, such funding (the “Defaulted AmountRemedial Funding”) during the 10 day period following the expiry in respect of the cure period referred Default Funding, and if it shall contribute any Remedial Funding, the Company shall forthwith apply all such Remedial Funding towards repayment of the Funding Shareholders (pro-rata to their respective Shareholdings) of the then –outstanding Default Funding Loans. 14.2 in Section 8.1 (the last day of such cure period being referred to as event that any Funding Default by a Default Shareholder shall not have been remedied on the “Dilution Day”) andbasis contemplated in clause 14.1.1.1, subject to the immediately following sentence, cause the dilution reasonable satisfaction of the Proportionate Interest other Shareholders, within a period of 24 months after the Funding Default concerned shall have occurred, or if in the reasonable opinion of the Defaulting Funding Shareholder in accordance with Section 8.3. Notwithstanding anything to the contrary contained in this Agreement, for the period such Funding Default shall at any time be or become incapable of time commencing on the date of this Agreement and ending on the date on which the initial Cultivation License for the Delta 3 Assets and Operations is obtained, the Non-Defaulting Shareholder shall only have a right to cause the dilution of the Defaulting Shareholder if the required funding (including without limitation, the amount) set forth in a Contribution Notice or otherwise required pursuant to Section 7.5(b) is included within the Initial Budget, or
(ii) advance all or a portion of the Defaulted Amount on behalf of the Defaulting Shareholder as a loan to being remedied by the Defaulting Shareholder, with the principal amount of such loan (and any overdue interest) bearing interest at all times at a rate per annum equal to the sum of Prime Rate plus 15%, as the same shall change from time to time, or at the maximum rate permitted by Applicable Law, whichever is less, calculated and compounded monthly in arrears until paid in full (either by way of a direct payment from the Defaulting Shareholder to the Non-Defaulting Shareholder or through application of future Distributions pursuant to Section 9.1(c)) (a “Shareholder Loan”) and, for greater certainty, the Shareholder Loan shall be considered to cure any default by the Defaulting Shareholder to fund the required amount.
(b) If the Non-Defaulting Shareholder elects to fund all or a portion of the Defaulted Amount in the manner prescribed in Section 8.2(a)(i), such funding by the Non-Defaulting Shareholder shall be allocated entitled to Share Capital in the same manner as the Share Capital held by the Non-Defaulting Shareholder immediately prior to the funding default.
(c) If the Non-Defaulting Shareholder elects to advance all or deliver a portion notice of the Defaulted Amount on behalf of the Defaulting Shareholder as a loan breach to the Defaulting Shareholder in terms of clause 31.1 and the manner prescribed in Section 8.2(a)(ii), such advance by the Non-Defaulting Shareholder further provisions of clause 31 shall be allocated to Share Capital in the same manner as the Share Capital held by the Defaulting Shareholder immediately prior to the loanapplicable.
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Funding Default. In the event that any Shareholder (a“Defaulting Shareholder”) If a Defaulting Shareholder fails shall fail, for whatever reason, to provide the funding required funding in terms of clause 10 (“Default Funding”) to Holdco, or shall fail to execute the amount and manner and within Suretyship Undertakings and/or the specified period set forth Guarantees required in a Contribution Notice or as otherwise required pursuant to Section 7.5(b) and, in any caseterms of clause 11 (“Default Security”), the 10 other Shareholders (“Non-Defaulting Shareholders”) shall be entitled, but not obliged, at any time during the period of 20 Business Day cure period specified by Section 8.1 has elapsedDays after the Defaulting Shareholder shall have failed to provide the Default Funding to Holdco, or shall have failed to provide the Default Security, to provide the Default Funding or the Default Security, as the case may be, mutatis mutandis on the basis required in terms of the Funding Notice (subject to the provisions of clauses 12.1.1 and 12.1.2) or the Guarantee Notice, as the case may be, pro rata to their then Shareholding. In the event and to the extent that any of the Non-Defaulting Shareholder Shareholders shall elect not to or shall not provide their pro rata portion of the Default Funding, or Default Security, as the case may be, the other Non-Defaulting Shareholders shall be entitled, but not obliged, to provide the portion of the Default Funding, or Default Security, as the case may be, which any of the other Non- Defaulting Shareholders shall have elected not to or shall not have provided, pro rata to their then Shareholding. On the right provision of the Defaulting Funding to Holdco or the Default Security, as the case may be, by any of the Non-Defaulting Shareholders (but not “Funding Shareholders”), the obligationbenefits which would have accrued to the Defaulting Shareholder in the event that it would have provided the required funding or would have executed the required Suretyship Undertaking and/or Guarantee (such benefits being, for the avoidance of doubt, the allotment and issue of any Shares, or the payment of any interest and/or fee to it) toshall accrue to the Funding Shareholders pro rata to their then Shareholding; provided that:
(i) fund 12.1.1 subject to clause 12.1.2 and notwithstanding the provisions of clause 10.4.4, in the event that the Funding Shareholders elect to provide the Default Funding in circumstances where all or a portion of the amount not funded by the Defaulting Shareholder (the “Defaulted Amount”) during the funding required in terms of clause 10 day period following the expiry of the cure period referred was to in Section 8.1 (the last day of such cure period being referred to as the “Dilution Day”) and, subject to the immediately following sentence, cause the dilution of the Proportionate Interest of the Defaulting Shareholder in accordance with Section 8.3. Notwithstanding anything to the contrary contained in this Agreement, for the period of time commencing on the date of this Agreement and ending on the date on which the initial Cultivation License for the Delta 3 Assets and Operations is obtained, the Non-Defaulting Shareholder shall only have a right to cause the dilution of the Defaulting Shareholder if the required funding (including without limitation, the amount) set forth in a Contribution Notice or otherwise required pursuant to Section 7.5(b) is included within the Initial Budget, or
(ii) advance all or a portion of the Defaulted Amount on behalf of the Defaulting Shareholder as a loan to the Defaulting Shareholder, with the principal amount of such loan (and any overdue interest) bearing interest at all times at a rate per annum equal to the sum of Prime Rate plus 15%, as the same shall change from time to time, or at the maximum rate permitted by Applicable Law, whichever is less, calculated and compounded monthly in arrears until paid in full (either be advanced by way of a direct payment from subscription for additional Shares, the Defaulting Shareholder subscription price for each of the Shares to be issued and allotted to the Non-Defaulting Shareholder or through application Shareholders shall be the Fair Market Value thereof;
12.1.2 notwithstanding whether the funding required in terms of future Distributions pursuant clause 10 was to Section 9.1(c)) (a “Shareholder Loan”) andbe advanced by way of subscription for additional Shares, for greater certaintythe duration of the Initial Period, the Shareholder Loan shall be considered to cure any default by the Defaulting Shareholder to fund the required amount.
(b) If and all Default Funding, together with the Non-Defaulting Shareholder elects to fund all or a Shareholders’ corresponding portion of the Defaulted Amount aggregate amount of funding required by Holdco, will be contributed by way of a loan equal to the aggregate amount of the funding required in terms of clause 10, the terms of which loan funding shall, at the relevant time, be determined by the Board;
12.1.3 any interest on any loan which constitutes Default Funding receivable by the Funding Shareholders shall be calculated at the rate of Prime, and such interest shall be paid to the Funding Shareholders by Holdco in priority to any other payment made by Holdco to the Shareholders, or any of them, and Holdco shall repay the full amount of the Defaulting Funding to the Funding Shareholders in priority to any other payment made by Holdco to the Shareholders, or any of them (including, without limitation, any dividend paid and/or other distribution made by Holdco);
12.1.4 any fee in respect of any guarantee comprising Default Security receivable by the Funding Shareholders shall be a market related fee agreed amongst the Parties, or failing such agreement, determined by the auditors of Holdco, who shall act as experts and not as arbitrators, and whose decision shall be final and binding on the Parties, save in the manner prescribed event of manifest error, and such fee shall be payable to the Funding Shareholders mutatis mutandis and in Section 8.2(a)(i)the order of priority as specified in clause 12.1.3; and
12.1.5 in the event that the Non-Defaulting Shareholders, such or any of them, do not elect to provide all the Default Funding and/or all the Default Security in terms of this clause 12, as the case may be:
12.1.5.1 any funding actually contributed to Holdco (including any funds held by Holdco in escrow in accordance with the provisions of clause 10.6) by the Non-Defaulting Shareholder Shareholders, in accordance with clause 10.5.1 and/or this clause 12, shall be allocated released from escrow and/or returned to Share Capital in the same manner such Non-Defaulting Shareholders, as the Share Capital held case may be; and
12.1.5.2 any Suretyship Undertakings and/or Guarantees executed by the Non-Defaulting Shareholder immediately prior to the funding default.
(c) If the Non-Defaulting Shareholder elects to advance all or a portion Shareholders, in terms of the Defaulted Amount on behalf of the Defaulting Shareholder as a loan to the Defaulting Shareholder in the manner prescribed in Section 8.2(a)(ii)clause 11 and/or this clause 12, such advance by the Non-Defaulting Shareholder shall be allocated to Share Capital in the same manner as the Share Capital held by the Defaulting Shareholder immediately prior to the loanterminated.
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Funding Default. 14.1 In the event that any Shareholder (a“the Defaulting Shareholder”) If a Defaulting Shareholder fails shall fail, for whatever reason, to provide the Project Funding or shall fail to execute the Suretyship Undertakings and/or the Guarantees required funding in terms of clause 13 (“the amount and manner and within the specified period set forth in a Contribution Notice or as otherwise required pursuant to Section 7.5(b) and, in any caseDefault Security”), the 10 Business Day cure period specified by Section 8.1 has elapsedother Shareholders shall be entitled, without prejudice to any other entitlements which they may have, to advance the Non-Defaulting Shareholder shall have the right (but not the obligation) to:
(i) fund all whole or a portion of the amount not funded Project Funding, the Defaulting Shareholders shall be in default (“a Funding Default”) of its obligations in terms of this Agreement, and the Shareholder (or if there shall be more than one shareholder, all or any of them in proportion to their Shareholding, (“the Funding Shareholder”), shall be entitled (but no obliged), without prejudice to any other entitlements which it or they may have hereunder, thereupon to contribute the whole or in part the Defaulting Funding to the Company, or furnish the Default Security to the relevant Lenders and in which event:
14.1.1 The Default Funding so contributed by the Funding Shareholders shall constitute loans (“Default Funding Loans”) advanced by the Funding Shareholders to the Company on the following terms and conditions:
14.1.1.1 the Default Funding Loan shall accrue interest at the Prime Rate plus [***]: and
14.1.1.2 subject to the provisions of clause 12.3, the Default Funding Loan shall be repayable by the Company to the Funding Shareholders(s) in priority to the payments of any dividends or other distributions to the Shareholders; Provided however that, the Defaulting Shareholder shall nonetheless remain entitled at any time to remedy such Funding Default by contributing to the Company, as and when it is able to do so, such funding (the “Defaulted AmountRemedial Funding”) during the 10 day period following the expiry in respect of the cure period referred Default Funding, and if it shall contribute any Remedial Funding, the Company shall forthwith apply all such Remedial Funding towards repayment of the Funding Shareholders (pro-rata to their respective Shareholdings) of the then –outstanding Default Funding Loans.
14.2 in Section 8.1 (the last day of such cure period being referred to as event that any Funding Default by a Default Shareholder shall not have been remedied on the “Dilution Day”) andbasis contemplated in clause 14.1.1.1, subject to the immediately following sentence, cause the dilution reasonable satisfaction of the Proportionate Interest other Shareholders, within a period of 24 months after the Funding Default concerned shall have occurred, or if in the reasonable opinion of the Defaulting Funding Shareholder in accordance with Section 8.3. Notwithstanding anything to the contrary contained in this Agreement, for the period such Funding Default shall at any time be or become incapable of time commencing on the date of this Agreement and ending on the date on which the initial Cultivation License for the Delta 3 Assets and Operations is obtained, the Non-Defaulting Shareholder shall only have a right to cause the dilution of the Defaulting Shareholder if the required funding (including without limitation, the amount) set forth in a Contribution Notice or otherwise required pursuant to Section 7.5(b) is included within the Initial Budget, or
(ii) advance all or a portion of the Defaulted Amount on behalf of the Defaulting Shareholder as a loan to being remedied by the Defaulting Shareholder, with the principal amount of such loan (and any overdue interest) bearing interest at all times at a rate per annum equal to the sum of Prime Rate plus 15%, as the same shall change from time to time, or at the maximum rate permitted by Applicable Law, whichever is less, calculated and compounded monthly in arrears until paid in full (either by way of a direct payment from the Defaulting Shareholder to the Non-Defaulting Shareholder or through application of future Distributions pursuant to Section 9.1(c)) (a “Shareholder Loan”) and, for greater certainty, the Shareholder Loan shall be considered to cure any default by the Defaulting Shareholder to fund the required amount.
(b) If the Non-Defaulting Shareholder elects to fund all or a portion of the Defaulted Amount in the manner prescribed in Section 8.2(a)(i), such funding by the Non-Defaulting Shareholder shall be allocated entitled to Share Capital in the same manner as the Share Capital held by the Non-Defaulting Shareholder immediately prior to the funding default.
(c) If the Non-Defaulting Shareholder elects to advance all or deliver a portion notice of the Defaulted Amount on behalf of the Defaulting Shareholder as a loan breach to the Defaulting Shareholder in terms of clause 31.1 and the manner prescribed in Section 8.2(a)(ii), such advance by the Non-Defaulting Shareholder further provisions of clause 31 shall be allocated to Share Capital in the same manner as the Share Capital held by the Defaulting Shareholder immediately prior to the loanapplicable.
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