Non-Payment of Capital Contributions. In the event any Partner fails to pay its share of a Capital Contribution called for under any provision of this Article 4 on the date on which such Capital Contribution is due, such unpaid Capital Contributions shall automatically accrue interest from the date due at the Prime Plus Rate (which interest, once paid, shall not increase the Capital Account of such Partner). In addition, if such default is not cured within 5 days after written notice thereof given by the General Partner has been received by such Partner (a “Defaulting Partner”), all or any part of the following provisions shall apply: (a) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to (i) adopt special allocations of income, gain, loss or deduction or otherwise debit such Defaulting Partner’s Capital Account balance such that such Defaulting Partner’s Capital Account Balance is reduced as soon as possible to an amount equal to 50% of the Capital Account balance existing as of the date of the default (and make a corresponding credit to the respective Capital Account balances of the non-Defaulting Partners as if the credit amount was additional income or gain of the Partnership recognized at such time) and (ii) reduce the applicable Sharing Ratios of such Defaulting Partner (and make a corresponding increase in the Sharing Ratios of the non-Defaulting Partners in proportion to their relative Sharing Ratios) to reflect a reduction in 50% of the Capital Contributions theretofore made by such Defaulting Partner. (b) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the allocations of Net Income and Net Loss and rights to receive distributions set forth in this Agreement such that such Defaulting Partner shall have no additional rights to receive allocations of Net Income from the Partnership and all Partnership distributions that would otherwise be made to such Defaulting Partner shall be paid to the non-Defaulting Partners as otherwise provided herein. (c) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the Agreement to provide that whenever the vote, election, consent or approval of such Defaulting Partner would otherwise be required or permitted under this Agreement, such Defaulting Partner shall not be entitled to participate in such vote, election, consent or approval, and such vote, election, consent or approval shall be calculated as if such Defaulting Partner were not a Partner. (d) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to eliminate such Defaulting Partner’s obligations to make Capital Contributions hereunder, such that such Defaulting Partner will have no additional right to make Capital Contributions to the Partnership pursuant to Section 4.4 and no additional right to subscribe for other Partnership Securities pursuant to Section 4.3. (e) The Partnership may commence legal proceedings against a Defaulting Partner to collect the due and unpaid amount of Capital Contributions, together with interest thereon for the account of the Partnership from the date due at the Prime Plus Rate, plus the costs and expenses of collection (including reasonable attorneys’ fees and expenses). (f) Except as otherwise provided herein, no right, power, or remedy conferred upon the Partnership, the General Partner or the non-Defaulting Partners under this Section 4.5 shall be exclusive, and each such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy, whether conferred under this Section 4.5 or now or hereafter available at law or in equity or by statute or otherwise. Each Defaulting Partner shall be liable for the costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Table of Contents Partnership, the General Partner or the non-Defaulting Partners in enforcing any of the remedies or rights set forth in this Section 4.5. Each Partner acknowledges by its execution of this Agreement that it has been admitted to the Partnership in reliance upon its agreement that the Partnership may exercise any and all rights, powers and remedies provided for in this Section 4.5 in accordance with the terms herein or otherwise available at law or in equity. (g) The Partners agree (i) that the damages suffered by the Partnership as the result of a failure by a Partner to make a Capital Contribution that is required by this Agreement cannot be estimated with reasonable accuracy, (ii) that the foregoing provisions of this Section 4.5 shall act as liquidated damages for the default by a Defaulting Partner (which each Partner hereby agrees are reasonable), and (iii) that the foregoing provisions of this Section 4.5 are also agreed upon by the Partners in reliance on section 17-502(c) of the Delaware Act. (h) If a Defaulting Partner is a Limited Partner, the remaining Limited Partners agree to make, in proportion to their respective Capital Contributions, the Capital Contribution not made by such Defaulting Partner within 10 Business Days of notice to do so (or sooner if possible, if necessary, in order to permit the Partnership to consummate a transaction that cannot be reasonably delayed). In no event shall any Limited Partner be required to contribute more than the maximum amount that such Limited Partner is obligated to contribute pursuant to Section 4.4.
Appears in 2 contracts
Samples: Limited Partnership Agreement (Ensource Energy Income Fund LP), Limited Partnership Agreement (Ensource Energy Income Fund LP)
Non-Payment of Capital Contributions. In the event any Partner fails to pay its share of a Capital Contribution called for under any provision of this Article 4 on the date on which such Capital Contribution is due, such unpaid Capital Contributions shall automatically accrue interest from the date due at the Prime Plus Rate (which interest, once paid, shall not increase the Capital Account of such Partner). In addition, if such default is not cured within 5 days after written notice thereof given by the General Partner has been received by such Partner (a “Defaulting Partner”), all or any part of the following provisions shall apply:
(a) The Except as otherwise provided in the following sentence, the Partnership may elect, upon notice shall have the right to a Defaulting Partner by pursue the General Partner, to (i) adopt special allocations of income, gain, loss remedies described in this Section 3.6 and any remedy existing at law or deduction or otherwise debit such Defaulting Partner’s Capital Account balance such that such Defaulting Partner’s Capital Account Balance is reduced as soon as possible to an amount equal to 50% in equity for the collection of the Capital Account balance existing as of the date of the default (and make a corresponding credit to the respective Capital Account balances of the non-Defaulting Partners as if the credit unpaid amount was additional income or gain of the Partnership recognized at such time) and (ii) reduce the applicable Sharing Ratios of such Defaulting Partner (and make a corresponding increase in the Sharing Ratios of the non-Defaulting Partners in proportion to their relative Sharing Ratios) to reflect a reduction in 50% of the Capital Contributions theretofore agreed to be made in Sections 3.1 and 3.2 or hereafter agreed to be made in accordance with Section 3.3, including the prosecution of a suit against a defaulting Partner. In the event of a default by such Defaulting a Partner of its obligation to make Capital Contributions with respect to its allocable share hereunder of Hedge Costs, the provisions of subsection (d) below shall be the exclusive remedy of the Partnership and the other Partner.
(b) In the event that the Limited Partner fails or refuses to make when due its share of Capital Contributions, the General Partner shall be entitled (but shall not be obligated) to make such Capital Contributions to the Partnership which the Limited Partner is obligated to make and the amount so advanced shall be treated as a loan to the Limited Partner and shall bear interest from the date of such advance at a rate equal to the Agreed Rate. The General Partner shall notify the Limited Partner of any such advance and request payment by the Limited Partner of the amount so advanced, together with interest thereon from the date of the advance. If the Limited Partner fails or refuses to pay to the General Partner the amount so advanced, together with interest thereon from the date of the advance, and if such failure or refusal persists for a period of 30 days following notice from the General Partner to the Limited Partner (such occurrence being called herein an "Event of Default"), the General Partner shall be entitled to proceed under this Section 3.6(b). In addition to the rights in Section 3.6(a), the Limited Partner hereby grants to the Partnership may electa lien upon and security interest in the Limited Partner's interest in the Partnership and in or to all assets attributable to and proceeds of and from such interest in the Partnership to secure the payment of contributions required under this Agreement, upon notice to a Defaulting Partner by and authorizes the General Partner, upon the occurrence of an Event of Default, if it elects to amend proceed under this alternative, to foreclose such lien or security interest in any manner provided for by the allocations laws of Net Income and Net Loss and the State of Texas for the foreclosure of such lien or security interest (including the exercise of the rights to receive distributions set forth in of a secured party under the Texas Uniform Commercial Code). If the General Partner elects this Agreement such that such Defaulting Partner shall have no additional rights to receive allocations of Net Income from alternative, the Partnership and all Partnership distributions that would otherwise be made to such Defaulting Limited Partner shall be paid liable for all costs and expenses of the General Partner in instituting and prosecuting such suit or foreclosing such lien or security interest, including all reasonable attorneys' fees expended in connection therewith. The Limited Partner hereby agrees that the General Partner may file one or more financing statements with respect to the security interest granted hereby in order to perfect such security interest, and the Limited Partner hereby agrees to execute such financing statements at the request of the General Partner. The Limited Partner further hereby appoints the General Partner as its agent and attorney-in-fact for the purpose of signing and filing any such financing statements, which appointment is coupled with an interest and expressly made irrevocable. In the event of a non-Defaulting judicial foreclosure, the proceeds of the disposition of the Partnership interest of the Limited Partner shall be applied as follows: (i) first, to the reasonable expenses incurred by the Partnership in collecting such proceeds; and (ii) next, to the satisfaction of the portion of the Limited Partner's contribution then due. The Limited Partner shall be liable for any deficiency, and the General Partner shall account to the Limited Partner for any surplus. Any purchaser of the Limited Partner's interest in the Partnership shall assume the obligations of the Limited Partner under this Agreement and shall succeed to the right of the Limited Partner as to the allocation of profits and losses of, and as to distributions from, the Partnership thereafter. The defaulting Limited Partner hereby grants the General Partner an irrevocable special power of attorney, coupled with an interest, which shall survive the dissolution, bankruptcy, or legal disability of the Limited Partner, to take all actions necessary on its behalf to sell, assign or transfer the Partnership interest of the Limited Partner to such person or persons as shall acquire such Partnership interest as provided in this Section 3.6(b) should an Event of Default be deemed to have occurred with respect to the Limited Partner. In the event that the General Partner elects to foreclose upon the Limited Partner's interest in the Partnership, the Partners as otherwise provided hereinagree that 30 days prior notice shall be reasonable notice of any proposed public or private foreclosure sale. Notwithstanding the foregoing, the General Partner shall not foreclose upon the interest of the Limited Partner in the Partnership if the Event of Default giving rise to the exercise of remedies under this Section 3.6 arises out of a bona fide dispute regarding the interpretation or implementation of this Agreement.
(c) The Partnership may electretain any revenues otherwise distributable to the Limited Partner pursuant to this Agreement in an amount equal to the amount the Limited Partner failed or refused to contribute as required pursuant to the terms of this Agreement, upon notice together with interest on such past-due amounts at a rate equal to a Defaulting the Agreed Rate. Any amount so withheld shall be deemed, for all purposes of this Agreement, to have been distributed to the Limited Partner and, other than that portion of such amounts representing interest, be deemed to have been recontributed by the Limited Partner to the capital of the Partnership for the purposes for which contributions were initially requested. If any dispute as to whether an Event of Default existed is resolved in favor of the Limited Partner, then the General Partner shall pay to the Partnership for distribution to the Limited Partner an amount equal to any amounts wrongly paid by the Limited Partner to the Partnership which should have instead been paid to the Partnership by the General Partner, or any amounts distributed by the Partnership to amend the Agreement General Partner instead of the Limited Partner, in connection with such Event of Default together with interest thereon at a rate equal to provide that whenever the voteAgreed Rate, electionand all costs and expenses of the Limited Partner in resolving such dispute, consent or approval including all attorneys' fees expended in connection therewith. The General Partner shall give notice of such Defaulting its election of the alternatives listed above to the Limited Partner, and if the General Partner would otherwise elects the alternative provided under Section 3.6(a) and/or Section 3.6(b), the General Partner shall be required or permitted free at any time also to proceed under this Agreement, such Defaulting Partner shall not be entitled to participate in such vote, election, consent or approval, and such vote, election, consent or approval shall be calculated as if such Defaulting Partner were not a PartnerSection 3.6(c).
(d) The Partnership may elect, upon notice to If a Defaulting Partner by (the General Partner, to eliminate such "Defaulting Partner’s obligations to make Capital Contributions hereunder, such that such Defaulting Partner will have no additional right ") fails or refuses to make Capital Contributions to the Partnership pursuant hereunder when due to Section 4.4 pay its allocable share hereunder of Hedge Costs and no additional right the other Partner (the "Contributing Partner") in the Defaulting Partner's stead makes such Capital Contributions to subscribe for other Partnership Securities pursuant to Section 4.3.
(e) The Partnership may commence legal proceedings against a Defaulting Partner to collect the due and unpaid amount of Capital Contributions, together with interest thereon for the account of the Partnership from the date due at the Prime Plus Rate, plus the costs and expenses of collection (including reasonable attorneys’ fees and expenses).
(f) Except as otherwise provided herein, no right, power, or remedy conferred upon the Partnership, the General Partner or the non-Defaulting Partners under this Section 4.5 shall be exclusive, and each such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy, whether conferred under this Section 4.5 or now or hereafter available at law or in equity or by statute or otherwise. Each Defaulting Partner shall be liable for the costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Table of Contents Partnership, the General Partner or the non-Defaulting Partners in enforcing any of the remedies or rights set forth in this Section 4.5. Each Partner acknowledges by its execution of this Agreement that it has been admitted to the Partnership in reliance upon its agreement that the Partnership may exercise any and all rights, powers and remedies provided for in this Section 4.5 in accordance with then the terms herein or otherwise available at law or in equity.
(g) The Partners agree (i) that the damages suffered by the Partnership as the result of a failure by a Partner to make a Capital Contribution that is required by this Agreement cannot be estimated with reasonable accuracy, (ii) that the foregoing and provisions of this Section 4.5 3.6(d) shall act be operative. Specifically, in the instance described above, the Contributing Partner may exercise either of the following options:
(i) The Contributing Partner may treat the payment by it of the Defaulting Partner's Capital Contributions as liquidated damages for a loan to the default by Defaulting Partner, which loan shall bear interest from the date the payment is made at a rate equal to the Agreed Rate. Further, as between the Contributing Partner and the Defaulting Partner (which each Partner hereby agrees are reasonable)Partner, the terms and (iiiprovisions of Section 3.6(b) shall be applicable, mutatis mutandis, except that the foregoing provisions last sentence of this such Section 4.5 are also agreed upon by the Partners in reliance on section 17-502(c) of the Delaware Actshall be disregarded.
(hii) If a The Contributing Partner may treat the payment by it of the Defaulting Partner's Capital Contributions as Capital Contributions from the Contributing Partner, in which case the Contributing Partner shall be entitled to receive all of the distributions that would otherwise be paid to the Defaulting Partner hereunder until that point in time at which the Contributing Partner has received from such distributions an amount equal to 300% of the amount of the Capital Contributions made by the Contributing Partner in the Defaulting Partner's stead; provided, however, that if this option is a Limited Partnerelected, the remaining Limited Partners agree to make, in proportion to their respective Defaulting Partner's share of the Hedge Costs paid with such Capital Contributions, and any deductions or losses relating thereto for state or federal income tax purposes, shall be allocated to the Capital Contribution not Contributing Partner; and provided further, that the Defaulting Partner's share of Partnership revenues, and any income or gain relating thereto for state or federal income tax purposes, shall be allocated to the Contributing Partner until the revenues so allocated equal the distributions to be made by such Defaulting to the Contributing Partner within 10 Business Days of notice to do so under this paragraph (or sooner if possible, if necessary, in order to permit the Partnership to consummate a transaction that cannot be reasonably delayedii). In no event shall any Limited Partner be required to contribute more than the maximum amount that such Limited Partner is obligated to contribute pursuant to Section 4.4.
Appears in 1 contract
Samples: Limited Partnership Agreement (Magnum Hunter Resources Inc)
Non-Payment of Capital Contributions. In the event any Partner Class A Member (a "Defaulting Member") fails to pay its share the full amount of a Capital Contribution capital contribution called for under any provision of this Article 4 Section 2.7 on the date on which such Capital Contribution capital contribution is due, such unpaid Capital Contributions shall automatically accrue interest from the date due at the Prime Plus Rate (which interest, once paid, shall not increase the Capital Account of such Partner). In addition, if and such default is not cured by such Class A Member within 5 10 days after written notice thereof given by the General Partner has been received by such Partner (a “Defaulting Partner”)Manager, all or any part of the following provisions shall apply:apply:
(a) The Partnership may elect, upon notice to a Defaulting Partner by 2.10.1 Whenever the General Partner, to (i) adopt special allocations of income, gain, loss vote or deduction or otherwise debit such Defaulting Partner’s Capital Account balance such that such Defaulting Partner’s Capital Account Balance is reduced as soon as possible to an amount equal to 50% consent of the Capital Account balance existing as of the date of the default (and make a corresponding credit to the respective Capital Account balances of the non-Defaulting Partners as if the credit amount was additional income or gain of the Partnership recognized at such time) and (ii) reduce the applicable Sharing Ratios of such Defaulting Partner (and make a corresponding increase in the Sharing Ratios of the non-Defaulting Partners in proportion to their relative Sharing Ratios) to reflect a reduction in 50% of the Capital Contributions theretofore made by such Defaulting Partner.
(b) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the allocations of Net Income and Net Loss and rights to receive distributions set forth in this Agreement such that such Defaulting Partner shall have no additional rights to receive allocations of Net Income from the Partnership and all Partnership distributions that would otherwise be made to such Defaulting Partner shall be paid to the non-Defaulting Partners as otherwise provided herein.
(c) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the Agreement to provide that whenever the vote, election, consent or approval of such Defaulting Partner Member would otherwise be required or permitted under this Agreement, such the Defaulting Partner Member shall not be entitled to participate in such vote, election, consent vote or approvalconsent, and such vote, election, vote or consent or approval shall be calculated as if such Defaulting Partner Member were not a PartnerMember.
(d) 2.10.2 The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to eliminate such Defaulting Partner’s obligations to make Capital Contributions hereunder, such that such Defaulting Partner will have no additional right to make Capital Contributions to the Partnership pursuant to Section 4.4 and no additional right to subscribe for other Partnership Securities pursuant to Section 4.3.
(e) The Partnership Manager may commence legal proceedings against a the Defaulting Partner Member to collect the due and unpaid amount of Capital Contributionscapital contributions, together with interest thereon for the account of the Partnership from the date due at the Prime Plus Default Rate, plus the costs and expenses of collection (including reasonable attorneys’ ' fees and expenses). For purposes of this Agreement, the "Default Rate" means a rate per annum that is equal to the lesser of (i) a rate that is five percent above the prime rate of interest of the Company's primary bank, as announced or published by such bank from time to time (adjusted from time to time to reflect any changes in such rate determined hereunder), or (ii) the maximum rate from time to time permitted by applicable law.
2.10.3 The Manager may, but shall not be obligated to, advance all or a portion of the Defaulting Member's unpaid capital contribution to the Company on behalf of the Defaulting Member, and such advance shall be repaid by the Defaulting Member to the Manager with interest commencing on the date of the advance at the Default Rate. To the extent the Manager advances funds to the Company on behalf of a Defaulting Member, all Company distributions that would otherwise be made to the Defaulting Member shall be paid to the Manager (fwith any such amounts being applied first against accrued but unpaid interest and then against principal) until all amounts payable by the Defaulting Member to the Manager under this Section 2.10.3 (including interest) have been paid in full.
2.10.4 The Manager may elect, upon notice to the Defaulting Member, to reduce the Defaulting Member's (i) capital account balance and Undistributed Capital (as defined in Exhibit B) by an amount equal to 50 percent of the respective amount existing as of the date of the default and (ii) Capital Commitment to an amount equal to the amount of capital contributions theretofore made by such Defaulting Member. Thereupon, the unpaid Capital Commitment of the Defaulting Member shall be zero, the Defaulting Member shall not be obligated to make any further capital contributions, the number of Class A Units and Class A Membership Percentage of such Defaulting Member shall be redetermined as of the date of such default to reflect the new Capital Commitment of the Defaulting Member, and the Manager shall revise Exhibit A to reflect the reduction of the Capital Commitment, number of Class A Units, and Class A Membership Percentage of the Defaulting Member. The Members agree (A) that the damages suffered by the Company as the result of a failure by a Member to pay a capital contribution to the Company that is required by this Agreement cannot be estimated with reasonable accuracy and (B) that the foregoing provisions of this Section 2.10.4 shall act as liquidated damages for the default by the Defaulting Member (which each Member hereby agrees are reasonable).
2.10.5 The Manager may offer to all the nondefaulting Class A Members, pro rata in proportion to their Class A Membership Percentages, the option of purchasing the Defaulting Member's Class A Units on such terms as the Manager determines, in its sole discretion, represent the reasonable fair market value of such interest, but in no event less than the purchaser's agreement to assume the Defaulting Member's obligation to pay the unpaid capital contribution plus that portion of the Defaulting Member's Capital Commitment then remaining.
2.10.6 At the election of the Manager, distributions of the Company otherwise payable to the Defaulting Member hereunder shall not be paid to the Defaulting Member, but instead shall be applied against the amount of the unpaid capital contribution (plus interest at the Default Rate and related costs); provided, that any amounts so applied shall be deemed to have been distributed to the Defaulting Member for purposes of Section 3.2.
2.10.7 Except as otherwise provided herein, no right, power, or remedy conferred upon the Partnership, the General Partner Company or the non-Defaulting Partners Manager under this Section 4.5 2.10 shall be exclusive, and each such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy, whether conferred under this Section 4.5 2.10 or now or hereafter available at law or in equity or by statute or otherwise. Each The Defaulting Partner Member shall be liable for the costs and expenses (including reasonable attorneys’ ' fees and expenses) incurred by the Table of Contents Partnership, the General Partner Company or the non-Defaulting Partners Manager in enforcing any of the remedies or rights set forth in this Section 4.52.10. Each Partner Member acknowledges by its execution of this Agreement that it has been admitted to the Partnership Company in reliance upon its agreement that the Partnership Company and the Manager may have and exercise any and all rights, powers and remedies provided for in this Section 4.5 in accordance with the terms herein 2.10 or otherwise available at law or in equity.
(g) The Partners agree (i) that the damages suffered equity or by the Partnership as the result of a failure by a Partner to make a Capital Contribution that is required by this Agreement cannot be estimated with reasonable accuracy, (ii) that the foregoing provisions of this Section 4.5 shall act as liquidated damages for the default by a Defaulting Partner (which each Partner hereby agrees are reasonable)statute or otherwise, and (iii) that furthermore specifically acknowledges and agrees that, notwithstanding anything to the foregoing provisions of contrary in this Section 4.5 are also agreed upon by Agreement, the Partners Manager shall have the right and power to take such other action as it in reliance on section 17-502(c) its sole discretion may deem necessary or advisable to protect the interests of the Delaware ActCompany and the other Members upon a Member's default.
(h) If a Defaulting Partner is a Limited Partner, the remaining Limited Partners agree to make, in proportion to their respective Capital Contributions, the Capital Contribution not made by such Defaulting Partner within 10 Business Days of notice to do so (or sooner if possible, if necessary, in order to permit the Partnership to consummate a transaction that cannot be reasonably delayed). In no event shall any Limited Partner be required to contribute more than the maximum amount that such Limited Partner is obligated to contribute pursuant to Section 4.4.
Appears in 1 contract
Samples: Operating Agreement
Non-Payment of Capital Contributions. In the event any Partner fails to pay its share of a Capital Contribution called for under any provision of this Article 4 on the date on which such Capital Contribution is due, such unpaid Capital Contributions shall automatically accrue interest from the date due at the Prime Plus Rate (which interest, once paid, shall not increase the Capital Account of such Partner). In addition, if such default is not cured within 5 days after written notice thereof given by the General Partner has been received by such Partner (a “Defaulting Partner”), all or any part of the following provisions shall apply:
(a) The Except as otherwise provided in the following sentence, the Partnership may elect, upon notice shall have the right to a Defaulting Partner by pursue the General Partner, to (i) adopt special allocations of income, gain, loss remedies described in this Section 3.6 and any remedy existing at law or deduction or otherwise debit such Defaulting Partner’s Capital Account balance such that such Defaulting Partner’s Capital Account Balance is reduced as soon as possible to an amount equal to 50% in equity for the collection of the Capital Account balance existing as of the date of the default (and make a corresponding credit to the respective Capital Account balances of the non-Defaulting Partners as if the credit unpaid amount was additional income or gain of the Partnership recognized at such time) and (ii) reduce the applicable Sharing Ratios of such Defaulting Partner (and make a corresponding increase in the Sharing Ratios of the non-Defaulting Partners in proportion to their relative Sharing Ratios) to reflect a reduction in 50% of the Capital Contributions theretofore agreed to be made in Section 3.1 and Section 3.2 or hereafter agreed to be made in accordance with Section 3.3, including the prosecution of a suit against a defaulting Partner. In the event of a default by such Defaulting the Limited Partner of its obligation to make Capital Contributions with respect to Hedge Costs, the provisions of subsection (d) below and any guaranty of General Electric Capital Corporation under Section 5.7 shall be the exclusive remedies of the Partnership and the General Partner.
(b) In the event that the Limited Partner fails or refuses to make when due its share of Capital Contributions, the General Partner shall be entitled (but shall not be obligated) to make such Capital Contributions to the Partnership which the Limited Partner is obligated to make and the amount so advanced shall be treated as a loan from the General Partner to the Limited Partner and shall bear interest from the date of such advance at a rate equal to the Agreed Rate. The General Partner shall notify the Limited Partner of any such advance and request payment by the Limited Partner of the amount so advanced, together with interest thereon from the date of the advance. If the Limited Partner fails or refuses to pay to the General Partner the amount so advanced, together with interest thereon from the date of the advance, and if such failure or refusal persists for a period of 30 days following notice from the General Partner to the Limited Partner, it shall be deemed an “Event of Default”) hereunder.
(c) Upon the occurrence of an Event of Default, the Partnership may electretain any revenues otherwise distributable to the Limited Partner pursuant to this Agreement in an amount equal to the amount the Limited Partner failed or refused to contribute as required pursuant to the terms of this Agreement, upon notice together with interest on such past-due amounts at a rate equal to the Agreed Rate. Any amount so withheld shall be deemed, for all purposes of this Agreement, to have been distributed to the Limited Partner and, other than that portion of such amounts representing interest, be deemed to have been recontributed by the Limited Partner to the capital of the Partnership for the purposes for which contributions were initially requested. To the extent that the General Partner has advanced funds to the Partnership as a Defaulting result of the default of the Limited Partner, the General Partner shall be entitled to be reimbursed and paid the amount of such advance plus interest at the Agreed Rate from the amounts so withheld from the Limited Partner. If any dispute as to whether an Event of Default existed is resolved in favor of the Limited Partner, then the General Partner shall pay to the Partnership for distribution to the Limited Partner an amount equal to any amounts wrongly paid by the Limited Partner to the Partnership which should have instead been paid to the Partnership by the General Partner, to amend the allocations of Net Income and Net Loss and rights to receive distributions set forth in this Agreement such that such Defaulting Partner shall have no additional rights to receive allocations of Net Income from or any amounts distributed by the Partnership to the General Partner instead of the Limited Partner, in connection with such Event of Default together with interest thereon at a rate equal to the Agreed Rate, and all Partnership distributions that would otherwise be made to costs and expenses of the Limited Partner in resolving such Defaulting dispute, including all attorneys’ fees expended in connection therewith. The General Partner shall be paid free at any time also to the non-Defaulting Partners as otherwise provided herein.
(c) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the Agreement to provide that whenever the vote, election, consent or approval of such Defaulting Partner would otherwise be required or permitted proceed under this Agreement, such Defaulting Partner shall not be entitled Section 3.6(c) in addition to participate in such vote, election, consent any other remedies hereunder or approval, and such vote, election, consent or approval shall be calculated as if such Defaulting Partner were not a Partnerprovided by law.
(d) The Partnership may elect, upon notice to If a Defaulting Partner by (the General Partner, to eliminate such “Defaulting Partner’s obligations to make Capital Contributions hereunder, such that such Defaulting Partner will have no additional right ”) fails or refuses to make Capital Contributions to the Partnership pursuant hereunder when due to pay its allocable share hereunder of Hedge Costs and the other Partner (the “Contributing Partner”) in the Defaulting Partner’s stead makes such Capital Contributions to the Partnership, then the terms and provisions of this Section 4.4 3.6(d) shall be operative. Specifically, in the instance described above, the Contributing Partner may exercise either of the following options:
(i) The Contributing Partner may treat the payment by it of the Defaulting Partner’s Capital Contributions as a loan to the Defaulting Partner, which loan shall bear interest from the date the payment is made at a rate equal to the Agreed Rate. Further, as between the Contributing Partner and no additional right to subscribe for other Partnership Securities pursuant to the Defaulting Partner, the terms and provisions of Section 4.33.6(b) and Section 3.6(c) shall be applicable, mutatis mutandis.
(eii) The Partnership Contributing Partner may commence legal proceedings against a treat the payment by it of the Defaulting Partner’s Capital Contributions as Capital Contributions from the Contributing Partner, in which case the Contributing Partner shall be entitled to receive all of the distributions that would otherwise be paid to the Defaulting Partner hereunder until that point in time at which the Contributing Partner has received from such distributions an amount equal to collect 300% of the due and unpaid amount of the Capital Contributions made by the Contributing Partner in the Defaulting Partner’s stead; provided, however, that if this option is elected, the Defaulting Partner’s share of the Hedge Costs paid with such Capital Contributions, together with interest thereon and any deductions or losses relating thereto for state or federal income tax purposes, shall be allocated to the account Contributing Partner; and provided further, that the Defaulting Partner’s share of Partnership revenues, and any income or gain relating thereto for state or federal income tax purposes, shall be allocated to the Partnership from Contributing Partner until the date due at revenues so allocated equal the Prime Plus Rate, plus distributions to be made to the costs and expenses of collection Contributing Partner under this paragraph (including reasonable attorneys’ fees and expensesii).
(fiii) Except as otherwise provided herein, no right, power, or remedy conferred upon If the PartnershipContributing Partner borrows funds in order to make the payment required by the Defaulting Partner, the General Contributing Partner or the non-Defaulting Partners may pledge its right to receive distributions under this Section 4.5 shall be exclusive, and each such right, power, or remedy shall be cumulative and in addition 3.6(d) which would have been made to every other right, power, or remedy, whether conferred under this Section 4.5 or now or hereafter available at law or in equity or by statute or otherwise. Each the Defaulting Partner shall be liable for the costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Table of Contents Partnership, the General Partner or the non-Defaulting Partners in enforcing any of the remedies or rights set forth in this Section 4.5. Each Partner acknowledges by its execution of this Agreement that it has been admitted to the Partnership in reliance upon its agreement that the Partnership may exercise any and all rights, powers and remedies provided for in this Section 4.5 in accordance with the terms herein or otherwise available at law or in equitysecure such borrowings.
(g) The Partners agree (i) that the damages suffered by the Partnership as the result of a failure by a Partner to make a Capital Contribution that is required by this Agreement cannot be estimated with reasonable accuracy, (ii) that the foregoing provisions of this Section 4.5 shall act as liquidated damages for the default by a Defaulting Partner (which each Partner hereby agrees are reasonable), and (iii) that the foregoing provisions of this Section 4.5 are also agreed upon by the Partners in reliance on section 17-502(c) of the Delaware Act.
(h) If a Defaulting Partner is a Limited Partner, the remaining Limited Partners agree to make, in proportion to their respective Capital Contributions, the Capital Contribution not made by such Defaulting Partner within 10 Business Days of notice to do so (or sooner if possible, if necessary, in order to permit the Partnership to consummate a transaction that cannot be reasonably delayed). In no event shall any Limited Partner be required to contribute more than the maximum amount that such Limited Partner is obligated to contribute pursuant to Section 4.4.
Appears in 1 contract
Non-Payment of Capital Contributions. In the event any Partner Class A Member (a "Defaulting Member") fails to pay its share the full amount of a Capital Contribution capital contribution called for under any provision of this Article 4 Section 2.7 on the date on which such Capital Contribution capital contribution is due, such unpaid Capital Contributions shall automatically accrue interest from the date due at the Prime Plus Rate (which interest, once paid, shall not increase the Capital Account of such Partner). In addition, if and such default is not cured by such Class A Member within 5 10 days after written notice thereof given by the General Partner has been received by such Partner (a “Defaulting Partner”)Manager, all or any part of the following provisions shall apply:
(a) The Partnership may elect, upon notice to a Defaulting Partner by 2.10.1 Whenever the General Partner, to (i) adopt special allocations of income, gain, loss vote or deduction or otherwise debit such Defaulting Partner’s Capital Account balance such that such Defaulting Partner’s Capital Account Balance is reduced as soon as possible to an amount equal to 50% consent of the Capital Account balance existing as of the date of the default (and make a corresponding credit to the respective Capital Account balances of the non-Defaulting Partners as if the credit amount was additional income or gain of the Partnership recognized at such time) and (ii) reduce the applicable Sharing Ratios of such Defaulting Partner (and make a corresponding increase in the Sharing Ratios of the non-Defaulting Partners in proportion to their relative Sharing Ratios) to reflect a reduction in 50% of the Capital Contributions theretofore made by such Defaulting Partner.
(b) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the allocations of Net Income and Net Loss and rights to receive distributions set forth in this Agreement such that such Defaulting Partner shall have no additional rights to receive allocations of Net Income from the Partnership and all Partnership distributions that would otherwise be made to such Defaulting Partner shall be paid to the non-Defaulting Partners as otherwise provided herein.
(c) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the Agreement to provide that whenever the vote, election, consent or approval of such Defaulting Partner Member would otherwise be required or permitted under this Agreement, such the Defaulting Partner Member shall not be entitled to participate in such vote, election, consent vote or approvalconsent, and such vote, election, vote or consent or approval shall be calculated as if such Defaulting Partner Member were not a PartnerMember.
(d) 2.10.2 The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to eliminate such Defaulting Partner’s obligations to make Capital Contributions hereunder, such that such Defaulting Partner will have no additional right to make Capital Contributions to the Partnership pursuant to Section 4.4 and no additional right to subscribe for other Partnership Securities pursuant to Section 4.3.
(e) The Partnership Manager may commence legal proceedings against a the Defaulting Partner Member to collect the due and unpaid amount of Capital Contributionscapital contributions, together with interest thereon for the account of the Partnership from the date due at the Prime Plus Default Rate, plus the costs and expenses of collection (including reasonable attorneys’ ' fees and expenses). For purposes of this Agreement, the "Default Rate" means a rate per annum that is equal to the lesser of (i) a rate that is five percent above the prime rate of interest of the Company's primary bank, as announced or published by such bank from time to time (adjusted from time to time to reflect any changes in such rate determined hereunder), or (ii) the maximum rate from time to time permitted by applicable law.
2.10.3 The Manager may, but shall not be obligated to, advance all or a portion of the Defaulting Member's unpaid capital contribution to the Company on behalf of the Defaulting Member, and such advance shall be repaid by the Defaulting Member to the Manager with interest commencing on the date of the advance at the Default Rate. To the extent the Manager advances funds to the Company on behalf of a Defaulting Member, all Company distributions that would otherwise be made to the Defaulting Member shall be paid to the Manager (fwith any such amounts being applied first against accrued but unpaid interest and then against principal) until all amounts payable by the Defaulting Member to the Manager under this Section 2.10.3 (including interest) have been paid in full.
2.10.4 The Manager may elect, upon notice to the Defaulting Member, to reduce the Defaulting Member's (i) capital account balance and Undistributed Capital (as defined in Exhibit B) by an amount equal to 50 percent of the respective amount existing as of the date of the default and (ii) Capital Commitment to an amount equal to the amount of capital contributions theretofore made by such Defaulting Member. Thereupon, the unpaid Capital Commitment of the Defaulting Member shall be zero, the Defaulting Member shall not be obligated to make any further capital contributions, the number of Class A Units and Class A Membership Percentage of such Defaulting Member shall be redetermined as of the date of such default to reflect the new Capital Commitment of the Defaulting Member, and the Manager shall revise Exhibit A to reflect the reduction of the Capital Commitment, number of Class A Units, and Class A Membership Percentage of the Defaulting Member. The Members agree (A) that the damages suffered by the Company as the result of a failure by a Member to pay a capital contribution to the Company that is required by this Agreement cannot be estimated with reasonable accuracy and (B) that the foregoing provisions of this Section 2.10.4 shall act as liquidated damages for the default by the Defaulting Member (which each Member hereby agrees are reasonable).
2.10.5 The Manager may offer to all the nondefaulting Class A Members, pro rata in proportion to their Class A Membership Percentages, the option of purchasing the Defaulting Member's Class A Units on such terms as the Manager determines, in its sole discretion, represent the reasonable fair market value of such interest, but in no event less than the purchaser's agreement to assume the Defaulting Member's obligation to pay the unpaid capital contribution plus that portion of the Defaulting Member's Capital Commitment then remaining.
2.10.6 At the election of the Manager, distributions of the Company otherwise payable to the Defaulting Member hereunder shall not be paid to the Defaulting Member, but instead shall be applied against the amount of the unpaid capital contribution (plus interest at the Default Rate and related costs); provided, that any amounts so applied shall be deemed to have been distributed to the Defaulting Member for purposes of Section 3.2.
2.10.7 Except as otherwise provided herein, no right, power, or remedy conferred upon the Partnership, the General Partner Company or the non-Defaulting Partners Manager under this Section 4.5 2.10 shall be exclusive, and each such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy, whether conferred under this Section 4.5 2.10 or now or hereafter available at law or in equity or by statute or otherwise. Each The Defaulting Partner Member shall be liable for the costs and expenses (including reasonable attorneys’ ' fees and expenses) incurred by the Table of Contents Partnership, the General Partner Company or the non-Defaulting Partners Manager in enforcing any of the remedies or rights set forth in this Section 4.52.10. Each Partner Member acknowledges by its execution of this Agreement that it has been admitted to the Partnership Company in reliance upon its agreement that the Partnership Company and the Manager may have and exercise any and all rights, powers and remedies provided for in this Section 4.5 in accordance with the terms herein 2.10 or otherwise available at law or in equity.
(g) The Partners agree (i) that the damages suffered equity or by the Partnership as the result of a failure by a Partner to make a Capital Contribution that is required by this Agreement cannot be estimated with reasonable accuracy, (ii) that the foregoing provisions of this Section 4.5 shall act as liquidated damages for the default by a Defaulting Partner (which each Partner hereby agrees are reasonable)statute or otherwise, and (iii) that furthermore specifically acknowledges and agrees that, notwithstanding anything to the foregoing provisions of contrary in this Section 4.5 are also agreed upon by Agreement, the Partners Manager shall have the right and power to take such other action as it in reliance on section 17-502(c) its sole discretion may deem necessary or advisable to protect the interests of the Delaware ActCompany and the other Members upon a Member's default.
(h) If a Defaulting Partner is a Limited Partner, the remaining Limited Partners agree to make, in proportion to their respective Capital Contributions, the Capital Contribution not made by such Defaulting Partner within 10 Business Days of notice to do so (or sooner if possible, if necessary, in order to permit the Partnership to consummate a transaction that cannot be reasonably delayed). In no event shall any Limited Partner be required to contribute more than the maximum amount that such Limited Partner is obligated to contribute pursuant to Section 4.4.
Appears in 1 contract
Samples: Operating Agreement
Non-Payment of Capital Contributions. In the event any Partner Class A Member (a "Defaulting Member") fails to pay its share the full amount of a Capital Contribution capital contribution called for under any provision of this Article 4 Section 2.7 on the date on which such Capital Contribution capital contribution is due, such unpaid Capital Contributions shall automatically accrue interest from the date due at the Prime Plus Rate (which interest, once paid, shall not increase the Capital Account of such Partner). In addition, if and such default is not cured by such Class A Member within 5 10 days after written notice thereof given by the General Partner has been received by such Partner (a “Defaulting Partner”)Manager, all or any part of the following provisions shall apply:
(a) The Partnership may elect, upon notice to a Defaulting Partner by : Whenever the General Partner, to (i) adopt special allocations of income, gain, loss vote or deduction or otherwise debit such Defaulting Partner’s Capital Account balance such that such Defaulting Partner’s Capital Account Balance is reduced as soon as possible to an amount equal to 50% consent of the Capital Account balance existing as of the date of the default (and make a corresponding credit to the respective Capital Account balances of the non-Defaulting Partners as if the credit amount was additional income or gain of the Partnership recognized at such time) and (ii) reduce the applicable Sharing Ratios of such Defaulting Partner (and make a corresponding increase in the Sharing Ratios of the non-Defaulting Partners in proportion to their relative Sharing Ratios) to reflect a reduction in 50% of the Capital Contributions theretofore made by such Defaulting Partner.
(b) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the allocations of Net Income and Net Loss and rights to receive distributions set forth in this Agreement such that such Defaulting Partner shall have no additional rights to receive allocations of Net Income from the Partnership and all Partnership distributions that would otherwise be made to such Defaulting Partner shall be paid to the non-Defaulting Partners as otherwise provided herein.
(c) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the Agreement to provide that whenever the vote, election, consent or approval of such Defaulting Partner Member would otherwise be required or permitted under this Agreement, such the Defaulting Partner Member shall not be entitled to participate in such vote, election, consent vote or approvalconsent, and such vote, election, vote or consent or approval shall be calculated as if such Defaulting Partner Member were not a Partner.
(d) Member. The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to eliminate such Defaulting Partner’s obligations to make Capital Contributions hereunder, such that such Defaulting Partner will have no additional right to make Capital Contributions to the Partnership pursuant to Section 4.4 and no additional right to subscribe for other Partnership Securities pursuant to Section 4.3.
(e) The Partnership Manager may commence legal proceedings against a the Defaulting Partner Member to collect the due and unpaid amount of Capital Contributionscapital contributions, together with interest thereon for the account of the Partnership from the date due at the Prime Plus Default Rate, plus the costs and expenses of collection (including reasonable attorneys’ ' fees and expenses).
. For purposes of this Agreement, the "Default Rate" means a rate per annum that is equal to the lesser of (fi) a rate that is five percent above the prime rate of interest of the Company's primary bank, as announced or published by such bank from time to time (adjusted from time to time to reflect any changes in such rate determined hereunder), or (ii) the maximum rate from time to time permitted by applicable law. The Manager may, but shall not be obligated to, advance all or a portion of the Defaulting Member's unpaid capital contribution to the Company on behalf of the Defaulting Member, and such advance shall be repaid by the Defaulting Member to the Manager with interest commencing on the date of the advance at the Default Rate. To the extent the Manager advances funds to the Company on behalf of a Defaulting Member, all Company distributions that would otherwise be made to the Defaulting Member shall be paid to the Manager (with any such amounts being applied first against accrued but unpaid interest and then against principal) until all amounts payable by the Defaulting Member to the Manager under this Section 2.10.3 (including interest) have been paid in full. The Manager may elect, upon notice to the Defaulting Member, to reduce the Defaulting Member's (i) capital account balance and Undistributed Capital (as defined in Exhibit B) by an amount equal to 50 percent of the respective amount existing as of the date of the default and (ii) Capital Commitment to an amount equal to the amount of capital contributions theretofore made by such Defaulting Member. Thereupon, the unpaid Capital Commitment of the Defaulting Member shall be zero, the Defaulting Member shall not be obligated to make any further capital contributions, the number of Class A Preferred Membership Units and Class A Membership Percentage of such Defaulting Member shall be redetermined as of the date of such default to reflect the new Capital Commitment of the Defaulting Member, and the Manager shall revise Exhibit A to reflect the reduction of the Capital Commitment, number of Class A Preferred Membership Units, and Class A Membership Percentage of the Defaulting Member. The Members agree (A) that the damages suffered by the Company as the result of a failure by a Member to pay a capital contribution to the Company that is required by this Agreement cannot be estimated with reasonable accuracy and (B) that the foregoing provisions of this Section 2.10.4 shall act as liquidated damages for the default by the Defaulting Member (which each Member hereby agrees are reasonable). The Manager may offer to all the nondefaulting Class A Members, pro rata in proportion to their Class A Membership Percentages, the option of purchasing the Defaulting Member's Class A Preferred Membership Units on such terms as the Manager determines, in its sole discretion, represent the reasonable fair market value of such interest, but in no event less than the purchaser's agreement to assume the Defaulting Member's obligation to pay the unpaid capital contribution plus that portion of the Defaulting Member's Capital Commitment then remaining. At the election of the Manager, distributions of the Company otherwise payable to the Defaulting Member hereunder shall not be paid to the Defaulting Member, but instead shall be applied against the amount of the unpaid capital contribution (plus interest at the Default Rate and related costs); provided, that any amounts so applied shall be deemed to have been distributed to the Defaulting Member for purposes of Section 3.2. Except as otherwise provided herein, no right, power, or remedy conferred upon the Partnership, the General Partner Company or the non-Defaulting Partners Manager under this Section 4.5 2.10 shall be exclusive, and each such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy, whether conferred under this Section 4.5 2.10 or now or hereafter available at law or in equity or by statute or otherwise. Each The Defaulting Partner Member shall be liable for the costs and expenses (including reasonable attorneys’ ' fees and expenses) incurred by the Table of Contents Partnership, the General Partner Company or the non-Defaulting Partners Manager in enforcing any of the remedies or rights set forth in this Section 4.52.10. Each Partner Member acknowledges by its execution of this Agreement that it has been admitted to the Partnership Company in reliance upon its agreement that the Partnership Company and the Manager may have and exercise any and all rights, powers and remedies provided for in this Section 4.5 in accordance with the terms herein 2.10 or otherwise available at law or in equity.
(g) The Partners agree (i) that the damages suffered equity or by the Partnership as the result of a failure by a Partner to make a Capital Contribution that is required by this Agreement cannot be estimated with reasonable accuracy, (ii) that the foregoing provisions of this Section 4.5 shall act as liquidated damages for the default by a Defaulting Partner (which each Partner hereby agrees are reasonable)statute or otherwise, and (iii) that furthermore specifically acknowledges and agrees that, notwithstanding anything to the foregoing provisions of contrary in this Section 4.5 are also agreed upon by Agreement, the Partners Manager shall have the right and power to take such other action as it in reliance on section 17-502(c) its sole discretion may deem necessary or advisable to protect the interests of the Delaware ActCompany and the other Members upon a Member's default.
(h) If a Defaulting Partner is a Limited Partner, the remaining Limited Partners agree to make, in proportion to their respective Capital Contributions, the Capital Contribution not made by such Defaulting Partner within 10 Business Days of notice to do so (or sooner if possible, if necessary, in order to permit the Partnership to consummate a transaction that cannot be reasonably delayed). In no event shall any Limited Partner be required to contribute more than the maximum amount that such Limited Partner is obligated to contribute pursuant to Section 4.4.
Appears in 1 contract
Samples: Operating Agreement
Non-Payment of Capital Contributions. In the event any Partner fails to pay its share of a Capital Contribution called for under any provision of this Article 4 on the date on which such Capital Contribution is due, such unpaid Capital Contributions shall automatically accrue interest from the date due at the Prime Plus Rate (which interest, once paid, shall not increase the Capital Account of such Partner). In addition, if such default is not cured within 5 days after written notice thereof given by the General Partner has been received by such Partner (a “Defaulting Partner”), all or any part of the following provisions shall apply:
(a) The Except as otherwise provided in the following sentence, the Partnership may elect, upon notice shall have the right to a Defaulting Partner by pursue the General Partner, to (i) adopt special allocations of income, gain, loss remedies described in this Section 3.6 and any remedy existing at law or deduction or otherwise debit such Defaulting Partner’s Capital Account balance such that such Defaulting Partner’s Capital Account Balance is reduced as soon as possible to an amount equal to 50% in equity for the collection of the Capital Account balance existing as of the date of the default (and make a corresponding credit to the respective Capital Account balances of the non-Defaulting Partners as if the credit unpaid amount was additional income or gain of the Partnership recognized at such time) and (ii) reduce the applicable Sharing Ratios of such Defaulting Partner (and make a corresponding increase in the Sharing Ratios of the non-Defaulting Partners in proportion to their relative Sharing Ratios) to reflect a reduction in 50% of the Capital Contributions theretofore agreed to be made by such Defaulting in Sections 3.1 and 3.2 or hereafter agreed to be made in accordance with Section 3.3, including the prosecution of a suit against a defaulting Partner.
(b) The Partnership may electIn the event that the Limited Partner fails or refuses to make when due its share of Capital Contributions, upon notice to a Defaulting Partner by the General Partner, to amend the allocations of Net Income and Net Loss and rights to receive distributions set forth in this Agreement such that such Defaulting Partner shall have no additional rights to receive allocations of Net Income from the Partnership and all Partnership distributions that would otherwise be made to such Defaulting Partner shall be paid entitled (but shall not be obligated) to make such Capital Contributions to the non-Defaulting Partners Partnership which the Limited Partner is obligated to make and the amount so advanced shall be treated as otherwise provided hereina loan from the General Partner to the Limited Partner and shall bear interest from the date of such advance at a rate equal to the Agreed Rate. The General Partner shall notify the Limited Partner of any such advance and request payment by the Limited Partner of the amount so advanced, together with interest thereon from the date of the advance. If the Limited Partner fails or refuses to pay to the General Partner the amount so advanced, together with interest thereon from the date of the advance, and if such failure or refusal persists for a period of 3 business days following notice from the General Partner to the Limited Partner, (such occurrence being called herein an "EVENT OF DEFAULT"), the General Partner shall be entitled to proceed pursuant to any remedy available under applicable law.
(c) The Partnership may electretain any revenues otherwise distributable to the Limited Partner pursuant to this Agreement in an amount equal to the amount the Limited Partner failed or refused to contribute as required pursuant to the terms of this Agreement, upon notice together with interest on such past-due amounts at a rate equal to the Agreed Rate. Any amount so withheld shall be deemed, for all purposes of this Agreement, to have been distributed to the Limited Partner and, other than that portion of such amounts representing interest, be deemed to have been recontributed by the Limited Partner to the capital of the Partnership for the purposes for which contributions were initially requested. To the extent that the General Partner has advanced funds to the Partnership as a Defaulting result of the default of the Limited Partner, the General Partner shall be entitled to be reimbursed and paid the amount of such advance plus interest at the Agreed Rate from the amounts so withheld from the Limited Partner. If any dispute as to whether an Event of Default existed is resolved in favor of the Limited Partner, then the General Partner shall pay to the Partnership for distribution to the Limited Partner an amount equal to any amounts wrongly paid by the Limited Partner to the Partnership which should have instead been paid to the Partnership by the General Partner, or any amounts distributed by the Partnership to amend the Agreement General Partner instead of the Limited Partner, in connection with such Event of Default together with interest thereon at a rate equal to provide that whenever the voteAgreed Rate, electionand all costs and expenses of the Limited Partner in resolving such dispute, consent or approval of such Defaulting including all attorneys' fees expended in connection therewith. The General Partner would otherwise shall be required or permitted free at any time also to proceed under this Agreement, such Defaulting Partner shall not be entitled Section 3.6(c) in addition to participate in such vote, election, consent any other remedies hereunder or approval, and such vote, election, consent or approval shall be calculated as if such Defaulting Partner were not a Partnerprovided by law.
(d) The In addition to all other rights and remedies available to the Partnership may elect, upon notice to a Defaulting Partner by and the General Partner, to eliminate such Defaulting Partner’s obligations to make Capital Contributions hereunder, such that such Defaulting if the Limited Partner will have no additional right (the "DEFAULTING PARTNER") fails or refuses to make Capital Contributions to the Partnership pursuant hereunder when due to Section 4.4 pay Hedge Costs and no additional right the General Partner (the "CONTRIBUTING PARTNER") in the Defaulting Partner's stead makes such Capital Contributions to subscribe for other Partnership Securities pursuant the Partnership, then the General Partner may elect to Section 4.3exercise either of the following options:
(i) The Contributing Partner may treat the payment by it of the Defaulting Partner's Capital Contributions as a loan to the Defaulting Partner, which loan shall bear interest from the date the payment is made at a rate equal to the Agreed Rate. Further, as between the Contributing Partner and the Defaulting Partner, the terms and provisions of Sections 3.6(b) and 3.6(c) shall be applicable, mutatis mutandis.
(eii) The Partnership Contributing Partner may commence legal proceedings against a treat the payment by it of the Defaulting Partner's Capital Contributions as Capital Contributions from the Contributing Partner, in which case the Contributing Partner shall be entitled to receive all of the distributions that would otherwise be paid to the Defaulting Partner hereunder until that point in time at which the Contributing Partner has received from such distributions an amount equal to collect 300% of the due and unpaid amount of the Capital Contributions made by the Contributing Partner in the Defaulting Partner's stead; provided, however, that if this option is elected, the Defaulting Partner's share of the Hedge Costs paid with such Capital Contributions, together with interest thereon and any deductions or losses relating thereto for state or federal income tax purposes, shall be allocated to the account Contributing Partner; and provided further, that the Defaulting Partner's share of Partnership revenues, and any income or gain relating thereto for state or federal income tax purposes, shall be allocated to the Partnership from Contributing Partner until the date due at revenues so allocated equal the Prime Plus Rate, plus distributions to be made to the costs and expenses of collection Contributing Partner under this paragraph (including reasonable attorneys’ fees and expensesii).
(fiii) Except as otherwise provided herein, no right, power, or remedy conferred upon If the PartnershipContributing Partner borrows funds in order to make the payment required by the Defaulting Partner, the General Contributing Partner or the non-Defaulting Partners may pledge its right to receive distributions under this Section 4.5 shall be exclusive, and each such right, power, or remedy shall be cumulative and in addition 3.6(d) which would have been made to every other right, power, or remedy, whether conferred under this Section 4.5 or now or hereafter available at law or in equity or by statute or otherwise. Each the Defaulting Partner shall be liable for the costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Table of Contents Partnership, the General Partner or the non-Defaulting Partners in enforcing any of the remedies or rights set forth in this Section 4.5. Each Partner acknowledges by its execution of this Agreement that it has been admitted to the Partnership in reliance upon its agreement that the Partnership may exercise any and all rights, powers and remedies provided for in this Section 4.5 in accordance with the terms herein or otherwise available at law or in equitysecure such borrowings.
(g) The Partners agree (i) that the damages suffered by the Partnership as the result of a failure by a Partner to make a Capital Contribution that is required by this Agreement cannot be estimated with reasonable accuracy, (ii) that the foregoing provisions of this Section 4.5 shall act as liquidated damages for the default by a Defaulting Partner (which each Partner hereby agrees are reasonable), and (iii) that the foregoing provisions of this Section 4.5 are also agreed upon by the Partners in reliance on section 17-502(c) of the Delaware Act.
(h) If a Defaulting Partner is a Limited Partner, the remaining Limited Partners agree to make, in proportion to their respective Capital Contributions, the Capital Contribution not made by such Defaulting Partner within 10 Business Days of notice to do so (or sooner if possible, if necessary, in order to permit the Partnership to consummate a transaction that cannot be reasonably delayed). In no event shall any Limited Partner be required to contribute more than the maximum amount that such Limited Partner is obligated to contribute pursuant to Section 4.4.
Appears in 1 contract
Non-Payment of Capital Contributions. In the event any Partner fails to pay its share of a Capital Contribution called for under any provision of this Article 4 on the date on which such Capital Contribution is due, such unpaid Capital Contributions shall automatically accrue interest from the date due at the Prime Plus Rate (which interest, once paid, shall not increase the Capital Account of such Partner). In addition, if such default is not cured within 5 days after written notice thereof given by the General Partner has been received by such Partner (a “"Defaulting Partner”"), all or any part of the following provisions shall apply:
(a) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to (i) adopt special allocations of income, gain, loss or deduction or otherwise debit such Defaulting Partner’s 's Capital Account balance such that such Defaulting Partner’s 's Capital Account Balance is reduced as soon as possible to an amount equal to 50% of the Capital Account balance existing as of the date of the default (and make a corresponding credit to the respective Capital Account balances of the non-Defaulting Partners as if the credit amount was additional income or gain of the Partnership recognized at such time) and (ii) reduce the applicable Sharing Ratios of such Defaulting Partner (and make a corresponding increase in the Sharing Ratios of the non-Defaulting Partners in proportion to their relative Sharing Ratios) to reflect a reduction in 50% of the Capital Contributions theretofore made by such Defaulting Partner.
(b) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the allocations of Net Income and Net Loss and rights to receive distributions set forth in this Agreement such that such Defaulting Partner shall have no additional rights to receive allocations of Net Income from the Partnership and all Partnership distributions that would otherwise be made to such Defaulting Partner shall be paid to the non-Defaulting Partners as otherwise provided herein.
(c) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the Agreement to provide that whenever the vote, election, consent or approval of such Defaulting Partner would otherwise be required or permitted under this Agreement, such Defaulting Partner shall not be entitled to participate in such vote, election, consent or approval, and such vote, election, consent or approval shall be calculated as if such Defaulting Partner were not a Partner.
(d) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to eliminate such Defaulting Partner’s 's obligations to make Capital Contributions hereunder, such that such Defaulting Partner will have no additional right to make Capital Contributions to the Partnership pursuant to Section 4.4 and no additional right to subscribe for other Partnership Securities pursuant to Section 4.3.
(e) The Partnership may commence legal proceedings against a Defaulting Partner to collect the due and unpaid amount of Capital Contributions, together with interest thereon for the account of the Partnership from the date due at the Prime Plus Rate, plus the costs and expenses of collection (including reasonable attorneys’ ' fees and expenses).
(f) Except as otherwise provided herein, no right, power, or remedy conferred upon the Partnership, the General Partner or the non-Defaulting Partners under this Section 4.5 shall be exclusive, and each such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy, whether conferred under this Section 4.5 or now or hereafter available at law or in equity or by statute or otherwise. Each Defaulting Partner shall be liable for the costs and expenses (including reasonable attorneys’ ' fees and expenses) incurred by the Table of Contents Partnership, the General Partner or the non-Defaulting Partners in enforcing any of the remedies or rights set forth in this Section 4.5. Each Partner acknowledges by its execution of this Agreement that it has been admitted to the Partnership in reliance upon its agreement that the Partnership may exercise any and all rights, powers and remedies provided for in this Section 4.5 in accordance with the terms herein or otherwise available at law or in equity.
(g) The Partners agree (i) that the damages suffered by the Partnership as the result of a failure by a Partner to make a Capital Contribution that is required by this Agreement cannot be estimated with reasonable accuracy, (ii) that the foregoing provisions of this Section 4.5 shall act as liquidated damages for the default by a Defaulting Partner (which each Partner hereby agrees are reasonable), and (iii) that the foregoing provisions of this Section 4.5 are also agreed upon by the Partners in reliance on section 17-502(c) of the Delaware Act.
(h) If a Defaulting Partner is a Limited Partner, the remaining Limited Partners agree to make, in proportion to their respective Capital Contributions, the Capital Contribution not made by such Defaulting Partner within 10 Business Days of notice to do so (or sooner if possible, if necessary, in order to permit the Partnership to consummate a transaction that cannot be reasonably delayed). In no event shall any Limited Partner be required to contribute more than the maximum amount that such Limited Partner is obligated to contribute pursuant to Section 4.4.
Appears in 1 contract
Samples: Limited Partnership Agreement (Ensource Energy Income Fund LP)
Non-Payment of Capital Contributions. In the event any Partner Member agrees to make a Capital Contribution to the Company (a “Required Capital Contribution”) but fails to pay its share of a such Required Capital Contribution called for under any provision of this Article 4 on the date on which such Capital Contribution is due, such unpaid Required Capital Contributions Contribution shall automatically accrue interest from the date due at the Prime Plus Rate (which interest, once paid, shall not increase the Capital Account of such PartnerMember). In addition, if such default Default is not cured within 5 five days after written notice thereof given by the General Partner Company has been received by such Partner Member (a “Defaulting PartnerMember”), all or any part of the following provisions shall apply:
(a) The Partnership Company may elect, upon notice to a Defaulting Partner Member by the General PartnerCompany, to (i) adopt special allocations of income, gain, loss or deduction or otherwise debit such Defaulting PartnerMember’s Capital Account balance such that such Defaulting PartnerMember’s Capital Account Balance is reduced as soon as possible to an amount equal to 50% of the Capital Account balance existing as of the date of the default (and make a corresponding credit to the respective Capital Account balances of the non-Defaulting Partners Members as if the credit amount was additional income or gain of the Partnership Company recognized at such time) and (ii) reduce the applicable Sharing Ratios of such Defaulting Partner Member (and make a corresponding increase in the Sharing Ratios of the non-Defaulting Partners Members in proportion to their relative Sharing Ratios) to reflect a reduction in 50% of the Capital Contributions theretofore made by such Defaulting PartnerMember.
(b) The Partnership Company may elect, upon notice to a Defaulting Partner Member by the General PartnerCompany, to amend the allocations of Net Income and Net Loss and rights to receive distributions set forth in this Agreement such that such Defaulting Partner Member shall have no additional rights to receive allocations of Net Income from the Partnership Company and all Partnership Company distributions that would otherwise be made to such Defaulting Partner Member shall be paid to the non-Defaulting Partners Members as otherwise provided herein.
(c) The Partnership Company may elect, upon notice to a Defaulting Partner Member by the General PartnerCompany, to amend the Agreement to provide that whenever the vote, election, consent or approval of such Defaulting Partner Member would otherwise be required or permitted under this Agreement, such Defaulting Partner Member shall not be entitled to participate in such vote, election, consent or approval, and such vote, election, consent or approval shall be calculated as if such Defaulting Partner Member were not a PartnerMember.
(d) The Partnership Company may elect, upon notice to a Defaulting Partner Member by the General PartnerCompany, to eliminate such Defaulting PartnerMember’s obligations to make Capital Contributions hereunder, such that such Defaulting Partner Member will have no additional right to make Capital Contributions to the Partnership Company pursuant to Section 4.4 and no additional right to subscribe for other Partnership Company Securities pursuant to Section 4.3.
(e) The Partnership Company may commence legal proceedings against a Defaulting Partner Member to collect the due and unpaid amount of Capital Contributions, together with interest thereon for the account of the Partnership Company from the date due at the Prime Plus Rate, plus the costs and expenses of collection (including reasonable attorneys’ fees and expenses).
(f) Except as otherwise provided herein, no right, power, or remedy conferred upon the Partnership, the General Partner Company or the non-Defaulting Partners Members under this Section 4.5 shall be exclusive, and each such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy, whether conferred under this Section 4.5 or now or hereafter available at law or in equity or by statute or otherwise. Each Defaulting Partner Member shall be liable for the costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Table of Contents Partnership, the General Partner Company or the non-Defaulting Partners Members in enforcing any of the remedies or rights set forth in this Section 4.5. Each Partner Member acknowledges by its execution of this Agreement that it has been admitted to the Partnership Company in reliance upon its agreement that the Partnership Company may exercise any and all rights, powers and remedies provided for in this Section 4.5 in accordance with the terms herein or otherwise available at law or in equity.
(g) The Partners Members agree (i) that the damages suffered by the Partnership Company as the result of a failure by a Partner Member to make a Capital Contribution that is required by this Agreement cannot be estimated with reasonable accuracy, (ii) that the foregoing provisions of this Section 4.5 shall act as liquidated damages for the default by a Defaulting Partner Member (which each Partner Member hereby agrees are reasonable), and (iii) that the foregoing provisions of this Section 4.5 are also agreed upon by the Partners Members in reliance on section 17Section 18-502(c) of the Delaware Act.
(h) If a Defaulting Partner Member is a Limited Partnerin Default, the remaining Limited Partners agree to Members may make, in proportion to their respective Capital ContributionsAccount, the Capital Contribution not made by such Defaulting Partner within 10 Business Days of notice to do so (or sooner if possible, if necessary, in order to permit the Partnership to consummate a transaction that cannot be reasonably delayed). In no event shall any Limited Partner be required to contribute more than the maximum amount that such Limited Partner is obligated to contribute pursuant to Section 4.4Member.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Ensource Energy Income Fund LP)
Non-Payment of Capital Contributions. In the event any Partner fails to pay its share of a Capital Contribution called for under any provision of this Article 4 on the date on which such Capital Contribution is due, such unpaid Capital Contributions shall automatically accrue interest from the date due at the Prime Plus Rate (which interest, once paid, shall not increase the Capital Account of such Partner). In addition, if such default is not cured within 5 days after written notice thereof given by the General Partner has been received by such Partner (a “Defaulting Partner”), all or any part of the following provisions shall apply:
(a) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to (i) adopt special allocations of income, gain, loss or deduction or otherwise debit such Defaulting Partner’s Capital Account balance such that such Defaulting Partner’s Capital Account Balance is reduced as soon as possible to an amount equal to 50% of the Capital Account balance existing as of the date of the default (and make a corresponding credit to the respective Capital Account balances of the non-Defaulting Partners as if the credit amount was additional income or gain of the Partnership recognized at such time) and (ii) reduce the applicable Sharing Ratios of such Defaulting Partner (and make a corresponding increase in the Sharing Ratios of the non-Defaulting Partners in proportion to their relative Sharing Ratios) to reflect a reduction in 50% of the Capital Contributions theretofore made by such Defaulting Partner.
(b) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the allocations of Net Income and Net Loss and rights to receive distributions set forth in this Agreement such that such Defaulting Partner shall have no additional rights to receive allocations of Net Income from the Partnership and all Partnership distributions that would otherwise be made to such Defaulting Partner shall be paid to the non-Defaulting Partners as otherwise provided herein.
(c) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to amend the Agreement to provide that whenever the vote, election, consent or approval of such Defaulting Partner would otherwise be required or permitted under this Agreement, such Defaulting Partner shall not be entitled to participate in such vote, election, consent or approval, and such vote, election, consent or approval shall be calculated as if such Defaulting Partner were not a Partner.
(d) The Partnership may elect, upon notice to a Defaulting Partner by the General Partner, to eliminate such Defaulting Partner’s obligations to make Capital Contributions hereunder, such that such Defaulting Partner will have no additional right to make Capital Contributions to the Partnership pursuant to Section 4.4 and no additional right to subscribe for other Partnership Securities pursuant to Section 4.3.
(e) The Partnership may commence legal proceedings against a Defaulting Partner to collect the due and unpaid amount of Capital Contributions, together with interest thereon for the account of the Partnership from the date due at the Prime Plus Rate, plus the costs and expenses of collection (including reasonable attorneys’ fees and expenses).
(f) Except as otherwise provided herein, no right, power, or remedy conferred upon the Partnership, the General Partner or the non-Defaulting Partners under this Section 4.5 shall be exclusive, and each such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy, whether conferred under this Section 4.5 or now or hereafter available at law or in equity or by statute or otherwise. Each Defaulting Partner shall be liable for the costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Table of Contents Partnership, the General Partner or the non-Defaulting Partners in enforcing any of the remedies or rights set forth in this Section 4.5. Each Partner acknowledges by its execution of this Agreement that it has been admitted to the Partnership in reliance upon its agreement that the Partnership may exercise any and all rights, powers and remedies provided for in this Section 4.5 in accordance with the terms herein or otherwise available at law or in equity.
(g) The Partners agree (i) that the damages suffered by the Partnership as the result of a failure by a Partner to make a Capital Contribution that is required by this Agreement cannot be estimated with reasonable accuracy, (ii) that the foregoing provisions of this Section 4.5 shall act as liquidated damages for the default by a Defaulting Partner (which each Partner hereby agrees are reasonable), and (iii) that the foregoing provisions of this Section 4.5 are also agreed upon by the Partners in reliance on section 17-502(c) of the Delaware Act.
(h) If a Defaulting Partner is a Limited Partner, the remaining Limited Partners agree to make, in proportion to their respective Capital Contributions, the Capital Contribution not made by such Defaulting Partner within 10 Business Days of notice to do so (or sooner if possible, if necessary, in order to permit the Partnership to consummate a transaction that cannot be reasonably delayed). In no event shall any Limited Partner be required to contribute more than the maximum amount that such Limited Partner is obligated to contribute pursuant to Section 4.4.
Appears in 1 contract
Samples: Limited Partnership Agreement (Ensource Energy Income Fund LP)
