Sale of Defaulting Partner’s Partnership Interest Clause Samples
Sale of Defaulting Partner’s Partnership Interest. (a) Notwithstanding clause 8, the General Partner may Redeem and/or offer the Partnership Units of a Defaulting Partner for sale to the non-Defaulting Partners in proportion to existing Partnership Interests. The redemption or sale price for the Defaulting Partner’s Partnership Units will be a price equal to the original purchase price of those Partnership Units.
(b) Subject to paragraph (a) above, the Defaulting Partner's Partnership Units may be sold or otherwise disposed of by the General Partner to any person on terms no more favourable than those offered to the non-Defaulting Partners under paragraph (a) above.
(c) The Defaulting Partner irrevocably appoints the General Partner as its attorney to do all things reasonably necessary to sell and transfer its Partnership Units under this paragraph (c) and the Defaulting Partner will on demand ratify any actions of the General Partner as its attorney under this clause. The person or persons who acquire the Defaulting Partner’s Partnership Units pursuant to this clause 9.1:
(i) are not bound to check the regularity of the sale or the purchase price;
(ii) obtain title to the Partnership Units despite any irregularity in the sale; and
(iii) will not be subject to complaint or remedy by the former holder of the Partnership Units in respect of the purchase.
(d) Any proceeds of sale of Partnership Units under this clause will be applied in descending priority to:
(i) costs of sale and any attempted sale;
(ii) payment of the unpaid amount specified in any Drawdown Notice;
(iii) Default Interest due;
(iv) any costs reasonably incurred as a result of the default or owing from the Defaulting Partner to the Limited Partnership; and then
(v) the Defaulting Partner.
(e) Subject to compliance with this clause 9.1, the General Partner is not liable to any other Partner (including the Defaulting Partner) in respect of any sale under this clause 9.1.
(f) A Defaulting Partner whose Partnership Units have been compulsorily sold in accordance with this agreement immediately ceases to be a Partner notwithstanding any other provision of this agreement and remains liable to pay any shortfall between the amount received on sale and the amount outstanding under any Drawdown Notice, including any Default Interest to the date of payment of the amount due under the Drawdown Notice.
(g) Without limiting paragraph (e) above, a Defaulting Partner may not make any claim as to the adequacy of consideration received on the compulsory sale ...