Capital Contribution Default Clause Samples
A Capital Contribution Default clause defines the consequences and procedures when a party fails to provide their required financial contribution to a partnership or joint venture. Typically, this clause outlines the steps to be taken if a member does not pay their share, such as imposing penalties, diluting ownership interests, or allowing other members to cover the shortfall. Its core function is to ensure that the entity remains properly funded and to deter non-compliance by establishing clear remedies for default.
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Capital Contribution Default. If any Member shall fail to timely make a Capital Contribution required pursuant to Section 3.1(b) (a “Default”), the Managing Member shall send a notice to such Member, and such Member shall have five (5) Business Days from the receipt of such notice to cure such Default. If such Default is not cured within such five (5) Business Day period, the other Member shall, in addition to all other remedies at law or equity, have the right, but not the obligation, to fund the amount of such Default, which funding shall be treated as a loan from such other Member to the Company and shall be payable in priority to distributions to the defaulting Member and shall bear interest at a rate equal to the Prime Rate plus twelve percent (12%) from the date of the relevant Default paid until repaid.
Capital Contribution Default. If (i) any Member (the “Defaulting Member”) fails to make all or any portion of any Additional Capital Contribution when required pursuant to a Capital Call or as otherwise required by this Agreement (each a “Payment Default”), and such failure remains uncured 30 days after Notice of such Payment Default from the other Member (the “Non-Defaulting Member”), or (ii) there is a continuing BP Initial Funding Default (where the Verenium Holder is the Non-Defaulting Member and the BP Holder is the Defaulting Member), then in either case the Non-Defaulting Member may, at any time such default remains uncured, elect by delivery of Notice to the Defaulting Member any of the following remedies:
(a) Legal action to require payment of the defaulted amount. The Non-Defaulting Member may take, or cause the Company to take, such action, including legal 43 /s/ SAE BP /s/ CAR Verenium proceedings, as it may deem appropriate to obtain payment by the Defaulting Member of the Defaulting Member’s Capital Contribution that is in default, together with interest thereon at the Default Rate from the date that the defaulted amount was due until the date that payment is made, all at the cost and expense of the Defaulting Member, and full payment by the Defaulting Member of such amount shall cure the default; and