Common use of Failure to Make Capital Contributions Clause in Contracts

Failure to Make Capital Contributions. In the event that any Member fails to make any portion of its Capital Contribution called pursuant to Section 4.1.4 above by the Cash Needs Date (such Member is referred to herein as the “Non-Contributing Member”, and the unfunded amount, as the “Unfunded Amount”), the other Member (the “Contributing Member”) may, upon notice to the Non-Contributing Member, elect (as its sole remedies): (a) within five (5) days following the Cash Needs Date, to terminate the Cash Needs Notice and immediately receive back from the Company any such additional Capital Contributions tendered by it; (b) to deliver funds to the Company equal to the Unfunded Amount, which delivery shall be deemed a loan from the Contributing Member (a “Member Loan”) to the Non-Contributing Member that is simultaneously contributed by the Non-Contributing Member to the Company, and which shall bear interest at the Member Loan Rate, and shall be repaid in accordance with the provisions of Article V or (c) make an additional Capital Contribution to the Company in an amount equal to the Unfunded Amount (a “Substitute Capital Contribution”). Additionally, at any time prior to the repayment in full of a Member Loan by the applicable Non-Contributing Member, the Contributing Member shall have the additional right, upon five (5) days written notice to the Non-Contributing Member (during which five (5) day period, except as expressly provided below, the Non-Contributing Member may prepay in whole or in part any Member Loan), to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution to the Company made by the Contributing Member in an amount equal to the outstanding Member Loan, in which case (i) the portion of the Capital Contribution (deemed made by the Non-Contributing Member as a result of the Member Loan) that corresponds to the outstanding portion of the Member Loan will be deemed null and void, (ii) the Contributing Member will be deemed to contribute the Substitute Capital Contribution to the Company as of the conversion date, and (iii) the Percentage Interest of each Member shall be adjusted as set forth below. In the event that either Member makes a Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum of (1) the aggregate of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributions, plus (2) one hundred and fifty percent (150%) of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to the contrary, for so long as the Existing Credit Facility is outstanding and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent of the other Member, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital Contribution; provided, however, that simultaneously with the conclusion of the Hypo Period, each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable Non-Contributing Member given on such date, and for the avoidance of doubt such Non-Contributing Member shall not have the right to prepay such Member Loan prior to such conversion.

Failure to Make Capital Contributions. In the event that (a) If any Member fails to make any portion a contribution of its Additional Capital Contribution called required pursuant to Section 4.1.4 above by 4.2 on or prior to the Cash Needs Date contribution date specified in the applicable contribution notice, then a Member may send an additional notice (the “Default Notice”) to the Member failing to make such Capital Contribution, notifying the non-contributing Member of its failure to make such Capital Contribution, the amount to be contributed, the date such Capital Contribution was due, and requesting that such Capital Contribution be made immediately. If a Member fails to make such Capital Contribution within five Business Days after receiving such a Default Notice, then the Member failing to make such Capital Contribution shall be considered to have committed a default, and such Member shall be subject to the provisions of this Section 4.3(a) (such Member is referred to herein as the “Default Member” and the amount that such Member failed to contribute is referred to as the “Default Amount”) and the Member other than the Default Member (the “Non-Contributing Member”, and the unfunded amount, as the “Unfunded Amount”), the other Member (the “Contributing Defaulting Member”) may, upon notice shall have the right to the Non-Contributing Member, elect (as its sole remedies): (a) within five (5) days following the Cash Needs Date, to terminate the Cash Needs Notice and immediately receive back from the Company any such additional Capital Contributions tendered by it; (b) to deliver funds contribute an amount to the Company equal to the Unfunded Amount, which delivery Default Amount and the Members acknowledge and agree that any such contribution (a “Default Contribution”) made by a Non-Defaulting Member on behalf of a Default Member shall be deemed a loan from the Contributing Member (a “Member Loan”) to the Non-Contributing Member that is simultaneously contributed by the Non-Contributing Member to the Company, and which shall bear interest at the Member Loan Rate, and shall be repaid in accordance with the provisions of Article V or (c) make an additional Capital Contribution made by such Non-Defaulting Member to the Company in an amount equal to and upon making any such Default Contribution the Unfunded Amount (a “Substitute Capital Contribution”). Additionally, at any time prior to the repayment in full of a Member Loan by the applicable Non-Contributing Member, the Contributing Defaulting Member shall have the additional right, upon five (5) days written may elect by notice to the Non-Contributing Member Company to either (during which five (5i) day period, except as expressly provided below, increase the Undistributed Priority Capital of the Non-Contributing Defaulting Member may prepay in whole or in part any Member Loan), to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution to the Company made by the Contributing Member in an amount equal to the outstanding Member Loan, in which case (i) the portion of the Capital Default Contribution (deemed made by the Non-Contributing Member as a result of the Member Loan) that corresponds to the outstanding portion of the Member Loan will be deemed null and voidDefaulting Member, or (ii) adjust the Contributing Distribution Percentages of the Members pursuant to Section 4.3(b). If the Non-Defaulting Member will does not give notice to the Company electing either option at the time the Non-Defaulting Member makes such Default Contribution, the Non-Defaulting Member shall be deemed to contribute have elected to increase the Substitute Undistributed Priority Capital Contribution to the Company as of the conversion date, and (iii) Non-Defaulting Member by the Percentage Interest of each Member shall be adjusted as set forth below. In the event that either Member makes a Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum of (1) the aggregate amount of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributions, plus (2) one hundred and fifty percent (150%) of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to the contrary, for so long as the Existing Credit Facility is outstanding and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent of the other Member, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital Default Contribution; provided, however, that simultaneously with the conclusion of the Hypo Period, each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable Non-Contributing Member given on such date, and for the avoidance of doubt such Non-Contributing Member shall not have the right to prepay such Member Loan prior to such conversion.

Failure to Make Capital Contributions. In the event that any Member fails to make any portion of its Capital Contribution called pursuant to Section 4.1.4 above by the Cash Needs Date (such Member is referred to herein as the “Non-Contributing Member”, and the unfunded amount, as the “Unfunded Amount”), the other Member (the “Contributing Member”) may, upon notice to the Non-Contributing Member, elect (as its sole remedies): (a) within five (5) days following the Cash Needs Date, to terminate the Cash Needs Notice and immediately receive back from the Company any such additional Capital Contributions tendered by it; (b) to deliver funds to the Company equal to the Unfunded Amount, which delivery shall be deemed a loan from the Contributing Member (a “Member Loan”) to the Non-Contributing Member that is simultaneously contributed by the Non-Contributing Member to the Company, and which shall bear interest at the Member Loan Rate, and shall be repaid in accordance with the provisions of Article V or (c) make an additional Capital Contribution to the Company in an amount equal to the Unfunded Amount (a “Substitute Capital Contribution”). Additionally, at any time prior to the repayment in full of a Member Loan by the applicable Non-Contributing Member, the Contributing Member shall have the additional right, upon five (5) days written notice to the Non-Contributing Member (during which five (5) day period, except as expressly provided below, the Non-Contributing Member may prepay in whole or in part any Member Loan)Member, to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution to the Company made by the Contributing Member in an amount equal to the outstanding Member Loan, in which case (i) the portion of the Capital Contribution (deemed made by the Non-Contributing Member as a result of the Member Loan) that corresponds to the outstanding portion of the Member Loan will be deemed null and void, (ii) the Contributing Member will be deemed to contribute the Substitute Capital Contribution to the Company as of the conversion date, and (iii) the Percentage Interest of each Member shall be adjusted as set forth below. In the event that either Member makes a Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum of (1) the aggregate of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributions, plus (2) one hundred and fifty percent (150%) of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to the contrary, for so long as the Existing Credit Facility is outstanding and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent of the other Member, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital Contribution; provided, however, that simultaneously with the conclusion of the Hypo Period, each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable Non-Contributing Member given on such date, and for the avoidance of doubt such Non-Contributing Member shall not have the right to prepay such Member Loan prior to such conversion.