Shortfall Contributions Clause Samples
The Shortfall Contributions clause requires parties to make additional payments if initial contributions or payments are insufficient to meet agreed obligations. In practice, this clause activates when there is a funding gap, such as in a joint venture or trust arrangement, obligating participants to cover the shortfall proportionally or as specified in the agreement. Its core function is to ensure that all financial commitments are fully met, thereby preventing underfunding and ensuring the smooth operation of the underlying arrangement.
POPULAR SAMPLE Copied 6 times
Shortfall Contributions. In the event that Additional Capital Contributions are required to be made by the Members under Section 3.2, and any Member has tendered its entire share of the required Additional Capital Contributions on or before the Tender Date (a "Contributing Member"), and the other Member has failed to tender its entire share of the required Additional Capital Contributions on or before the Tender Date (a "Non-Contributing Member"), the Contributing Member shall have the right to make Additional Capital Contributions to cover the shortfall amount. The amount of an Additional Capital Contribution made by the Contributing Member equal to the amount of Additional Capital Contribution that Non-Contributing Member failed to fund is the "Shortfall Contribution".
Shortfall Contributions
Shortfall Contributions. In addition to the Capital Contributions required by Sections 3.1(a) and 3.1(b), the Members shall make additional Capital Contributions to the Company from time to time at the written request of the Company (accompanied by such documentation and support as any Member shall reasonably request) in the amount by which Operating Expenses of the Company exceed the sum of Gross Revenues of the Company, undistributed cash Capital Contributions to the Company by the Members, investment income and dividends; provided, however, that in no event shall the First American Member be required to make the Capital Contribution contemplated by this Section 3.1(c) and in the event First American refuses to make such Capital Contribution, the Operating Percentage of each Member shall be adjusted by increasing or decreasing, as applicable, such Operating Percentage to equal the percentage which such Member’s Capital Account bears to the total of all Capital Accounts of all Members as a result of the Capital Contributions contemplated by this Section 3.1(c) after first adjusting such Capital Accounts to reflect the fair market value of the assets of the Company as permitted by Treasury Regulations §1.704-1(b)(2)(iv)(f), such adjustment to be made prior to taking into account the additional Capital Contribution contemplated by this Section 3.1(c). If an adjustment to the Capital Accounts of the Members is made pursuant to this Section 3.2(c), the books and records of the Company shall be amended accordingly.