Defaulting Participants Clause Samples
The Defaulting Participants clause defines the rights and obligations of parties when one or more participants fail to meet their contractual commitments. Typically, this clause outlines what constitutes a default, such as missed payments or failure to deliver goods or services, and specifies the remedies available to non-defaulting parties, which may include suspension of services, penalties, or termination of the agreement. Its core practical function is to allocate risk and provide a clear process for addressing breaches, thereby protecting the interests of compliant participants and maintaining the integrity of the contractual relationship.
Defaulting Participants. Lender may from time to time notify Borrowers of the participations sold by Lender hereunder and the share of each Participant’s interest in the Loan (such notification, as it may be amended from time to time, is referred to herein as a “Participation Notice”). Following Receipt by Borrowers of a Participation Notice, (i) it shall be the responsibility of the Participant identified in the Participation Notice to fund each Advance in an amount equal to such Participant’s share of each Advance as set forth in the Participation Notice, (ii) Borrowers will look solely to Participant identified in the Participation Notice for the funding of such portion of each Advance as is equal to the Participant’s share of such Advance as set forth in the Participation Notice, and (iii) notwithstanding any other provision of this Agreement or any other Loan Document, Lender shall not be obligated to fund any portion of an Advance which is the responsibility of a Participant as set forth in a Participation Notice. Following Receipt by Borrowers of a Participation Notice, any Participant which shall fail to make any Advance or other credit accommodation, disbursement, settlement or reimbursement required pursuant to the terms of any Loan Document, for so long as such failure shall remain in existence and uncured, shall be deemed to be a “Defaulting Participant.” After a Participant becomes a Defaulting Participant, and the circumstances causing such status shall not have been cured or waived, each of the Borrowers and Lender may, at their respective option, notify such Defaulting Participant of such Person’s intention to obtain a replacement Participant (“Replacement Participant”) for the Defaulting Participant, which Replacement Participant shall be an Eligible Assignee. In the event Borrowers or Lender, as applicable, obtain a Replacement Participant, the Borrowers shall look to the Replacement Participant rather than the Defaulting Participant for the funding of future Advances in an amount equal to the Defaulting Participant’s share of each Advance set forth in the Participation Notice. Any Replacement Participant shall not be responsible for, and such Replacement Participant’s interest in the Loan shall not be subject to, any liabilities of the Defaulting Participant to Borrowers accruing prior to the date of the transfer of the participation interest. Borrowers may not offset any amounts owing to Borrowers by the Defaulting Participant from any amounts owed by Borrowers...
Defaulting Participants. Should any Participant fail to make available to the Lead Lender its Pro Rata Share of any advance each defaulting Participant shall be considered a defaulting Lender for its respective Pro Rata Share of such advance. A defaulting Participant will be further obligated to pay interest to the Lead Lender at the rate specified in the Note for the period of delinquency of its Pro Rata Share. So long as any Participant is a defaulting Participant hereunder, it shall not have the right to consent or object to any matter requiring Participants’ consent. In addition to the remedies set forth in this Section 2(c), the Lead Lender shall be entitled to pursue all other remedies available at law or in equity against any defaulting Participant.
Defaulting Participants