Defaulting Limited Partner. (a) Subject in all events to the provisions of Section 3.2, any Limited Partner that fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made may, in the discretion of the General Partner, be charged an Additional Amount on the unpaid balance of any such Capital Contributions or other payments at 8.0% per annum from the date such balance was due and payable through the date full payment for such balance is actually made, and to the extent any of the foregoing amounts is not otherwise paid such amount may be deducted from any distribution to such Limited Partner. Any such Additional Amount owed to the Partnership shall be allocated and distributed to the other Partners funding such Capital Contribution or other payment pro rata to their fundings thereof (and, if there are no fundings in respect of any such Capital Contribution or other payment, pro rata to their Capital Commitments). (b) If any Limited Partner fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made, then the Partnership shall promptly provide written notice of such failure to such Limited Partner. If such Limited Partner fails to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice, then (i) such Limited Partner shall be deemed a “Defaulting Limited Partner” and (ii) the following Sections 8.3(c) through (h) shall apply. (c) The General Partner shall have the right to determine, in its sole discretion, that whenever the vote, consent or decision of a Limited Partner or of the Partners is required or permitted pursuant to this Agreement, except as required by the Act, any Defaulting Limited Partner shall not be entitled to participate in such vote or consent, or to make such decision, and such vote, consent or decision shall be tabulated or made as if such Defaulting Limited Partner were not a Partner. (d) The General Partner shall have the right in its sole discretion to either: (i) determine that a Defaulting Limited Partner shall (A) not be entitled to make any further Capital Contributions to the Partnership; provided that the liability of such Defaulting Limited Partner to make Capital Contributions to the Partnership pursuant Sections 3.1(a)(iii), 3.1(a)(iv), 3.1(a)(v), and 5.2(b), and Section 6 of Appendix A shall in any case remain unchanged as if such default had not occurred and (B) forfeit to the Non- Defaulting Partners as recompense for damages suffered, and the Partnership shall withhold (for the account of such other Partners), all distributions of Temporary Investment Income, Investment Proceeds and liquidating distributions that such Defaulting Limited Partner would otherwise receive, except to the extent of Investment Proceeds and the Final Distribution relating to Capital Contributions made by the Defaulting Limited Partner less any expenses, deductions or losses (including such defaulting Partner’s share of the Aggregate Net Losses from Writedowns) allocated to such Limited Partner, provided that any amounts forfeited by the Defaulting Limited Partner or reduced by the General Partner pursuant to the preceding sentence shall be distributed among the other Non-Defaulting Partners in proportion to their Percentage Interests in the Investment or Partnership property giving rise to such distribution or, in the case of a distribution upon liquidation, in proportion to the liquidating distributions to them pursuant to Section 9.3, subject to the right of any such Partner not to have a distribution in kind made to it pursuant to Sections 3.4(b) and 9.3; or (ii) assess up to a 33-1/3% reduction in the Capital Account balance and related Percentage Interest in Investments of the Defaulting Limited Partner. (e) In the event that any Limited Partner defaults in making a Capital Contribution to the Partnership (or any alternative investment vehicle formed pursuant to Section 2.9) for any Investment, the General Partner may require all of the non-defaulting Limited Partners to increase their Capital Contributions by an aggregate amount equal to the Capital Contribution defaulted on; provided that no Limited Partner will be required to fund amounts in excess of its Unpaid Capital Commitment. If the General Partner elects to require such increase, the General Partner shall deliver to each Non-Defaulting Partner written notice of such default as promptly as practicable after its occurrence and, thereafter, with respect to each Investment, the General Partner shall as promptly as practicable deliver to each such Non-Defaulting Partner a Payment Notice in respect of the Capital Contribution which the Defaulting Limited Partner failed to make. Subject to the proviso set forth above in this Section 8.3(e), such Payment Notice shall (i) call for a Capital Contribution by each such Non-Defaulting Partner in an amount equal to the amount of such Non-Defaulting Partner’s Pro Rata Share of such additional Capital Contribution and (ii) specify a Payment Date for such Capital Contribution, which date shall be at least five (5) Business Days from the date of delivery of such Payment Notice by the General Partner. If any Limited Partner is not required to make a Capital Contribution in accordance with this Section 8.3(e) because such Capital Contribution would be in excess of such Limited Partner’s Unpaid Capital Commitment, then, subject to the proviso set forth in this Section 8.3(e), the General Partner shall send to each other Limited Partner which is not subject to such constraint and which is otherwise able to participate in such Investment a Payment Notice providing the amount of any additional Capital Contribution which such other Limited Partner shall be required to make as a result of such excess not being funded by the Limited Partner whose Unpaid Capital Commitment would have been exceeded, which amount shall bear the same ratio to the aggregate of the additional amounts payable by all such other Limited Partners as such other Limited Partner’s Unpaid Capital Commitment bears to the Unpaid Capital Commitments of all such other Limited Partners. The provisions of this Section 8.3(e) shall operate successively until either all Limited Partners able to participate in such Investment are subject to the constraint set forth above or the full amount of Capital Contribution of the Defaulting Limited Partner has been provided for. (f) No right, power or remedy conferred upon the General Partner in this Section 8.3 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 in this Section 8.3 or now or hereafter available at law or in equity or by statute or otherwise. No course of dealing between the General Partner and any Defaulting Limited Partner and no delay in exercising any right, power or remedy conferred in this Section 8.3 or now or hereafter existing at law or in equity or by statute or otherwise shall operate as a waiver or otherwise prejudice any such right, power or remedy. In addition to the foregoing, the General Partner may in its sole discretion institute a lawsuit against any Defaulting Limited Partner for specific performance of its obligation to make Capital Contributions and any other payments to be made hereunder by a Limited Partner and to collect any overdue amounts hereunder, with interest on such overdue amounts calculated at the rate specified in Section 8.3(a), and each Limited Partner agrees to pay on demand all costs and expenses (including reasonable attorneys’ fees) incurred by or on behalf of the Partnership in connection with the enforcement of this Agreement against such Limited Partner as a result of a default by such Limited Partner. (g) Each Limited Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 8.3 (as well as the other provisions of this Agreement), that the General Partner and the Partnership may have no adequate remedy at law for a breach hereof and that damages resulting from a breach hereof may be impossible to ascertain at the time hereof or of such breach. (h) For purposes of this Section 8.3, if any Defaulting Limited Partner is an entity the equity owners of which consist of two or more unaffiliated investors, the General Partner may, in its sole discretion, treat the owner of such entity that was responsible for such default as the Defaulting Limited Partner and may invoke the rights, powers and remedies specified herein separately with respect to such owner.
Appears in 2 contracts
Sources: Limited Partnership Agreement, Limited Partnership Agreement
Defaulting Limited Partner. (a) Subject in all events to the provisions of Section 3.2, any Any Limited Partner that fails to make, when due, any portion of the Capital Contribution Contributions required to be contributed made by such Limited Partner pursuant to this Agreement or and the Subscription Agreement to make any other payment required to be made by it hereunder when required to be made which such Limited Partner is a party may, in the discretion of the General Partner, be charged an Additional Amount additional amount on the unpaid balance of any such Capital Contributions or other payments Contribution at 8.0% per annum the Default Rate from the date such balance was due and payable through the date full payment for such balance is actually made, and to the extent any of the foregoing amounts such additional amount is not otherwise paid such additional amount may be deducted from any distribution otherwise payable to such Limited Partner. Any such Additional Amount owed to the Partnership shall be allocated and distributed to the other Partners funding such Capital Contribution or other payment pro rata to their fundings thereof (and, if there are no fundings in respect of any such Capital Contribution or other payment, pro rata to their Capital Commitments).
(b) If any Limited Partner fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or and the Subscription Agreement to make any other payment required to be made by it hereunder when required to be madewhich such Limited Partner is a party, then the Partnership shall promptly provide written notice of such failure to such Limited Partner. If such Limited Partner fails to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice, then (i) such Limited Partner shall be deemed a “Defaulting Limited Partner” and (ii) the following Sections 8.3(c10.6(c) through (h) shall apply.
(c) The General Partner shall have the right to determine, in its sole discretion, that whenever the vote, consent or decision of a Limited Partner or of the Partners is required or permitted pursuant to this Agreement, except as required by the Act, any Defaulting Limited Partner shall not be entitled to participate in such vote or consent, or to make such decision, and such vote, consent or decision shall be tabulated or made as if such Defaulting Limited Partner were not a Partner.
(d) The General Partner shall have the right in its sole discretion to either:
either (ii)(A) determine that a Defaulting Limited Partner shall (A) not be entitled to make any further Capital Contributions to the Partnership; provided that the liability of such Defaulting Limited Partner to make Capital Contributions to the Partnership pursuant Sections 3.1(a)(iii), 3.1(a)(iv), 3.1(a)(v), and 5.2(b), and Section 6 of Appendix A shall in any case remain unchanged as if such default had not occurred and (B) forfeit to the Non- Defaulting non-defaulting Partners as recompense for damages suffered, and the Partnership shall withhold (for the account of such other Partners), all distributions of Temporary Investment Income, Investment Proceeds Operating Cash Flow and Capital Cash Flow and liquidating distributions that such Defaulting Limited Partner would otherwise receive, except and (B) effect a forfeiture by such Limited Partner of 20% of its aggregate Partnership Interest (including 20% of its Capital Account balance); or (ii) upon delivery of written notice to the extent of Investment Proceeds and the Final Distribution relating to Capital Contributions made by Defaulting Limited Partner, cause the Defaulting Limited Partner less to transfer all of its interest in the Partnership to one or more other Partners (or any expenses, deductions other Person or losses (including such defaulting Persons to the extent not purchased by any Partner’s share of the Aggregate Net Losses from Writedowns) allocated to such Limited Partner, provided that any amounts forfeited by the Defaulting Limited Partner or reduced selected by the General Partner pursuant in its sole discretion, which have agreed to the preceding sentence shall be distributed among the other Non-Defaulting Partners in proportion purchase such interest at a transfer price equal to their Percentage Interests in the Investment or Partnership property giving rise to at least 80% of such distribution or, in the case of a distribution upon liquidation, in proportion to the liquidating distributions to them pursuant to Section 9.3, subject to the right of any such Partner not to have a distribution in kind made to it pursuant to Sections 3.4(b) and 9.3; or
(ii) assess up to a 33-1/3% reduction in the Capital Account balance and related Percentage Interest in Investments of the Defaulting Limited Partner’s Capital Account balance.
(e) In the event that any a Limited Partner defaults in making all or any portion of a Capital Contribution to the Partnership (or any alternative investment vehicle formed pursuant to Section 2.9) for any InvestmentPartnership, the General Partner may require all of the non-non- defaulting Limited Partners to increase their Capital Contributions by an aggregate amount equal to the Capital Contribution defaulted onof the Defaulting Limited Partner on which it defaulted; provided that no Limited Partner will be required to fund contribute any amounts in excess of its Unpaid Capital CommitmentUnfunded Commitment without such Limited Partner’s consent. If the General Partner elects to require such increase, the General Partner shall deliver to each Nonnon-Defaulting defaulting Partner written notice of such default as promptly as practicable after its occurrence and, thereafter, with respect to each Investment, the General Partner shall as promptly as practicable deliver to each such Nonnon-Defaulting defaulting Partner a Payment Capital Call Notice in respect of the Capital Contribution which the Defaulting Limited Partner failed to make. Subject to the proviso provisos set forth above in this Section 8.3(e10.6(e), such Payment Capital Call Notice shall (i) call for a Capital Contribution by each such Nonnon-Defaulting defaulting Partner in an amount equal to the amount of such Nonnon-Defaulting defaulting Partner’s Pro Rata Share pro rata share of such additional Capital Contribution Contribution, based on the Unfunded Commitments of the Limited Partners, and (ii) specify a Payment Date for such Capital Contribution, which date shall be at least five (5) Business Days ten calendar days from the date of delivery of such Payment Capital Call Notice by the General Partner. If any Limited Partner is not required to make a Capital Contribution in accordance with this Section 8.3(e10.6(e) because such Capital Contribution would be in excess of such Limited Partner’s Unpaid Capital Unfunded Commitment, then, subject to the proviso provisos set forth in this Section 8.3(e10.6(e), the General Partner shall send to each other Limited Partner which is not subject to such constraint and which is otherwise able to participate in such Investment a Payment Capital Call Notice providing the amount of any additional Capital Contribution which such other Limited Partner shall be required to make as a result of such excess not being funded by the Limited Partner whose Unpaid Capital Commitment would have been exceededwhich is subject to such constraint, which amount shall bear the same ratio to the aggregate of the additional amounts payable by all such other non-defaulting Limited Partners as such other Limited Partner’s Unpaid Capital Unfunded Commitment bears to the Unpaid Capital Unfunded Commitments of all such other non-defaulting Limited Partners. The provisions of this Section 8.3(e10.6(e) shall operate successively until either all Limited Partners able to participate in such Investment are subject to the such constraint set forth above or the full amount of the defaulted Capital Contribution of the Defaulting Limited Partner has been provided for.
(f) No right, power or remedy conferred upon the General Partner in this Section 8.3 10.6 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 in this Section 8.3 10.6 or now or hereafter available at law or in equity or by statute or otherwise. No course of dealing between the General Partner and any Defaulting Limited Partner and no delay in exercising any right, power or remedy conferred in this Section 8.3 10.6 or now or hereafter existing at law or in equity or by statute or otherwise shall operate as a waiver or otherwise prejudice any such right, power or remedy. In addition to the foregoing, the General Partner may in its sole discretion institute a lawsuit against any Defaulting Limited Partner for specific performance of its obligation to make Capital Contributions and any other payments to be made hereunder by a Limited Partner and to collect any overdue amounts hereunder, with interest on such overdue amounts calculated at the rate specified in Section 8.3(a), and each Limited Partner agrees to pay on demand all costs and expenses (including reasonable attorneys’ fees) incurred by or on behalf of the Partnership in connection with the enforcement of this Agreement against such Limited Partner as a result of a default by such Limited Partner.
(g) Each Limited Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 8.3 (as well as the other provisions of this Agreement and in its Subscription Agreement), that the General Partner and the Partnership may have no adequate remedy at law for a breach hereof of such agreements and that damages resulting from a breach hereof of such agreements may be impossible to ascertain at the time hereof or of such breach.
(h) For purposes of this Section 8.310.6, if any Defaulting Limited Partner is an a Feeder Entity or another entity the equity owners of which consist of two or more unaffiliated investors, the General Partner may, in its sole discretion, treat the owner of such entity that was responsible for such default (and not such entity or any general partner, managing member or other controlling person of such entity) as the Defaulting Limited Partner and may invoke the rights, powers and remedies specified herein separately with respect to such owner, and hold such owner solely responsible for such default.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Hines Real Estate Investment Trust Inc), Limited Partnership Agreement (Hines Real Estate Investment Trust Inc)
Defaulting Limited Partner. (a) Subject in all events to the provisions of Section 3.2, If any Limited Partner that fails to makecontribute, when duein a timely manner, any portion of the Capital Contribution Commitment required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made and such failure continues for five Business Days after delivery by it hereunder when required to be made may, in the discretion of the General Partner, be charged an Additional Amount on the unpaid balance of any such Capital Contributions or other payments at 8.0% per annum from the date such balance was due and payable through the date full payment for such balance is actually made, and to the extent any of the foregoing amounts is not otherwise paid such amount may be deducted from any distribution Partner to such Limited Partner. Any Partner of notice, confirmed by telephone, of such Additional Amount owed to the Partnership shall be allocated and distributed to the other Partners funding such Capital Contribution or other payment pro rata to their fundings thereof (and, if there are no fundings in respect of any such Capital Contribution or other payment, pro rata to their Capital Commitments).
(b) If any Limited Partner fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be madefailure, then the Partnership shall promptly provide written notice of such failure to such Limited Partner. If such Limited Partner fails to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice, then (i) such Limited Partner shall be deemed a “Defaulting Limited Partner” ”, and (ii) the following Sections 8.3(c) through (h9.6(b)-(k) shall apply.
(cb) The General Partner shall have the right to determine, in its sole discretion, that whenever Whenever the vote, consent or decision of a Limited Partner or of the Partners is required or permitted pursuant to this Agreement, except as required by the Act, any Defaulting Limited Partner shall not be entitled to participate in such vote or consent, or to make such decision, and such vote, consent or decision shall be tabulated or made as if such Defaulting Limited Partner were not a Partner.
(dc) The General Partner shall have the right to determine, in its sole discretion to either:
(i) determine that discretion, whether a Defaulting Limited Partner shall (A) not be entitled to make any further Capital Contributions contributions of capital to the Partnership; provided that such Defaulting Limited Partner shall remain fully liable to the liability Partnership to the extent of its Capital Commitment.
(d) Unless the General Partner, in its sole discretion, determines that it is not appropriate, a Defaulting Limited Partner shall forfeit a fraction of its interest in the Partnership equal to the greater of (i) one minus the ratio of such Limited Partner’s Capital Contribution to its Capital Commitment immediately prior to the applicable Capital Demand Date and (ii) one- third of such interest. In such event, unless the General Partner makes an offer pursuant to Section 9.6(f), the fraction of the interest so forfeited shall be allocated among the nondefaulting Partners in proportion to their Capital Contributions as of the date of forfeiture (without giving effect to such forfeiture), and the Capital Account of each Partner shall be adjusted accordingly. The General Partner may also in its discretion on behalf of the Partnership, terminate all of the interest in the Partnership of the Defaulting Limited Partner, subject to Section 9.6(i), if the Capital Account of the Defaulting Limited Partner after the application of this Section 9.6(d) is greater than zero and, if such Capital Account is zero, immediately by notice to the Defaulting Limited Partner, without any action or consent of any other Person. The General Partner, without the vote or consent of any Limited Partner, shall execute and file any instruments on its own behalf and on behalf of the Limited Partners required to effectuate the foregoing. The General Partner shall use its reasonable best efforts to implement this Section 9.6(d) in a manner so as to avoid causing a non-exempt “prohibited transaction” as defined in Section 406 of ERISA, Section 4975 of the Code or applicable state law.
(e) The General Partner reserves the right to substitute for any Defaulting Limited Partner any other Person, including the General Partner, its Affiliates or any existing Limited Partner (with the consent of such Limited Partner), as a Substitute Limited Partner (the “Replacement Limited Partner”); provided that if the Replacement Limited Partner is the General Partner or any of its Affiliates (other than an Affiliate the primary beneficial ownership of which is held by one or more Persons that are not Affiliates of the General Partner), the Advisory Board will be notified of such substitution. Subject to Section 6.11(c) if the Replacement Limited Partner is the General Partner or an Affiliate thereof, such Replacement Limited Partner will acquire all the rights and assume all the obligations of the Defaulting Limited Partner arising pursuant to this Agreement (other than obligations arising out of such Defaulting Limited Partner’s default and the obligations of the Defaulting Limited Partner to make Capital Contributions return distributions pursuant to the Partnership pursuant Sections 3.1(a)(iii), 3.1(a)(iv), 3.1(a)(vSection 6.3(b) or to repay any funds wrongfully distributed to it), and 5.2(b)shall execute and deliver to the General Partner any documents or instruments as it may request to evidence the foregoing as provided in Section 9.4, and Section 6 of Appendix A shall in any case remain unchanged as if such default had not occurred execute and (B) forfeit deliver to the Non- General Partner, for forwarding to the Defaulting Partners as recompense for damages sufferedLimited Partner, and a non-interest-bearing promissory note, in a form provided by the Partnership shall withhold (for General Partner in an amount equal to the account of such other Partners), all distributions of Temporary Investment Income, Investment Proceeds and liquidating distributions that amount in such Defaulting Limited Partner would Partner’s Capital Account at the time of its default (as adjusted pursuant to Section 9.6(d)) and having a maturity of two years from the date of purchase or cash in the same amount. Such note shall be secured by the limited partner interest being purchased thereby pursuant to a security agreement to be entered into at such time but shall otherwise receive, except be without recourse to the extent maker thereof. The admission of Investment Proceeds any Replacement Limited Partner shall occur upon the General Partner’s receipt of the note and the Final Distribution relating to Capital Contributions made Replacement Limited Partner’s execution of this Agreement, and shall not require any action by the Defaulting Limited Partner less any expenses, deductions or losses (including such defaulting Partner’s share and shall not be a cause for dissolution of the Aggregate Net Losses from Writedowns) allocated Partnership. Upon the admission of any Replacement Limited Partner pursuant to such Limited Partnerthis Section 9.6(e), provided that any amounts forfeited by the Defaulting Limited Partner or reduced by shall cease to be a limited partner of the Partnership and the General Partner pursuant shall update the Register of Partners to reflect such admission and cessation. The General Partner shall use its reasonable best efforts to implement this Section 9.6(e) in a manner so as to avoid causing a non-exempt “prohibited transaction” as defined in Section 406 of ERISA, Section 4975 of the Code or applicable state law.
(f) The General Partner may offer all of the nondefaulting Partners (i) the option of electing to increase their aggregate Capital Commitments by an amount equal to the preceding sentence shall be distributed among Unpaid Capital Obligation of the other Non-Defaulting Partners in proportion Limited Partner as of the time of its default and (ii) the option of electing to their Percentage Interests purchase the interest of the Defaulting Limited Partner in the Investment or Partnership property giving rise to such distribution or, in the case of a distribution upon liquidation, in proportion at an aggregate price equal to the liquidating distributions to them amount in such Defaulting Limited Partner’s Capital Account as of the time of its default (as adjusted pursuant to Section 9.39.6(d)), subject in each case, in accordance with the terms set forth below and less any expenses incurred by the Partnership and the nondefaulting Partners in connection with such purchase. Any election by a nondefaulting Partner to the right of any such Partner not increase its Capital Commitment or to have purchase a distribution in kind made to it pursuant to Sections 3.4(b) and 9.3; or
(ii) assess up to a 33-1/3% reduction in the Capital Account balance and related Percentage Interest in Investments portion of the Defaulting Limited Partner’s interest in the Partnership must be made within 30 days after the date of delivery of such notice by the General Partner. Pursuant to such offer, each nondefaulting Partner shall have the option (A) subject to Section 9.6(g), to increase its Capital Commitment by an amount equal to the Unpaid Capital Obligation of the Defaulting Limited Partner as of the time of its default multiplied by a fraction, the numerator of which is such nondefaulting Partner’s then-current Capital Commitment and the denominator of which is the sum of all of the nondefaulting Partners’ then-current Capital Commitments and (B) subject to Section 9.6(h), to purchase such portion of the Defaulting Limited Partner’s interest in the Partnership as is equal to the amount in such Defaulting Limited Partner’s Capital Account as of the time of its default multiplied by a fraction, the numerator of which is such nondefaulting Partner’s then-current Capital Commitment and the denominator of which is the sum of all the nondefaulting Partners’ then- current Capital Commitments. If any of the nondefaulting Partners do not so elect to increase their Capital Commitments and/or purchase the Defaulting Limited Partner’s interest in the Partnership, the General Partner shall reoffer to each nondefaulting Partner who shall have made an election pursuant to this Section 9.6(f) the option or options of electing further to increase its Capital Commitment or its share of the Defaulting Limited Partner’s interest in the Partnership, as the case may be, by an amount or amounts determined equitably by the General Partner taking into account each nondefaulting Partner’s Capital Commitment or may include such option in the original offer.
(eg) In the event that any Limited Partner defaults in making a Capital Contribution to the Partnership (of an election by one or any alternative investment vehicle formed pursuant to Section 2.9) for any Investment, the General Partner may require all of the non-defaulting Limited more nondefaulting Partners to increase their Capital Contributions by an aggregate amount equal Commitments pursuant to the Capital Contribution defaulted on; provided that no Limited Partner will be required to fund amounts in excess of its Unpaid Capital Commitment. If the General Partner elects to require such increaseSection 9.6(f), the General Partner shall deliver to each Non-Defaulting Partner written notice of such default as promptly as practicable after its occurrence and, thereafter, with respect to each Investment, the General Partner shall as promptly as practicable deliver to each such Non-Defaulting Partner a Payment Capital Demand Notice in respect of the Capital Contribution which the Defaulting Limited Partner failed to make. Subject make to each such nondefaulting Partner no later than 45 days after the date of delivery of the first notice of the initial offer to the proviso set forth above in this nondefaulting Partners pursuant to Section 8.3(e9.6(f), such Payment . Such Capital Demand Notice shall (i) call for a Capital Contribution by each such Non-Defaulting nondefaulting Partner in an amount equal which is the lesser of (A) the amount by which such nondefaulting Partner has increased its Capital Commitment and (B) an amount which bears the same ratio to the amount of the Capital Contribution which the Defaulting Limited Partner failed to make as the increase of such Non-Defaulting nondefaulting Partner’s Pro Rata Share Capital Commitment bears to the increases of such additional all electing nondefaulting Partners’ Capital Contribution Commitments and (ii) specify a Payment Capital Demand Date for such Capital Contribution, which date shall be at least five (5) Business Days no less than ten days from the date of delivery of such Payment Capital Demand Notice by the General Partner. If .
(h) In the event that one or more nondefaulting Partners elect to purchase any Limited Partner is not required to make a Capital Contribution in accordance with this Section 8.3(e) because such Capital Contribution would be in excess of such Limited Partner’s Unpaid Capital Commitment, then, subject to the proviso set forth in this Section 8.3(e), the General Partner shall send to each other Limited Partner which is not subject to such constraint and which is otherwise able to participate in such Investment a Payment Notice providing the amount of any additional Capital Contribution which such other Limited Partner shall be required to make as a result of such excess not being funded by the Limited Partner whose Unpaid Capital Commitment would have been exceeded, which amount shall bear the same ratio to the aggregate of the additional amounts payable by or all such other Limited Partners as such other Limited Partner’s Unpaid Capital Commitment bears to the Unpaid Capital Commitments of all such other Limited Partners. The provisions of this Section 8.3(e) shall operate successively until either all Limited Partners able to participate in such Investment are subject to the constraint set forth above or the full amount of Capital Contribution of the Defaulting Limited Partner’s interests in the Partnership pursuant to Section 9.6(f), each such electing nondefaulting Partner has been shall, no later than 45 days after the date of delivery of the notice of the initial offer to the nondefaulting Partners pursuant to Section 9.6(f), execute and deliver to the General Partner, for forwarding to the Defaulting Limited Partner, non-interest bearing promissory notes, in a form provided forby the General Partner and reasonably acceptable to such nondefaulting Partner, in amounts equal to their respective purchase prices and having a maturity of two years from the date of purchase. Such notes shall be secured by the limited partner interest being purchased thereby pursuant to a security agreement to be entered into at such time but shall otherwise be without recourse to the maker thereof. Transfer of a limited partner interest so purchased shall be effective upon receipt by the General Partner of the related note, and the purchasing nondefaulting Partners shall be automatically admitted to the Partnership as Limited Partners with respect to the limited partner interests so purchased.
(fi) No distributions other than the Final Distribution shall be made to any Defaulting Limited Partner unless the General Partner shall, in its sole discretion, determine that not making a particular distribution to a Defaulting Limited Partner would be a substantial and inequitable hardship to such Defaulting Limited Partner or not in the best interests of the Partnership.
(j) No right, power or remedy conferred upon the General Partner in this Section 8.3 9.6 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 in this Section 8.3 9.6 or now or hereafter available at law or in equity or by statute or otherwise. No course of dealing between the General Partner and any Defaulting Limited Partner and no delay in exercising any right, power or remedy conferred in this Section 8.3 9.6 or now or hereafter existing at law or in equity or by statute or otherwise shall operate as a waiver or otherwise prejudice any such right, power or remedy. In addition .
(k) A nondefaulting Partner shall not be required to bear any portion of the Management Fee charged with respect to the foregoing, the General Partner may in its sole discretion institute interest of a lawsuit against any Defaulting Limited Partner for specific performance in the Partnership unless, and to the extent that, such nondefaulting Partner has assumed all or a portion of its obligation to make the Capital Contributions and any other payments to be made hereunder by a Commitment and/or Unpaid Capital Obligation of such Defaulting Limited Partner and pursuant to collect any overdue amounts hereunderSection 9.2, with interest on such overdue amounts calculated at the rate specified in Section 8.3(a9.3, 9.4, 9.6(e), and each Limited Partner agrees to pay on demand all costs and expenses (including reasonable attorneys’ fees) incurred by or on behalf of the Partnership in connection with the enforcement of this Agreement against such Limited Partner as a result of a default by such Limited Partner9.6(f).
(gl) Each Limited Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 8.3 (as well as the other provisions of this Agreement), that the General Partner and the Partnership may have no adequate remedy at law for a breach hereof and that damages resulting from a breach hereof may be impossible to ascertain at the time hereof or of such breach.
(h) For purposes of this Section 8.3, if any Defaulting Limited Partner is an entity the equity owners of which consist of two or more unaffiliated investors, the General Partner may, in its sole discretion, treat the owner of such entity that was responsible for such default as the Defaulting Limited Partner and may invoke the rights, powers and remedies specified herein separately with respect to such owner.
Appears in 1 contract
Sources: Limited Partnership Agreement
Defaulting Limited Partner. (a) Subject in all events to the provisions of Section 3.2, any Limited Partner that fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made may, in the discretion of the General Partner, be charged an Additional Amount additional amount on the unpaid balance of any such Capital Contributions Contributions, Direct Payments or other payments at 8.0% per annum an annual rate equal to the lesser of (i) (A) eight percent (8%) from the date such balance was due and payable through the date that is 45 days thereafter, and (B) sixteen percent (16%) from the date that is 45 days after such balance was due and payable through the date full payment for such balance is actually made, and to (ii) the highest rate permitted by applicable law. To the extent any of the foregoing amounts such additional amount is not otherwise paid paid, such additional amount may be deducted from any distribution or other payment to such Limited Partner. Any such Additional Amount additional amount owed to the Partnership shall first be applied to offset costs to the Partnership created by the default and thereafter shall be allocated and distributed to the other Partners funding such Capital Contribution or other payment pro rata to their fundings thereof (and, if there are no fundings in respect of any such Capital Contribution or other payment, pro rata to their Capital Commitments). Each Partner agrees that payment of its required Capital Contributions or other payments required to be made by it hereunder when due is of the essence, that any default by any Limited Partner would cause irreparable injury to the Partnership, the General Partner and the other Limited Partners and that the amount of damages caused by any such injury would be extremely difficult to calculate.
(b) If any Limited Partner fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made, then the Partnership shall promptly provide written notice of such failure to such Limited Partner. If such Limited Partner fails to make such Capital Contribution or other payment within five (5) Business Days (or such longer period as agreed by the General Partner in its sole discretion) after receipt of such notice, then (i) such Limited Partner shall be deemed a “Defaulting Limited Partner” and (ii) the following Sections 8.3(c) through (h) shall apply.
(c) The General Partner shall have the right to determine, in its sole discretion, that whenever the vote, consent or decision of a Limited Partner or of the Partners is required or permitted pursuant to this Agreement, except as required by the Act, any Defaulting Limited Partner shall not be entitled to participate in such vote or consent, or to make such decision, and such vote, consent or decision shall be tabulated or made as if such Defaulting Limited Partner were not a Partner.
(d) The General Partner shall have the right in its sole discretion to either:
(i) determine that a Defaulting Limited Partner shall (A) not be entitled to make any further Capital Contributions to the Partnership; provided that the liability of such Defaulting Limited Partner to make Capital Contributions to the Partnership pursuant Sections 3.1(a)(iii), 3.1(a)(iv), 3.1(a)(v), and 5.2(b), and Section 6 of Appendix A shall in any case remain unchanged as if such default had not occurred and (B) forfeit to the Non- Defaulting Partners as recompense for damages suffered, and the Partnership shall withhold (for the account of such other Partners), all distributions of Temporary Investment Income, Investment Proceeds and liquidating distributions that such Defaulting Limited Partner would otherwise receive, except to the extent of Investment Proceeds and the Final Distribution relating to Capital Contributions made by the Defaulting Limited Partner less any expenses, deductions or losses (including such defaulting Partner’s share of the Aggregate Net Losses from Writedowns) allocated to such Limited Partner, provided that any amounts forfeited by the Defaulting Limited Partner or reduced by the General Partner pursuant to the preceding sentence shall be distributed among the other Non-Defaulting Partners in proportion to their Percentage Interests in the Investment or Partnership property giving rise to such distribution or, in the case of a distribution upon liquidation, in proportion to the liquidating distributions to them pursuant to Section 9.3, subject to the right of any such Partner not to have a distribution in kind made to it pursuant to Sections 3.4(b) and 9.3; or
(ii) assess up to a 33-1/3% reduction in the Capital Account balance and related Percentage Interest in Investments of the Defaulting Limited Partner.
(e) In the event that any Limited Partner defaults in making a Capital Contribution to the Partnership (or any alternative investment vehicle formed pursuant to Section 2.9) for any Investment, the General Partner may require all of the non-defaulting Limited Partners to increase their Capital Contributions by an aggregate amount equal to the Capital Contribution defaulted on; provided that no Limited Partner will be required to fund amounts in excess of its Unpaid Capital Commitment. If the General Partner elects to require such increase, the General Partner shall deliver to each Non-Defaulting Partner written notice of such default as promptly as practicable after its occurrence and, thereafter, with respect to each Investment, the General Partner shall as promptly as practicable deliver to each such Non-Defaulting Partner a Payment Notice in respect of the Capital Contribution which the Defaulting Limited Partner failed to make. Subject to the proviso set forth above in this Section 8.3(e), such Payment Notice shall (i) call for a Capital Contribution by each such Non-Defaulting Partner in an amount equal to the amount of such Non-Defaulting Partner’s Pro Rata Share of such additional Capital Contribution and (ii) specify a Payment Date for such Capital Contribution, which date shall be at least five (5) Business Days from the date of delivery of such Payment Notice by the General Partner. If any Limited Partner is not required to make a Capital Contribution in accordance with this Section 8.3(e) because such Capital Contribution would be in excess of such Limited Partner’s Unpaid Capital Commitment, then, subject to the proviso set forth in this Section 8.3(e), the General Partner shall send to each other Limited Partner which is not subject to such constraint and which is otherwise able to participate in such Investment a Payment Notice providing the amount of any additional Capital Contribution which such other Limited Partner shall be required to make as a result of such excess not being funded by the Limited Partner whose Unpaid Capital Commitment would have been exceeded, which amount shall bear the same ratio to the aggregate of the additional amounts payable by all such other Limited Partners as such other Limited Partner’s Unpaid Capital Commitment bears to the Unpaid Capital Commitments of all such other Limited Partners. The provisions of this Section 8.3(e) shall operate successively until either all Limited Partners able to participate in such Investment are subject to the constraint set forth above or the full amount of Capital Contribution of the Defaulting Limited Partner has been provided for.
(f) No right, power or remedy conferred upon the General Partner in this Section 8.3 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 in this Section 8.3 or now or hereafter available at law or in equity or by statute or otherwise. No course of dealing between the General Partner and any Defaulting Limited Partner and no delay in exercising any right, power or remedy conferred in this Section 8.3 or now or hereafter existing at law or in equity or by statute or otherwise shall operate as a waiver or otherwise prejudice any such right, power or remedy. In addition to the foregoing, the General Partner may in its sole discretion institute a lawsuit against any Defaulting Limited Partner for specific performance of its obligation to make Capital Contributions and any other payments to be made hereunder by a Limited Partner and to collect any overdue amounts hereunder, with interest on such overdue amounts calculated at the rate specified in Section 8.3(a), and each Limited Partner agrees to pay on demand all costs and expenses (including reasonable attorneys’ fees) incurred by or on behalf of the Partnership in connection with the enforcement of this Agreement against such Limited Partner as a result of a default by such Limited Partner.
(g) Each Limited Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 8.3 (as well as the other provisions of this Agreement), that the General Partner and the Partnership may have no adequate remedy at law for a breach hereof and that damages resulting from a breach hereof may be impossible to ascertain at the time hereof or of such breach.
(h) For purposes of this Section 8.3, if any Defaulting Limited Partner is an entity the equity owners of which consist of two or more unaffiliated investors, the General Partner may, in its sole discretion, treat the owner of such entity that was responsible for such default as the Defaulting Limited Partner and may invoke the rights, powers and remedies specified herein separately with respect to such owner.
Appears in 1 contract
Sources: Limited Partnership Agreement
Defaulting Limited Partner. (a) Subject in all events to the provisions of Section 3.2, any Limited Partner that fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made may, in the discretion of the General Partner, be charged an Additional Amount on the unpaid balance of any such Capital Contributions or other payments at 8.0% per annum from the date such balance was due and payable through the date full payment for such balance is actually made, and to the extent any of the foregoing amounts is not otherwise paid such amount may be deducted from any distribution to such Limited Partner. Any such Additional Amount owed to the Partnership shall be allocated and distributed to the other Partners funding such Capital Contribution or other payment pro rata to their fundings thereof (and, if there are no fundings in respect of any such Capital Contribution or other payment, pro rata to their Capital Commitments).
(b) If any Limited Partner fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or such Limited Partner's Subscription Agreement or to make any other payment required to be made by it such Limited Partner hereunder or thereunder when required to be made, then the Partnership shall promptly General Partner may provide written notice of such failure to such Limited Partner. If such Limited Partner fails to make such Capital Contribution or other payment within five ten (510) Business Days after receipt of such notice, then then, (i) such Limited Partner shall be deemed a “"Defaulting Limited Partner” " and (ii) the following Sections 8.3(c6.4(b) through (he) shall apply; PROVIDED that the General Partner in its sole discretion may choose not to designate a Limited Partner as a Defaulting Limited Partner and may agree to waive or permit the cure of any default by a Defaulting Limited Partner, subject to such conditions as the General Partner and the Defaulting Limited Partner may agree on.
(cb) The General Partner shall have the right to determine, in its sole discretion, that whenever the vote, consent or decision of a Limited Partner or of the Partners is required or permitted pursuant to this Agreement, except as required by the Act, any A Defaulting Limited Partner shall not be entitled to participate in such vote or consent, or to make such decision, and such vote, consent or decision shall be tabulated or made as if such Defaulting Limited Partner were not a Partner.
(d) The General Partner shall have the right in its sole discretion to either:
(i) determine that a Defaulting Limited Partner shall (A) not be entitled to make any further Capital Contributions to the Partnership; provided that the liability of such Defaulting Limited Partner to make Capital Contributions to the Partnership pursuant Sections 3.1(a)(iii), 3.1(a)(iv), 3.1(a)(v), and 5.2(b), and Section 6 of Appendix A shall in any case remain unchanged as if such default had not occurred and (B) forfeit to the Non- Defaulting Partners General Partner, as recompense for damages suffered, as follows: (i) with respect to such Limited Partner's Pro Rata Share and related distributions, the Partnership General Partner shall withhold assess a 25% reduction, (for ii) with respect to such Limited Partner's interest in the account vested portion of such other Partners)the Additional Share, all distributions of Temporary Investment Income, Investment Proceeds the General Partner shall assess a 25% reduction and liquidating distributions that (iii) the General Partner shall cause such Defaulting Limited Partner would otherwise receive, except to the extent of Investment Proceeds and the Final Distribution relating to Capital Contributions made by the Defaulting Limited Partner less be excluded from any expenses, deductions or losses (including such defaulting Partner’s share vote of the Aggregate Net Losses from Writedowns) allocated to such Limited Partner, provided that any amounts Partners. Any proceeds forfeited by the Defaulting Limited Partner or reduced by the General Partner pursuant to the preceding sentence shall be distributed among the other Non-Defaulting Partners in proportion to their Percentage Interests in the Investment or Partnership property giving rise to such distribution or, in the case of a distribution upon liquidation, in proportion to the liquidating distributions to them pursuant to Section 9.3, subject to the right of any such Partner not to have a distribution in kind made to it pursuant to Sections 3.4(b) and 9.3; or
(ii) assess up to a 33-1/3% reduction in the Capital Account balance and related Percentage Interest in Investments of the Defaulting Limited General Partner.
(ec) In the event that any The General Partner may, in its sole discretion cancel such Defaulting Limited Partner defaults in making a Partner's right to make further Capital Contribution Contributions and allocate such right to the Partnership (or any alternative investment vehicle formed pursuant to Section 2.9) for any Investment, the General Partner may require all of the non-defaulting Limited Partners to increase their Capital Contributions by an aggregate amount equal to the Capital Contribution defaulted on; provided that no Limited Partner will be required to fund amounts in excess or one of its Unpaid Capital Commitment. If the General Partner elects to require such increaseAffiliates, the General Partner shall deliver to each Non-Defaulting Partner written notice of such default as promptly as practicable after its occurrence and, thereafter, with respect to each Investment, the General Partner shall as promptly as practicable deliver to each such Non-Defaulting Partner a Payment Notice in respect of the Capital Contribution which and the Defaulting Limited Partner failed shall not be permitted to make. Subject make any further Capital Contributions to the proviso set forth above Partnership in this Section 8.3(e), such Payment Notice shall (i) call for a Capital Contribution by each such Non-Defaulting Partner in an amount equal to the amount event of such Non-Defaulting Partner’s Pro Rata Share of such additional Capital Contribution and (ii) specify a Payment Date for such Capital Contribution, which date shall be at least five (5) Business Days from the date of delivery of such Payment Notice by the General Partner. If any Limited Partner is not required to make a Capital Contribution in accordance with this Section 8.3(e) because such Capital Contribution would be in excess of such Limited Partner’s Unpaid Capital Commitment, then, subject to the proviso set forth in this Section 8.3(e), the General Partner shall send to each other Limited Partner which is not subject to such constraint and which is otherwise able to participate in such Investment a Payment Notice providing the amount of any additional Capital Contribution which such other Limited Partner shall be required to make as a result of such excess not being funded by the Limited Partner whose Unpaid Capital Commitment would have been exceeded, which amount shall bear the same ratio to the aggregate of the additional amounts payable by all such other Limited Partners as such other Limited Partner’s Unpaid Capital Commitment bears to the Unpaid Capital Commitments of all such other Limited Partners. The provisions of this Section 8.3(e) shall operate successively until either all Limited Partners able to participate in such Investment are subject to the constraint set forth above or the full amount of Capital Contribution of the Defaulting Limited Partner has been provided forcancellation.
(fd) No right, power or remedy conferred upon the General Partner in this Section 8.3 6.4 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 in this Section 8.3 6.4 or now or hereafter available at law or in equity or by statute or otherwise. No course of dealing between the General Partner and any Defaulting Limited Partner and no delay in exercising any right, power or remedy conferred in this Section 8.3 6.4 or now or hereafter existing at law or in equity or by statute or otherwise shall operate as a waiver or otherwise prejudice any such right, power or remedy. In addition to .
(e) The powers conferred upon the foregoing, General Partner in this Article VI shall not limit any actions available at law or in equity or by statute that the General Partner may in its sole discretion institute undertake against a lawsuit against any Defaulting Limited Partner for specific performance of its obligation to make Capital Contributions and any other payments to be made hereunder by a Limited Partner and to collect any overdue amounts hereunder, with interest on such overdue amounts calculated at the rate specified in Section 8.3(a), and each Limited Partner agrees to pay on demand all costs and expenses (including reasonable attorneys’ fees) incurred by or on behalf of the Partnership in connection with the enforcement of this Agreement against such Limited Partner as a result of a default by such Limited Partner.
(g) . Each Limited Partner acknowledges by its execution hereof of a Subscription Agreement that it has been admitted to the Partnership in reliance upon its agreements under this Section 8.3 (as well as the other provisions terms of this Agreement), that the General Partner and the Partnership may have no adequate remedy at law for a breach hereof and that damages resulting from a breach hereof may be impossible to ascertain at the time hereof or of such breach.
(h) For purposes of this Section 8.3, if any Defaulting Limited Partner is an entity the equity owners of which consist of two or more unaffiliated investors, the General Partner may, in its sole discretion, treat the owner of such entity that was responsible for such default as the Defaulting Limited Partner and may invoke the rights, powers and remedies specified herein separately with respect to such owner.
Appears in 1 contract
Defaulting Limited Partner. (a) Subject in all events to the provisions of Section 3.2, any Limited Partner that fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made may, in the discretion of the General Partner, be charged an Additional Amount additional amount on the unpaid balance of any such Capital Contributions or other payments at 8.0the Prime Rate plus 5.0% per annum from the date such balance was due and payable through the date full payment for such balance is actually made, and to the extent any of the foregoing amounts is not otherwise paid such amount may be deducted from any distribution to such Limited Partner. Any such Additional Amount additional amount owed to the Partnership shall will be allocated and distributed to the other non-defaulting Partners funding such Capital Contribution or other payment pro rata to their fundings thereof (and, if there are no fundings in respect of any such Capital Contribution or other payment, pro rata to their Capital Commitments).Commitments.
(b) If any Limited Partner fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made, then the Partnership shall will promptly provide written notice of such failure to such Limited Partner. If such Limited Partner fails to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice, then (i) such Limited Partner shall may, in the sole discretion of the General Partner, be deemed a “Defaulting Limited Partner” and (ii) the following Sections 8.3(c) through (h8.3(h) shall apply.will apply.
(c) The General Partner shall have the right to may determine, in its sole discretion, that whenever the vote, consent or decision of a Limited Partner or of the Partners is required or permitted pursuant to this Agreement, except as required by the Act, any Defaulting Limited Partner shall may not be entitled to participate in such vote or consent, or to make such decision, and such vote, consent or decision shall will be tabulated or made as if such Defaulting Limited Partner were not a Partner.Partner.
(d) The General Partner shall have the right may, in its sole discretion discretion, take any action including any or all of the following actions with respect to either:a Defaulting Limited Partner:
(i) determine that a Defaulting Limited Partner shall (A) not be entitled to make any further Capital Contributions to the Partnership; provided that the liability of such Defaulting Limited Partner to make Capital Contributions to the Partnership pursuant Sections 3.1(a)(iii), 3.1(a)(iv), 3.1(a)(v), and 5.2(b), and Section 6 of Appendix A shall in any case remain unchanged as if such default had not occurred and (B) will forfeit to the Non- Defaulting nondefaulting Partners as recompense for damages suffered, and the Partnership shall will withhold (for the account of such other Partners), all distributions of Temporary Investment Income, Investment Investments Proceeds and liquidating distributions that such Defaulting Limited Partner would otherwise receive, except ;
(ii) assess up to a 100% reduction in the extent Capital Account balance and related Percentage Interest in Investments of Investment Proceeds and the Final Distribution relating to Capital Contributions made by the Defaulting Limited Partner less any expenses, deductions or losses (including such defaulting Partner’s share of the Aggregate Net Losses from Writedowns) allocated to such Limited Partner, provided that any amounts forfeited by the Defaulting Limited Partner or reduced by the General Partner pursuant to the preceding sentence shall will be distributed among the other Non-Defaulting Partners in proportion to their Percentage Interests Interest in the Investment or Partnership property giving rise to such distribution or, in the case of a distribution upon liquidation, in proportion to the liquidating distributions to them pursuant to Section 9.3, subject to the right of any such Partner not to have a distribution in kind made to it pursuant to Sections 3.4(b) and 9.3; or, provided that if all Limited Partners are in default, then the General Partner’s Percentage Interest shall be deemed to be 100%;
(iiiii) assess up upon delivery of written notice to the Defaulting Limited Partner, cause the Defaulting Limited Partner to transfer (and upon receipt of such notice such Defaulting Limited Partner will so transfer) all of its Interest to one or more nondefaulting Partners, which have agreed to purchase such Interest effective immediately at a 33-1/3% reduction transfer price as the General Partner may determine;
(iv) upon delivery of written notice to the Defaulting Limited Partner, sell the entire Interest of the Defaulting Limited Party to any third party or third parties acceptable to the General Partner at a price acceptable to the General Partner and who otherwise qualify for admission as a Partner in the Partnership. The proceeds of any such sale shall be applied first to reimburse the General Partner for any costs incurred on behalf of the Partnership in connection with such sale; then to pay interest to the Partnership at the prime rate plus 5% on any late payment from the date payment was due through the date of sale; then to pay the Defaulting Limited Partner one-quarter of the amounts standing to credit of such Defaulting Limited Partner’s Capital Account balance as of the date of such sale. Any remaining proceeds shall be retained by the Partnership, and related Percentage Interest in Investments the Defaulting Limited Partner shall have no further rights thereto. The transferee shall be treated as a substituted Partner as of the effective date of transfer, and shall be obligated to assume the entire remaining amount of the Defaulting Limited Partner’s Unpaid Capital Commitment and the Defaulting Limited Partner shall cease to be a Limited Partner and have no further rights in or against the other Partners or under this Agreement; or
(v) accept a late contribution from the Defaulting Limited Partner, with applicable interest, in satisfaction of its then-outstanding obligation to contribute hereunder, if the General Partner determines in its sole discretion that such a late contribution will not jeopardize the activities and operations of the Partnership.
(e) In the event that any Limited Partner defaults in making a Capital Contribution to the Partnership (or any alternative investment vehicle formed pursuant Alternative Investment Vehicle) or any Combined Limited Partner defaults in making a capital contribution to Section 2.9) for a Parallel Vehicle (or any InvestmentAlternative Investment Vehicle), the General Partner may require all of the non-defaulting Limited nondefaulting Combined Partners to increase their Capital Contributions (or capital contributions to such Parallel Vehicles, as applicable) by an aggregate amount equal to the Capital Contribution (or capital contribution to such Parallel Vehicle, as applicable) defaulted on; provided that no Limited Partner will be be required to fund amounts in excess of its Unpaid Capital Commitment. If the General Partner elects to require such increase, the General Partner shall will deliver to each Non-Defaulting nondefaulting Partner written notice of such default as promptly as practicable after its occurrence and, thereafter, with respect to each Investment, the General Partner shall will as promptly as practicable deliver to each such Non-Defaulting nondefaulting Partner a Payment Notice in respect of the Capital Contribution which the Defaulting Limited Partner (or defaulting Combined Limited Partner in a Parallel Vehicle or Alternative Investment Vehicle therefor) failed to make. Subject to the proviso set forth above in this Section 8.3(e), such Payment Notice shall will (i) call for a Capital Contribution by each such Non-Defaulting nondefaulting Partner in an amount equal to the amount of such Non-Defaulting nondefaulting Partner’s Pro Rata Share of such additional Capital Contribution and (ii) specify a Payment Date for such Capital Contribution, which date shall will be at least five (5) Business Days 10 calendar days from the date of delivery of such Payment Notice by the General Partner. If any Limited Partner is not required to make a Capital Contribution in accordance with this Section 8.3(e) because such Capital Contribution would be in excess of such Limited Partner’s Unpaid Capital Commitment, then, subject to the proviso set forth in this Section 8.3(e), the General Partner shall will send to each other Limited Partner which is not subject to either such constraint and which is otherwise able to participate in such Investment a Payment Notice providing the amount of any additional Capital Contribution which such other Limited Partner shall will be required to make as a result of such excess not being funded by the Limited Partner whose Unpaid Capital Commitment would have been exceeded, which amount shall bear the same ratio to the aggregate of the additional amounts payable by all such other Limited Partners as such other Limited Partner’s Unpaid Capital Commitment bears to the Unpaid Capital Commitments of all such other Limited Partners. The provisions of this Section 8.3(e) shall will operate successively until either all Limited Partners able to participate in such Investment are subject to the constraint set forth above with respect to Unpaid Capital Commitments or the full amount of the Capital Contribution of the Defaulting Limited Partner has been provided for.
(f) No right, power or remedy conferred upon the General Partner in this Section 8.3 shall be is exclusive, and each such right, power or remedy shall be is cumulative and in addition to every other right, power or remedy whether conferred in this Section 8.3 or now or hereafter available at law or in equity or by statute or otherwise. No course of dealing between the General Partner and any Defaulting Limited Partner and no delay in exercising any right, power or remedy conferred in this Section 8.3 or now or hereafter existing at law or in equity or by statute or otherwise shall will operate as a waiver or otherwise prejudice any such right, power or remedy. In addition to the foregoing, the General Partner may in its sole discretion institute a lawsuit against any Defaulting Limited Partner for specific performance of its obligation to make Capital Contributions and any other payments to be made hereunder by a Limited Partner pursuant to this Agreement and to collect any overdue amounts hereunder. Notwithstanding any other provision of this Agreement, with interest on such overdue amounts calculated at the rate specified in Section 8.3(a), and each Limited Partner agrees to pay on demand all costs and expenses (including reasonable attorneys’ fees) incurred by or on behalf of the Partnership in connection with the enforcement of this Agreement against such Limited Partner sustained as a result of a default by such Limited PartnerPartner and that any such payment shall not constitute a Capital Contribution to the Partnership.
(g) Each Limited Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 8.3 (as well as the other provisions of this Agreement), that the General Partner and the Partnership may have no adequate remedy at law for a breach hereof and that damages resulting from a breach hereof may be impossible to ascertain at the time hereof or of such breach.
(h) For purposes of this Section 8.3, if any Defaulting Limited Partner is an entity the equity owners of which consist of two or more unaffiliated investors, the General Partner may, in its sole discretion, treat the owner of such entity that was responsible for such default as the Defaulting Limited Partner and may invoke the rights, powers and remedies specified herein separately with respect to such owner.owner.
Appears in 1 contract
Sources: Limited Partnership Agreement
Defaulting Limited Partner. (a) Subject in all events to the provisions of Section 3.2, any Any Limited Partner that fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made may, in the discretion of the General Partner, be charged an Additional Amount additional amount on the unpaid balance of any such Capital Contributions or other payments at 8.0the Prime Rate plus 2.0% per annum from the date such balance was due and payable through the date full payment for such balance is actually made, and to the extent any of the foregoing amounts is not otherwise paid such amount may be deducted from any distribution to such Limited Partner. Any such Additional Amount additional amount owed to the Partnership shall be allocated and distributed to the other Partners funding such Capital Contribution or other payment pro rata to their fundings thereof (and, if there are no fundings in respect of any such Capital Contribution or other payment, pro rata to their Capital Commitments).
(b) If any Limited Partner fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made, then the Partnership shall promptly provide written notice of such failure to such Limited Partner. If such Limited Partner fails to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice, then (i) such Limited Partner shall be deemed a “Defaulting Limited Partner” and (ii) the following Sections 8.3(c) through (h) shall apply.
(c) The General Partner shall have the right to determine, in its sole discretion, that whenever the vote, consent or decision of a Limited Partner or of the Partners is required or permitted pursuant to this Agreement, except as required by the Act, any Defaulting Limited Partner shall not be entitled to participate in such vote or consent, or to make such decision, and such vote, consent or decision shall be tabulated or made as if such Defaulting Limited Partner were not a Partner.
(d) The Notwithstanding anything to the contrary in this Agreement, the General Partner shall have the right in its sole discretion to either:
(i) determine that a Defaulting Limited Partner shall (A) not be entitled to make any further Capital Contributions to the Partnership; provided that the liability of such Defaulting Limited Partner to make Capital Contributions to the Partnership pursuant to Sections 3.1(a)(iii3.1(a)(ii), 3.1(a)(iv)4.4, 3.1(a)(v), 5.2(b) and 5.2(b), and Section 6 of Appendix A 10.6 shall in any case remain unchanged as if such default had not occurred and (B) forfeit to the Non- Non-Defaulting Partners as recompense for damages suffered, and the Partnership shall withhold (for the account of such other Partners), all distributions of Temporary Investment Income, Investment Current Proceeds, Disposition Proceeds and liquidating distributions that such Defaulting Limited Partner would otherwise receive, except to the extent of Investment Disposition Proceeds and the Final Distribution relating to Capital Contributions made by the Defaulting Limited Partner less any expenses, deductions or losses (including such defaulting Partner’s share of the Aggregate Net Losses from Writedowns) allocated to such Defaulting Limited Partner, ; provided that any amounts forfeited by the Defaulting Limited Partner or reduced by the General Partner pursuant to the preceding sentence shall be distributed among the other Non-Defaulting Partners in proportion to their Percentage Interests in the Investment or Partnership property giving rise to such distribution or, in the case of a distribution upon liquidation, in proportion to the liquidating distributions to them pursuant to Section 9.3, subject to the right of any such Partner not to have a distribution in kind made to it pursuant to Sections 3.4(bSection 9.3;
(ii) upon delivery of written notice to the Defaulting Limited Partner, cause the Defaulting Limited Partner to transfer (and 9.3upon receipt of such notice such Defaulting Limited Partner shall so transfer) all of its Interest to one or more Limited Partners selected by the General Partner in its sole discretion which have agreed to purchase such Interest, effective immediately, at a transfer price equal to the lesser of (i) 50% of such Defaulting Limited Partner’s Capital Account and (b) 50% of the Fair Market Value of the Defaulting Limited Partner’s Interest; or
(iiiii) assess up to a 33-1/3100% reduction in the Capital Account balance and related Percentage Interest in Investments of the Defaulting Limited Partner.
(e) In the event that any Limited Partner defaults in making a Capital Contribution to the Partnership (or any alternative investment vehicle formed pursuant to Section 2.9) for any Investment, the General Partner may require all of the non-defaulting Limited Partners to increase their Capital Contributions by an aggregate amount equal to the Capital Contribution defaulted on; provided that no Limited Partner will be required to fund amounts in excess of its Unpaid Capital Commitment. If the General Partner elects to require such increase, the General Partner shall deliver to each Non-Defaulting Partner written notice of such default as promptly as practicable after its occurrence and, thereafter, with respect to each Investment, the General Partner shall as promptly as practicable deliver to each such Non-Defaulting Partner a Payment Notice in respect of the Capital Contribution which the Defaulting Limited Partner failed to make. Subject to the proviso set forth above in this Section 8.3(e), such Payment Notice shall (i) call for a Capital Contribution by each such Non-Defaulting Partner in an amount equal to the amount of such Non-Defaulting Partner’s Pro Rata Share of such additional Capital Contribution and (ii) specify a Payment Date for such Capital Contribution, which date shall be at least five (5) Business Days from the date of delivery of such Payment Notice by the General Partner. If any Limited Partner is not required to make a Capital Contribution in accordance with this Section 8.3(e) because such Capital Contribution would be in excess of such Limited Partner’s Unpaid Capital Commitment, then, subject to the proviso set forth in this Section 8.3(e), the General Partner shall send to each other Limited Partner which is not subject to such constraint and which is otherwise able to participate in such Investment a Payment Notice providing the amount of any additional Capital Contribution which such other Limited Partner shall be required to make as a result of such excess not being funded by the Limited Partner whose Unpaid Capital Commitment would have been exceeded, which amount shall bear the same ratio to the aggregate of the additional amounts payable by all such other Limited Partners as such other Limited Partner’s Unpaid Capital Commitment bears to the Unpaid Capital Commitments of all such other Limited Partners. The provisions of this Section 8.3(e) shall operate successively until either all Limited Partners able to participate in such Investment are subject to the constraint set forth above or the full amount of Capital Contribution of the Defaulting Limited Partner has been provided for.
(f) No right, power or remedy conferred upon the General Partner in this Section 8.3 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 in this Section 8.3 or now or hereafter available at law or in equity or by statute or otherwise. No course of dealing between the General Partner and any Defaulting Limited Partner and no delay in exercising any right, power or remedy conferred in this Section 8.3 or now or hereafter existing at law or in equity or by statute or otherwise shall operate as a waiver or otherwise prejudice any such right, power or remedy. In addition to the foregoing, the General Partner may in its sole discretion institute a lawsuit against any Defaulting Limited Partner for specific performance of its obligation to make Capital Contributions and any other payments to be made hereunder by a Limited Partner and to collect any overdue amounts hereunder, with interest on such overdue amounts calculated at the rate specified in Section 8.3(a), and each Limited Partner agrees to pay on demand all costs and expenses (including reasonable attorneys’ fees) incurred by or on behalf of the Partnership in connection with the enforcement of this Agreement against such Limited Partner as a result of a default by such Limited Partner.
(gf) Each Limited Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 8.3 (as well as the other provisions of this Agreement), that the General Partner and the Partnership may have no adequate remedy at law for a breach hereof and that damages resulting from a breach hereof may be impossible to ascertain at the time hereof or of such breach. It is specifically agreed that any amount due to be paid, forfeited or otherwise deducted from any amount otherwise due to be paid to any Limited Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VIII constitutes a specified penalty or consequence permitted by Section 17-306 of the Act.
(hg) For purposes of this Section 8.3, if any Defaulting Limited Partner is a Feeder Fund or an entity the equity owners of which consist of two or more unaffiliated investors, the General Partner may, in its sole discretion, treat the investor in such Feeder Fund or owner of such entity that was responsible for such default as the Defaulting Limited Partner and may invoke the rights, powers and remedies specified herein separately with respect to such owner.
Appears in 1 contract
Sources: Limited Partnership Agreement (Corsair Capital LLC)
Defaulting Limited Partner. (a) Subject in all events to the provisions of Section 3.2, any Any Limited Partner that fails to make, when due, any portion of the Capital Contribution Contributions required to be contributed made by such Limited Partner pursuant to this Agreement or and the Subscription Agreement to make any other payment required to be made by it hereunder when required to be made which such Limited Partner is a party may, in the discretion of the General Partner, be charged an Additional Amount additional amount on the unpaid balance of any such Capital Contributions or other payments Contribution at 8.0% per annum the Default Rate from the date such balance was due and payable through the date full payment for such balance is actually made, and to the extent any of the foregoing amounts such additional amount is not otherwise paid such additional amount may be deducted from any distribution otherwise payable to such Limited Partner. Any such Additional Amount owed to the Partnership shall be allocated and distributed to the other Partners funding such Capital Contribution or other payment pro rata to their fundings thereof (and, if there are no fundings in respect of any such Capital Contribution or other payment, pro rata to their Capital Commitments).
(b) If any Limited Partner fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or and the Subscription Agreement to make any other payment required to be made by it hereunder when required to be madewhich such Limited Partner is a party, then the Partnership shall promptly provide written notice of such failure to such Limited Partner. If such Limited Partner fails to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice, then (i) such Limited Partner shall be deemed a “"Defaulting Limited Partner” " and (ii) the following Sections 8.3(c10.8(c) through (h) shall apply.
(c) The General Partner shall have the right to determine, in its sole discretion, that whenever the vote, consent or decision of a Limited Partner or of the Partners is required or permitted pursuant to this Agreement, except as required by the Act, any Defaulting Limited Partner shall not be entitled to participate in such vote or consent, or to make such decision, and such vote, consent or decision shall be tabulated or made as if such Defaulting Limited Partner were not a Partner.
(d) The General Partner shall have the right in its sole discretion to either:
either (ii)(A) determine that a Defaulting Limited Partner shall (A) not be entitled to make any further Capital Contributions to the Partnership; provided that the liability of such Defaulting Limited Partner to make Capital Contributions to the Partnership pursuant Sections 3.1(a)(iii), 3.1(a)(iv), 3.1(a)(v), and 5.2(b), and Section 6 of Appendix A shall in any case remain unchanged as if such default had not occurred and (B) forfeit to the Non- Defaulting non-defaulting Partners as recompense for damages suffered, and the Partnership shall withhold (for the account of such other Partners), all distributions of Temporary Investment Income, Investment Proceeds Operating Cash Flow and Capital Cash Flow and liquidating distributions that such Defaulting Limited Partner would otherwise receive, except and (B) effect a forfeiture by such Limited Partner of 20% of its aggregate Partnership Interest (including 20% of its Capital Account balance); or (ii) upon delivery of written notice to the extent of Investment Proceeds and the Final Distribution relating to Capital Contributions made by Defaulting Limited Partner, cause the Defaulting Limited Partner less to transfer all of its interest in the Partnership to one or more other Partners (or any expenses, deductions other Person or losses (including such defaulting Persons to the extent not purchased by any Partner’s share of the Aggregate Net Losses from Writedowns) allocated to such Limited Partner, provided that any amounts forfeited by the Defaulting Limited Partner or reduced selected by the General Partner pursuant in its sole discretion, which have agreed to the preceding sentence shall be distributed among the other Non-Defaulting Partners in proportion purchase such interest at a transfer price equal to their Percentage Interests in the Investment or Partnership property giving rise to at least 80% of such distribution or, in the case of a distribution upon liquidation, in proportion to the liquidating distributions to them pursuant to Section 9.3, subject to the right of any such Partner not to have a distribution in kind made to it pursuant to Sections 3.4(b) and 9.3; or
(ii) assess up to a 33-1/3% reduction in the Capital Account balance and related Percentage Interest in Investments of the Defaulting Limited Partner's Capital Account balance.
(e) In the event that any a Limited Partner defaults in making all or any portion of a Capital Contribution to the Partnership (or any alternative investment vehicle formed pursuant to Section 2.9) for any InvestmentPartnership, the General Partner may require all of the non-non- defaulting Limited Partners to increase their Capital Contributions by an aggregate amount equal to the Capital Contribution defaulted onof the Defaulting Limited Partner on which it defaulted; provided that no Limited Partner will be required to fund contribute any amounts in excess of its Unpaid Capital CommitmentUnfunded Commitment without such Limited Partner's consent. If the General Partner elects to require such increase, the General Partner shall deliver to each Nonnon-Defaulting defaulting Partner written notice of such default as promptly as practicable after its occurrence and, thereafter, with respect to each Investment, the General Partner shall as promptly as practicable deliver to each such Nonnon-Defaulting defaulting Partner a Payment Capital Call Notice in respect of the Capital Contribution which the Defaulting Limited Partner failed to make. Subject to the proviso provisos set forth above in this Section 8.3(e10.8(e), such Payment Capital Call Notice shall (i) call for a Capital Contribution by each such Nonnon-Defaulting defaulting Partner in an amount equal to the amount of such Nonnon-Defaulting defaulting Partner’s Pro Rata Share 's pro rata share of such additional Capital Contribution Contribution, based on the Unfunded Commitments of the Limited Partners, and (ii) specify a Payment Date for such Capital Contribution, which date shall be at least five (5) Business Days ten calendar days from the date of delivery of such Payment Capital Call Notice by the General Partner. If any Limited Partner is not required to make a Capital Contribution in accordance with this Section 8.3(e10.8(e) because such Capital Contribution would be in excess of such Limited Partner’s Unpaid Capital 's Unfunded Commitment, then, subject to the proviso provisos set forth in this Section 8.3(e10.8(e), the General Partner shall send to each other Limited Partner which is not subject to such constraint and which is otherwise able to participate in such Investment a Payment Capital Call Notice providing the amount of any additional Capital Contribution which such other Limited Partner shall be required to make as a result of such excess not being funded by the Limited Partner whose Unpaid Capital Commitment would have been exceededwhich is subject to such constraint, which amount shall bear the same ratio to the aggregate of the additional amounts payable by all such other non-defaulting Limited Partners as such other Limited Partner’s Unpaid Capital 's Unfunded Commitment bears to the Unpaid Capital Unfunded Commitments of all such other non-defaulting Limited Partners. The provisions of this Section 8.3(e10.8(e) shall operate successively until either all Limited Partners able to participate in such Investment are subject to the such constraint set forth above or the full amount of the defaulted Capital Contribution of the Defaulting Limited Partner has been provided for.
(f) No right, power or remedy conferred upon the General Partner in this Section 8.3 10.8 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 in this Section 8.3 10.8 or now or hereafter available at law or in equity or by statute or otherwise. No course of dealing between the General Partner and any Defaulting Limited Partner and no delay in exercising any right, power or remedy conferred in this Section 8.3 10.8 or now or hereafter existing at law or in equity or by statute or otherwise shall operate as a waiver or otherwise prejudice any such right, power or remedy. In addition to the foregoing, the General Partner may in its sole discretion institute a lawsuit against any Defaulting Limited Partner for specific performance of its obligation to make Capital Contributions and any other payments to be made hereunder by a Limited Partner and to collect any overdue amounts hereunder, with interest on such overdue amounts calculated at the rate specified in Section 8.3(a), and each Limited Partner agrees to pay on demand all costs and expenses (including reasonable attorneys’ fees) incurred by or on behalf of the Partnership in connection with the enforcement of this Agreement against such Limited Partner as a result of a default by such Limited Partner.
(g) Each Limited Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 8.3 (as well as the other provisions of this Agreement and in its Subscription Agreement), that the General Partner and the Partnership may have no adequate remedy at law for a breach hereof of such agreements and that damages resulting from a breach hereof of such agreements may be impossible to ascertain at the time hereof or of such breach.
(h) For purposes of this Section 8.310.8, if any Defaulting Limited Partner is an entity any Entity the equity owners of which consist of two or more unaffiliated investors, the General Partner may, in its sole discretion, treat the owner of such entity that was responsible for such default (and not such entity or any general partner, managing member or other controlling person of such entity) as the Defaulting Limited Partner and may invoke the rights, powers and remedies specified herein separately with respect to such owner, and hold such owner solely responsible for such default.
Appears in 1 contract
Sources: Limited Partnership Agreement (Hines Real Estate Investment Trust Inc)
Defaulting Limited Partner. (a) Subject in all events to the provisions of Section 3.2, any Limited Partner that fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made may, in the discretion of the General Partner, be charged an Additional Amount on the unpaid balance of any such Capital Contributions or other payments at 8.0% per annum from the date such balance was due and payable through the date full payment for such balance is actually made, and to the extent any of the foregoing amounts is not otherwise paid such amount may be deducted from any distribution to such Limited Partner. Any such Additional Amount owed to the Partnership shall be allocated and distributed to the other Partners funding such Capital Contribution or other payment pro rata to their fundings thereof (and, if there are no fundings in respect of any such Capital Contribution or other payment, pro rata to their Capital Commitments).
(b) If any Limited Partner fails to make, when due, any portion of the a Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made, then the Partnership shall promptly provide written notice of such failure to such Limited Partner. If such Limited Partner fails to make such Capital Contribution or such other payment within five (5) Business Days after receipt of such notice, then (i) the Partnership shall promptly provide a subsequent written notice of such failure to such Limited Partner. If such Limited Partner fails to make such Capital Contribution or such other payment within 20 Business Days after receipt of such subsequent written notice, then, for so long as such Limited Partner fails to make such Capital Contribution or such other payment, such Limited Partner shall be deemed a “Defaulting Limited Partner” and the remaining provisions of this Section 3.4 shall apply.
(iib) Any Defaulting Limited Partner may, in the following Sections 8.3(c) sole discretion of the General Partner and in addition to any other remedy contained herein, be charged an additional amount on the unpaid balance of any Capital Contributions or other payments at the Past Due Rate from the date such balance was due and payable through the date full payment for such balance is actually made, and to the extent such additional amount is not otherwise paid such additional amount may be deducted from any distribution to the Limited Partner. Any such additional amount paid to the Partnership (hor retained by the Partnership from distributions otherwise payable to such Defaulting Limited Partner) shall applybe allocated and distributed to the other Partners pro rata on the basis of their respective Commitments.
(c) The General Partner shall have the right to determine, in its sole discretion, that whenever the whether or not any Defaulting Limited Partner shall be entitled to participate in any vote or consent, or decision with respect to any vote, consent or decision of a Limited Partner or of the Partners is required or permitted pursuant to by such Defaulting Limited Partner under this Agreement, except as required by . If the Act, any Defaulting General Partner determines that such Limited Partner shall not be entitled to participate in any such vote vote, consent or consent, or to make such decision, and such vote, consent or decision shall be tabulated or made as if such Defaulting Limited Partner were not a Partner (and the terms “Required Interest” and “Majority in Interest” shall be calculated without regard to the Interests of such Defaulting Limited Partner).
(d) The i) In accordance with the other provisions of this Section 3.4(d), the General Partner Partner, in its sole discretion, shall have the right in its sole discretion right, but not the obligation, to either:
allow the Partners (iother than the Defaulting Limited Partner) determine that a to purchase, and to cause the Defaulting Limited Partner shall to sell (without any action required of the Limited Partner), the Defaulting Limited Partner’s Interest for a price equal to the lesser of (A) not be entitled to make any further Capital Contributions to 75% of the Partnership; provided that fair market value of such Defaulting Limited Partner’s Interest and (B) 75% of the liability capital account balance of such Defaulting Limited Partner existing as of the date of the General Partner’s notice to make Capital Contributions to the Partnership pursuant Sections 3.1(a)(iii), 3.1(a)(iv), 3.1(a)(v), and 5.2(b), and Section 6 of Appendix A shall in any case remain unchanged as if such default had not occurred and (B) forfeit to the Non- Defaulting Partners as recompense for damages suffered, and the Partnership shall withhold (for the account of such other Partners), all distributions of Temporary Investment Income, Investment Proceeds and liquidating distributions that such Defaulting Limited Partner would otherwise receiveof its delinquent Capital Contribution or other amounts owed; provided, except in no event shall the amount described in this clause (B) be less than zero (such amount, either (A) or (B), being referred to as the “Purchase Price”). To the extent of Investment Proceeds and that the Final Distribution relating to Capital Contributions made by the Defaulting Limited Partner less any expenses, deductions or losses Partners (including such defaulting Partner’s share of the Aggregate Net Losses from Writedowns) allocated to such Limited Partner, provided that any amounts forfeited by the Defaulting Limited Partner or reduced by the General Partner pursuant to the preceding sentence shall be distributed among the other Non-Defaulting Partners in proportion to their Percentage Interests in the Investment or Partnership property giving rise to such distribution or, in the case of a distribution upon liquidation, in proportion to the liquidating distributions to them pursuant to Section 9.3, subject to the right of any such Partner not to have a distribution in kind made to it pursuant to Sections 3.4(b) and 9.3; or
(ii) assess up to a 33-1/3% reduction in the Capital Account balance and related Percentage Interest in Investments of than the Defaulting Limited Partner.
(e) In the event that any Limited Partner defaults in making a Capital Contribution have elected not to the Partnership (or any alternative investment vehicle formed pursuant to Section 2.9) for any Investment, the General Partner may require all of the non-defaulting Limited Partners to increase their Capital Contributions by an aggregate amount equal to the Capital Contribution defaulted on; provided that no Limited Partner will be required to fund amounts in excess of its Unpaid Capital Commitment. If the General Partner elects to require such increase, the General Partner shall deliver to each Non-Defaulting Partner written notice of such default as promptly as practicable after its occurrence and, thereafter, with respect to each Investment, the General Partner shall as promptly as practicable deliver to each such Non-Defaulting Partner a Payment Notice in respect of the Capital Contribution which purchase the Defaulting Limited Partner failed to make. Subject to the proviso set forth above in this Section 8.3(e), such Payment Notice shall (i) call for a Capital Contribution by each such Non-Defaulting Partner in an amount equal to the amount of such Non-Defaulting Partner’s Pro Rata Share of such additional Capital Contribution and (ii) specify a Payment Date for such Capital ContributionInterest, which date shall be at least five (5) Business Days from the date of delivery of such Payment Notice by the General Partner. If any Limited Partner is not required to make a Capital Contribution in accordance with this Section 8.3(e) because such Capital Contribution would be in excess of such Limited Partner’s Unpaid Capital Commitment, then, subject to the proviso set forth in this Section 8.3(e), the General Partner shall send to each other Limited Partner which is not subject to such constraint and which is otherwise able to participate in such Investment a Payment Notice providing the amount of any additional Capital Contribution which such other Limited Partner shall be required to make as a result of such excess not being funded by the Limited Partner whose Unpaid Capital Commitment would have been exceeded, which amount shall bear the same ratio to the aggregate of the additional amounts payable by all such other Limited Partners as such other Limited Partner’s Unpaid Capital Commitment bears to the Unpaid Capital Commitments of all such other Limited Partners. The provisions of this Section 8.3(e) shall operate successively until either all Limited Partners able to participate in such Investment are subject to the constraint set forth above or the full amount of Capital Contribution of the Defaulting Limited Partner has been provided for.
(f) No right, power or remedy conferred upon the General Partner in this Section 8.3 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 in this Section 8.3 or now or hereafter available at law or in equity or by statute or otherwise. No course of dealing between the General Partner and any Defaulting Limited Partner and no delay in exercising any right, power or remedy conferred in this Section 8.3 or now or hereafter existing at law or in equity or by statute or otherwise shall operate as a waiver or otherwise prejudice any such right, power or remedy. In addition to the foregoing, the General Partner may in its sole discretion institute a lawsuit against any Defaulting Limited Partner for specific performance of its obligation to make Capital Contributions and any other payments to be made hereunder by a Limited Partner and to collect any overdue amounts hereunder, with interest on such overdue amounts calculated at the rate specified in Section 8.3(a), and each Limited Partner agrees to pay on demand all costs and expenses (including reasonable attorneys’ fees) incurred by or on behalf of the Partnership in connection with the enforcement of this Agreement against such Limited Partner as a result of a default by such Limited Partner.
(g) Each Limited Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 8.3 (as well as the other provisions of this Agreement), that the General Partner and the Partnership may have no adequate remedy at law for a breach hereof and that damages resulting from a breach hereof may be impossible to ascertain at the time hereof or of such breach.
(h) For purposes of this Section 8.3, if any Defaulting Limited Partner is an entity the equity owners of which consist of two or more unaffiliated investors, then the General Partner may, in its sole discretion, treat allocate such portion of the owner Defaulting Limited Partner’s Interest not then elected to be purchased to the Partnership for purchase in accordance with Section 3.4(d)(iii). For the purposes of this Section 3.4(d), the fair market value of the Defaulting Limited Partner’s Interest shall be determined by the General Partner in good faith. In determining such entity fair market value, the General Partner may, but shall not be obligated to, obtain an evaluation or appraisal from an independent appraiser, investment advisor or investment banking firm with reasonable experience in the oil and gas industry, all fees and expenses of which shall be borne by the Defaulting Limited Partner, provided that was responsible for the Partnership shall have the right to pay such default as fees and expenses and deduct the amount from amounts payable to the Defaulting Limited Partner under this Section 3.4(d). At any time within 60 days following the determination of the fair market value of the Defaulting Limited Partner’s Interest, the Partners may purchase the Defaulting Limited Partner’s Interest in accordance with the provisions of Section 3.4(d)(ii). Upon tender of the consideration as set forth above to the Defaulting Limited Partner, the Partners or the Partnership, as applicable, shall be deemed to have purchased the Defaulting Limited Partner’s Interest and may invoke the rightsGeneral Partner shall amend Schedule A to reflect such Defaulting Limited Partner’s Commitment as zero. The payment of the Purchase Price to be made to the Defaulting Limited Partner pursuant to Sections 3.4(d)(ii) or 3.4(d)(iii), powers as applicable, is, and remedies specified herein separately shall be conclusively deemed to be, in complete liquidation and satisfaction of all the rights and interest of the Defaulting Limited Partner (and all Persons claiming by, through or under the Defaulting Limited Partner) in and with respect to such ownerthe Partnership including any interest in the Partnership, any rights to specific Partnership property and (insofar as the affairs of the Partnership are concerned) against the Partners and shall constitute a compromise to which all Partners have agreed pursuant to section 17-502(b) of the Act.
Appears in 1 contract
Sources: Agreement of Limited Partnership (Petro Resources Corp)
Defaulting Limited Partner. (a) Subject in all events to the provisions of Section 3.2, any Any Limited Partner that fails to make, when due, any portion of the Capital Contribution or other payments required to be contributed made by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made may, in the discretion of the General Partner, be charged an Additional Amount additional amount on the unpaid balance of any such Capital Contributions or other payments at 8.0the Prime Rate plus 2.0% per annum from the date such balance was due and payable through the date full payment for such balance is actually made, and to the extent any of the foregoing amounts such additional amount is not otherwise paid such additional amount may be deducted from any distribution to such Limited Partner. Any such Additional Amount additional amount owed to the Partnership shall be allocated and distributed to the other Partners funding such Capital Contribution or other payment pro rata to their fundings thereof (and, if there are no fundings in respect of any such Capital Contribution or other payment, pro rata to their Capital Commitments).
(b) If any Limited Partner fails to make, when due, any portion of the Capital Contribution required to be contributed made by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made, then the Partnership shall promptly provide written notice of such failure to such Limited Partner. If such Limited Partner fails to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice, then (i) such Limited Partner shall be deemed a “Defaulting Limited Partner” and (ii) the following Sections 8.3(c) through (hg) shall apply. Notwithstanding any provision of this Agreement to the contrary, if a Limited Partner fails to make, when due, the Capital Contribution required to be made by such Limited Partner for an Investment, the General Partner may in its sole and absolute discretion, without notice or the lapse of the foregoing time period, exclude such Limited Partner from participation in such Investment.
(c) The General Partner shall have the right to determine, in its sole discretion, that whenever the vote, consent or decision of a Limited Partner or of the Partners is required or permitted pursuant to this Agreement, except as required by the Act, any Defaulting Limited Partner shall not be entitled to participate in such vote or consent, or to make such decision, and such vote, consent or decision shall be tabulated or made as if such Defaulting Limited Partner were not a Partner.
(d) The General Partner shall have the right in its sole discretion to eitherto:
(i) (A) determine that a Defaulting Limited Partner shall (AI) not be entitled to make any further Capital Contributions to the PartnershipPartnership for Investments; provided provided, that the liability of such Defaulting Limited Partner to make Capital Contributions to the Partnership pursuant to Sections 3.1(a)(iii3.1(a)(iv) – (vii), 3.1(a)(iv)4.4, 3.1(a)(v), 5.2(b) and 5.2(b), and Section 6 of Appendix A 10.6 shall in any case remain unchanged as if such default had not occurred and (BII) forfeit to the Non- Defaulting non-defaulting Limited Partners as recompense for damages suffered, and the Partnership shall withhold (for the account of such other the nondefaulting Limited Partners), all distributions of Temporary Investment Income, Investment Proceeds and liquidating distributions that such Defaulting Limited Partner would otherwise receive, except to the extent that such distributions represent a return of Investment Proceeds and the Final Distribution relating capital to Capital Contributions made by the such Defaulting Limited Partner less any expenses, deductions or losses (including such defaulting Limited Partner’s share of the Aggregate Net Losses from Loss on all Writedowns) allocated to such Limited Partner, provided that any amounts forfeited by Partner and (B) assess up to a 25% reduction in the Capital Account balance of the Defaulting Limited Partner (which to the extent imposed shall reduce distributions to such Defaulting Limited Partner pursuant to the foregoing clause (i)). Any amounts withheld from the Defaulting Limited Partner by the Partnership or reduced by the General Partner pursuant to the preceding sentence shall be distributed among the other Non-Defaulting nondefaulting Limited Partners in proportion to their Percentage Interests in the Investment or Partnership property giving rise to such distribution or, in the case of a distribution upon liquidation, in proportion to the liquidating distributions to them pursuant to Section 9.3, subject to the right of any each such nondefaulting Limited Partner not to have a distribution in kind made to it pursuant to Sections 3.4(b3.2(b) and 9.3;
(ii) determine that a Defaulting Limited Partner is no longer entitled to make any further Capital Contributions to the Partnership for Investments; provided, that the liability of such Defaulting Limited Partner to make Capital Contributions to the Partnership pursuant to Sections 3.1(a)(iv), 3.1(a)(v), 3.1(a)(vi), 3.1(a)(vii), 4.4, 5.2(b) and 10.6 shall in any case remain unchanged as if such default had not occurred; or
(iiiii) assess up upon delivery of written notice to a 33-1/3% reduction in the Capital Account balance and related Percentage Interest in Investments of the Defaulting Limited Partner, cause the Defaulting Limited Partner to transfer (and upon receipt of such notice such Defaulting Limited Partner shall so transfer) all of its Interest to one or more Limited Partners selected by the General Partner in its sole discretion, which have agreed to purchase such Interest, effective immediately, at a transfer price equal to 75% of such Defaulting Limited Partner’s Capital Account.
(e) In the event that any a Limited Partner defaults in making a Capital Contribution to the Partnership (or any alternative investment vehicle formed pursuant to Section 2.9) for any InvestmentPartnership, the General Partner may procure with the agreement of one or more other Limited Partners that such Limited Partner(s) make the Capital Contribution defaulted upon or require all of the non-defaulting nondefaulting Limited Partners to increase their Capital Contributions by an aggregate amount equal to the Capital Contribution defaulted onof the Defaulting Limited Partner on which it defaulted; provided provided, that no Limited Partner will be required to fund amounts in excess of its Unpaid Capital Commitment. If the General Partner elects to require such increase, the General Partner shall deliver to each Non-Defaulting nondefaulting Partner written notice of such default as promptly as practicable after its occurrence and, thereafter, with respect to each Investment, the General Partner shall as promptly as practicable deliver to each such Non-Defaulting nondefaulting Partner a Payment Notice in respect of the Capital Contribution which the Defaulting Limited Partner failed to make. Subject to the proviso set forth above in this Section 8.3(e), such Payment Notice shall (i) call for a Capital Contribution by each such Non-Defaulting nondefaulting Partner in an amount equal to the amount of such Non-Defaulting nondefaulting Partner’s Pro Rata Share of such additional Capital Contribution and (ii) specify a Payment Date for such Capital Contribution, which date shall be at least five ten (510) Business Days calendar days from the date of delivery of such Payment Notice by the General Partner. If any Limited Partner is not required to make a Capital Contribution in accordance with this Section 8.3(e) because such Capital Contribution would be in excess of such Limited Partner’s Unpaid Capital Commitment, then, subject to the proviso set forth in this Section 8.3(e), the General Partner shall send to each other Limited Partner which is not subject to such the constraint set forth above and which is otherwise able to participate in such Investment a Payment Notice providing the amount of any additional Capital Contribution which such other Limited Partner shall be required to make as a result of such excess not being funded by the defaulting Limited Partner whose Unpaid Capital Commitment would have been exceededPartner, which amount shall bear the same ratio to the aggregate of the additional amounts payable by all such other Limited Partners as such other Limited Partner’s Unpaid Capital Commitment bears to the Unpaid Capital Commitments of all such other Limited Partners. The provisions of this Section 8.3(e) shall operate successively until either all Limited Partners able to participate in such Investment are subject to the constraint set forth above or the full amount of the Capital Contribution of the Defaulting Limited Partner has been provided for.
(f) No right, power or remedy conferred upon the General Partner in this Section 8.3 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 in this Section 8.3 or now or hereafter available at law or in equity or by statute or otherwise. No course of dealing between the General Partner and any Defaulting Limited Partner and no delay in exercising any right, power or remedy conferred in this Section 8.3 or now or hereafter existing at law or in equity or by statute or otherwise shall operate as a waiver or otherwise prejudice any such right, power or remedy. In addition to the foregoing, the The General Partner may also in its sole discretion institute a lawsuit against any Defaulting Limited Partner for specific performance of its obligation to make Capital Contributions and or any other payments to be made hereunder by a Limited Partner and to collect any overdue amounts hereunder, with interest on such overdue amounts calculated at the rate specified in Section 8.3(a), ) and each Limited Partner agrees to pay on demand all costs and expenses (including reasonable attorneys’ fees) incurred by or on behalf of the Partnership in connection with the enforcement of this Agreement against such Limited Partner as a result of a default by by, such Limited Partner.
(g) Each Limited Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 8.3 (as well as the other provisions of this Agreement), that the General Partner and the Partnership may have no adequate remedy at law for a breach hereof and that damages resulting from a breach hereof may be impossible to ascertain at the time hereof or of such breach.
(h) For purposes of this Section 8.3, if If any Limited Partner becomes a Defaulting Limited Partner is an entity the equity owners of which consist of two or more unaffiliated investorsPartner, the General Partner may, may withdraw from such Limited Partner’s sub-account in its sole discretion, treat the owner of such entity that was responsible for such default as the Defaulting Limited Partner and may invoke the rights, powers and remedies specified herein separately with respect to such ownerEscrow Account any funds therein.
Appears in 1 contract
Sources: Limited Partnership Agreement (JER Investors Trust Inc)
Defaulting Limited Partner. (a) Subject in all events to the provisions of Section 3.23.1, any Limited Partner (excluding any Limited Partner required or permitted to withdraw from the Partnership pursuant to Section 8.6 or 8.7) that fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner pursuant to this Agreement or to make any other payment required to be made by it hereunder when required to be made may, in the discretion of the General PartnerPartner and in addition to any other remedy contained herein, be charged an Additional Amount additional amount on the unpaid balance of any such Capital Contributions or other payments at 8.0a rate of 8% per annum annum, calculated from the date such balance was due and payable through the date full payment for such balance is actually made, and to the extent any of the foregoing amounts such additional amount is not otherwise paid such additional amount may be deducted from any distribution to such Limited Partner; provided that the General Partner shall notify a Limited Partner upon a failure to make a payment, and provided, further, that, in the event that such Limited Partner cures such failure to make a payment within five (5) Business Days of such notice, interest shall not accrue during such time. Any such Additional Amount additional amount owed to the Partnership shall be allocated and distributed to the other Limited Partners funding such Capital Contribution or other payment pro rata to their fundings thereof (and, if there are no fundings in respect of any such Capital Contribution or other payment, pro rata to their Capital Commitments).
(b) If any Limited Partner Partner, with respect to any Interest, fails to make, when due, any portion of the Capital Contribution required to be contributed by such Limited Partner with respect to such Interest pursuant to this Agreement or to make any other payment required to be made by it hereunder with respect to such Interest when required to be made, then the Partnership shall promptly provide written notice of such failure to such Limited Partner. If such Limited Partner fails to make such Capital Contribution or other payment within five fifteen (515) Business Days after receipt of such notice, then (i) such Limited Partner shall shall, solely with respect to such Interest, be deemed a “Defaulting Limited Partner” and (ii) the following Sections 8.3(c) through (hg) shall apply; provided that Sections 8.3(c) through (g) shall not apply to Limited Partners required or permitted to withdraw pursuant to Section 8.6 or 8.7 or to a Limited Partner that is excluded from an Investment under Section 3.2.
(c) The General Partner shall have the right to determine, in its sole and absolute discretion, that whenever the vote, consent or decision of a Limited Partner or of the Partners is required or permitted pursuant to this Agreement, except as required by the Act, any Defaulting Limited Partner shall not be entitled to participate in such vote or consent, or to make such decision, and such vote, consent or decision shall be tabulated or made as if such Defaulting Limited Partner were not a Partner.
(d) The With regard to any Defaulting Limited Partner and any Capital Contribution or other payment that such Defaulting Limited Partner fails to make, when due, the General Partner in its sole and absolute discretion shall have the right in its sole discretion to eitherto:
(i) determine that a Defaulting Limited Partner shall commence legal proceedings to collect (A) not be entitled such Capital Contribution or other payment, (B) interest amounting to make any further fifteen percent (15%) of such Capital Contributions to Contribution, or such lesser amount as permitted by law, and (C) the Partnership; provided that the liability cost of collection;
(ii) cause such Defaulting Limited Partner to make assign its Interest effective immediately upon written notice to any Person (including the General Partner, the Investment Manager and any Affiliate thereof), in which case the procedure set forth in the last sentence of this Section 8.3(d)(ii) for such assignment shall apply at a price equal to fifty percent (50%) of the aggregate amount of such Limited Partner’s Capital Contributions Account allocated to the Partnership Defaulting Limited Partner. The Interest required to be transferred pursuant Sections 3.1(a)(iii), 3.1(a)(iv), 3.1(a)(v)to this clause (ii) shall be acquired in accordance with the provisions of Section 8.2 and the payment of the price determined in accordance with this clause (ii) shall occur within ninety (90) days after the agreement to purchase the Interest in accordance herewith, and 5.2(b), and Section 6 the purchaser(s) of Appendix A such Interest shall in any case remain unchanged thereafter be admitted as if a substituted Limited Partner;
(iii) determine that such default had not occurred and (B) Defaulting Limited Partner shall forfeit to the Non- Defaulting non-defaulting Limited Partners as recompense for damages suffered, and the Partnership shall withhold (for the account of such other Limited Partners), up to fifty percent (50%) of such Defaulting Limited Partner’s Pro Rata Share of all distributions of Temporary Investment IncomeProceeds, Investment Current Proceeds, Disposition Proceeds and liquidating distributions that such Defaulting Limited Partner would otherwise receive, except to the extent of Investment the portion of Disposition Proceeds and the Final Distribution relating to representing a return of Capital Contributions made by the Defaulting Limited Partner less any expenses, deductions or losses (including such defaulting Partner’s share of the Aggregate Net Losses from Writedowns) allocated to such Limited Partner, provided that any . Any amounts forfeited by the Defaulting Limited Partner or reduced by the General Partner pursuant to the preceding sentence shall be distributed among the other Non-Defaulting Limited Partners in proportion to their Percentage Interests in the Investment or Partnership property giving rise to such distribution or, in the case of a distribution upon liquidation, in proportion to the liquidating distributions to them pursuant to Section 9.3;
(iv) reduce such Defaulting Limited Partner’s Capital Account and/or Percentage Interest by up to fifty percent (50%) as recompense for damages suffered;
(v) cause such Defaulting Limited Partner to withdraw from the Partnership effective immediately upon written notice. Such withdrawal shall be carried out in accordance with the provisions of Section 8.6(c);
(vi) require such Defaulting Limited Partner to pay its Pro Rata Share of the Management Fee and any Partnership liabilities and expenses; and
(vii) withhold (for the account of the non-defaulting Limited Partners) all distributions of Investment Proceeds and liquidating distributions that such Defaulting Limited Partner would otherwise receive, subject except to the right of any such Partner not to have a distribution in kind made to it pursuant to Sections 3.4(b) and 9.3; or
(ii) assess up to a 33-1/3% reduction in the Capital Account balance and related Percentage Interest in Investments extent of the portion of Investment Proceeds and the Final Distribution representing a return of Capital Contributions made by the Defaulting Limited Partner less any expenses, deductions or losses allocated to such Defaulting Limited Partner.
(e) In the event that any a Limited Partner defaults in making a Capital Contribution to the Partnership (or any alternative investment vehicle formed pursuant to Section 2.9) for any InvestmentPartnership, the General Partner may may, subject to Section 3.1, require all of the non-defaulting Limited Partners to increase their Capital Contributions by an aggregate amount equal to the Capital Contribution defaulted onof the Defaulting Limited Partner on which it defaulted; provided that no Limited Partner will be required to fund amounts in excess of its Unpaid Capital Commitment. If the General Partner elects to require such increase, the General Partner shall deliver to each Nonnon-Defaulting defaulting Limited Partner written notice of such default as promptly as practicable after its occurrence and, thereafter, with respect to each Investment, the General Partner shall as promptly as practicable deliver to each such Nonnon-Defaulting defaulting Limited Partner a Payment Notice in respect of the Capital Contribution which the Defaulting Limited Partner failed to make. Subject to Section 3.1 and the proviso set forth above in this Section 8.3(e), such Payment Notice shall (i) call for a Capital Contribution by each such Nonnon-Defaulting defaulting Limited Partner in an amount equal to the amount of such Nonnon-Defaulting defaulting Limited Partner’s Pro Rata Share of such additional Capital Contribution and (ii) specify a Payment Date for such Capital Contribution, which date shall be at least five (5) Business Days calendar days from the date of delivery of such Payment Notice by the General Partner. If any non-defaulting Limited Partner is not required to make a Capital Contribution in accordance with this Section 8.3(e) because such Capital Contribution would be in excess of such Limited Partner’s Unpaid Capital CommitmentCommitment or cause it to violate a law or regulation applicable to it, then, subject to Section 3.1 and the proviso set forth in this Section 8.3(e), the General Partner shall send to each other non-defaulting Limited Partner which is not subject to such the constraint specified above and which is otherwise able to participate in such Investment a Payment Notice providing the amount of any additional Capital Contribution which such other non-defaulting Limited Partner shall be required to make as a result of such excess not being funded by the Defaulting Limited Partner whose Unpaid Capital Commitment would have been exceededPartner, which amount shall bear the same ratio to the aggregate of the additional amounts payable by all such other non-defaulting Limited Partners as such other non-defaulting Limited Partner’s Unpaid Capital Commitment bears to the Unpaid Capital Commitments of all such other non-defaulting Limited Partners. The provisions of this Section 8.3(e) shall operate successively until either all non-defaulting Limited Partners able to participate in such Investment are subject to the constraint set forth above or the full amount of Capital Contribution of the Defaulting Limited Partner has been provided for.
(f) No right, power or remedy conferred upon the Partnership and the General Partner in this Section 8.3 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 in this Section 8.3 or now or hereafter available at law or in equity or by statute or otherwise. No course of dealing between the Partnership and the General Partner and any Defaulting Limited Partner and no delay in exercising any right, power or remedy conferred in this Section 8.3 or now or hereafter existing at law or in equity or by statute or otherwise shall operate as a waiver or otherwise prejudice any such right, power or remedy. In addition to the foregoing, the General Partner may in its sole discretion institute a lawsuit against any Defaulting Limited Partner for specific performance of its obligation to make Capital Contributions and any other payments to be made hereunder by a Limited Partner and to collect any overdue amounts hereunder, with interest on such overdue amounts calculated at the rate specified in Section 8.3(a), and each Limited Partner agrees to pay on demand all costs and expenses (including reasonable attorneys’ fees) incurred by or on behalf of the Partnership in connection with the enforcement of this Agreement against such Limited Partner as a result of a default by such Limited Partner.
(g) Each Limited Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 8.3 (as well as the other provisions of this Agreement), that the General Partner and the Partnership may have no adequate remedy at law for a breach hereof and that damages resulting from a breach hereof may be impossible to ascertain at the time hereof or of such breachbreach and that, therefore, the only adequate remedy for a breach hereof by a Limited Partner may be equitable relief.
(h) For purposes of Without limitation to the foregoing, it is agreed that the remedies, rights and powers as expressly set out in this Section 8.3, if any 8.3 in respect of a Defaulting Limited Partner is an entity constitute a good faith and reasonable pre-estimate of the equity owners loss likely to be suffered by the Partnership as a result of which consist of two or more unaffiliated investors, the General Partner may, in its sole discretion, treat the owner of such entity that was responsible for such default as the Defaulting Limited Partner and may invoke the rights, powers and remedies specified herein separately with respect to such ownerPartner’s default.
Appears in 1 contract
Sources: Limited Partnership Agreement