Common use of Defaulting Partners Clause in Contracts

Defaulting Partners. (a) In the event any Partner fails to make, when due, any portion of a Capital Contribution required to be contributed by such Partner pursuant to this Agreement or any other payment required to be made by it hereunder, then the Partnership shall promptly provide written notice to such Partner, UST and SIGTARP of such failure. If such Partner fails to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice then such Partner shall be deemed a “Defaulting Partner” (the amount in respect of which a Defaulting Partner has defaulted being a “Defaulted Amount”) and the General Partner shall immediately notify UST and SIGTARP of such failure. (b) The Defaulted Amount may be deducted from any distribution of Temporary Investment Income, Investment Proceeds and liquidating distributions that such Defaulting Partner would otherwise receive. (c) In the event that any Partner defaults in making a Capital Contribution to the Partnership, the General Partner may require all of the Non- Defaulting Partners (other than UST) to increase their Capital Contributions by an aggregate amount equal to the Defaulted Amount. For the avoidance of doubt, UST shall not be required to increase its Capital Contributions in respect of any Defaulted Amount. (d) Each Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 7.3 (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 Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted by Section 17-306 of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each of the General Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Capital Contribution or any other payment required to be made by UST hereunder other than the remedies set forth in Section 7.3(b). (e) In the event any Partner (other than UST) becomes a Defaulting Partner, the General Partner shall have the right in its sole discretion to take any one, a combination or all of the following actions: (i) cause such Defaulting Partner to forfeit to the other Partners as recompense for damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), the Partnership may withhold (for the account of such Partners), all or any portion of distributions of Investment Proceeds or Temporary Investment Income that such Partner would otherwise receive, except to the extent of Investment Proceeds or Temporary Investment Income constituting a return of Capital Contributions made by such Defaulting Partner less any expenses, deductions or losses allocated to such Defaulting Partner, (ii) assess a fifty percent (50%) reduction, or such other greater or lesser reduction as permitted by applicable law, to the Capital Account of such Defaulting Partner, (iii) reduce or cancel the available Capital Commitment of the Defaulting Partner on such terms as the General Partner determines in its discretion (which may include leaving such Defaulting Partner obligated to make Capital Contributions with respect to Partnership Expenses); provided that the Capital Commitment of UST shall be reduced to the extent necessary to comply with Section 3.1(g) and (iv) institute proceedings against the Defaulting Partner to recover any unrecouped Defaulted Amount. Any amounts withheld from the Defaulting Partner by the Partnership pursuant to clause (i) above shall be allocated and distributed to the other Partners (other than UST) (A) in proportion to their respective Percentage Interests attributable to the Investment or Temporary Investment giving rise to such distribution, or (B) if such distribution is not attributable to an Investment or Temporary Investment, in proportion to their respective proportionate interests in the Partnership property or funds that produced such proceeds, as reasonably determined by the General Partner, or (C) in the case of a distribution upon dissolution, in proportion to the final distributions to them pursuant to Section 8.3. Any reductions in the Capital Accounts pursuant to clause (ii) above shall be allocated among the non-defaulting Partners (other than UST) that made Capital Contributions in respect of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts of the Partners shall be adjusted pursuant to Article IX to take account of changes to the Partners' Capital Accounts pursuant to this Section 7.3(e). (f) The General Partner shall have the right in its sole discretion to prohibit a Defaulting Partner from making any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary Investment, if any, with respect to which such Defaulting Partner initially defaulted) to the Partnership with respect to any Investment or Temporary Investment. Each such Defaulting Partner shall remain fully liable to the Partnership for its obligations hereunder, to the extent provided by law and subject to the limitations of this Agreement, as if such default had not occurred and shall be responsible for all expenses related to its default. (g) The General Partner shall have full power, in its sole discretion, without prejudice to any other rights or remedies the General Partner or the Partnership may have to require a Defaulting Partner (other than UST) to sell to the other Partners (other than Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital Commitments, such Defaulting Partner's Interest at a purchase price equal to the lesser of (x) the original cost of such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance of doubt, any sales and purchases of Interests pursuant to this Section 7.3(g) shall be subject to the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from UST. (h) The remedies set forth in this Section 7.3 shall not be exclusive of any other remedy which the Partnership or the Partners may have at law or in equity or under this Agreement against a Defaulting Partner (other than UST).

Appears in 10 contracts

Sources: Limited Partnership Agreement, Limited Partnership Agreement, Limited Partnership Agreement

Defaulting Partners. 6.6.1 Subject to Section 6.7 (a) In the event Excused Limited Partners), if any Partner fails to make, when due, make all or any portion of a any Capital Contribution or any other amount required to be contributed funded by such Limited Partner pursuant to the provisions of this Agreement or any corresponding agreement or with respect to any other Fund Vehicle (including, but not limited to, the obligation to return and contribute distributions to the Fund 11 Note that some investors require a cap (e.g., 110% of commitments) on total investments that may be possible through recycling. pursuant to Section 14.7 (Clawback) or Section 16.3 (Limited Partner Giveback)), the General Partner shall notify such Partner in writing of such failure (a “Default Notice”). If such failure continues for [five (5)] Business Days after receipt by such Limited Partner of the Default Notice, then such Partner shall be designated by the General Partner as in “Default” under this Agreement (a “Defaulting Partner”) and shall thereafter be subject to the provisions of this Section 6.6 (Defaulting Partners). The General Partner may, if it determines this to be in the best interests of the Fund and the Non-Defaulting Partners, choose not to designate any Partner as a Defaulting Partner and may agree to waive or permit the cure of any Default by a Partner, subject to such conditions as the General Partner and the Defaulting Partner may agree upon, provided that any such decision not to designate any Affiliated Partner as a Defaulting Partner or to waive or permit the cure of any Default by an Affiliated Partner shall be subject to the prior written consent of the Advisory Committee. 6.6.2 The General Partner shall inform the Limited Partners of the occurrence of any such Default and of any action taken by it with respect to any Defaulting Partner within [thirty (30)] days of the Defaulting Partner becoming a Defaulting Partner. 6.6.3 A Limited Partner that fails to make all or any portion of any Capital Contribution or other payment required pursuant to this Agreement on the relevant Due Date shall pay or reimburse the Fund for any Damages resulting therefrom. In addition, any amounts that are not duly paid on the relevant Due Date shall accrue interest at a rate of [10]% per annum from the Due Date as specified in the relevant Default Notice until the date the Limited Partner makes the Capital Contribution. Any proceeds received by the Fund pursuant to this Section 6.6.3 and Section 6.6.4, including any amounts that would otherwise have been distributed to such Defaulting Partner, shall (i) first be applied to reimburse the Fund Parties for any related costs and expenses incurred due to such Defaulting Partner’s Default as determined by the General Partner and notified to the Defaulting Partner by the General Partner, and (ii) thereafter be distributed to the Limited Partners who are not Defaulting Partners (the “Non-Defaulting Partners”) pursuant to Article 14 (Distributions; Allocations) if attributable to a Portfolio Investment and otherwise in proportion to their Commitments (provided that a Non-Defaulting Partner shall not receive a distribution with respect to a Portfolio Investment with respect to which such Limited Partner is an Excused Limited Partner). 6.6.4 Without prejudice to Section 6.6.3 above or Section 6.6.8 below, the General Partner in its sole discretion, on its own behalf or on behalf of the Fund, may (but shall not be obligated to) pursue and enforce any and all rights and remedies the Fund, the General Partner or the Fund Manager may have against such Defaulting Partner at law, in equity or pursuant to any other provision of this Agreement or otherwise with respect thereto, including taking any or all of the following actions in any order of priority (it being understood and agreed that the taking of one or more actions (including those set forth herein), or no action at all, by the General Partner with respect to a Defaulting Partner pursuant to this Section 6.6.4 shall in no way restrict or otherwise limit the General Partner’s ability to take one or more actions not prohibited by this Agreement, or no action at all, or in a different order of priority, with respect to any other Defaulting Partner pursuant to this Section 6.6.4): 6.6.4.1 determine that the Defaulting Partner shall not be entitled to receive any or a portion of the distributions from the Fund (which amounts shall be forfeited by such Defaulting Partner) that would otherwise be made to the Defaulting Partner pursuant to this Agreement and may apply such withheld distributions to offset any defaulted amount owing by the Defaulting Partner to the Fund or any other payment required Alternative Vehicle; 6.6.4.2 determine that the Defaulting Partner’s Interest may be sold for a purchase price equal to [50]% of the lesser of (i) such Defaulting Partner’s aggregate Capital Contributions, or (ii) the Value of such Defaulting Partner’s Interest at the time of such Default, in each case net of any amounts payable to the Fund pursuant to Section 6.6.3, provided that any such offer may, to a Person that is an Interested Person, only be made with the prior written consent of the Advisory Committee, and provided, further that such Defaulting Partner shall remain subject to Section 16.3 (Limited Partner Giveback) and upon such Transfer the Defaulting Partner shall otherwise cease to be made by it hereundera Limited Partner; 6.6.4.3 determine that the Defaulting Partner must forfeit up to 100% of its Interest in the Fund without payment or other consideration therefor, then in which case the Partnership Non-Defaulting Partners shall promptly provide written notice be entitled to acquire such forfeited portion of the Defaulting Partner, UST and SIGTARP ’s Interest in the Fund divided among such Non-Defaulting Partners pro rata according to their respective Remaining Commitments with any adjustment that the General Partner may determine to be equitable in order to reflect any excuse pursuant to Section 6.7 (Excused Limited Partners). The sole consideration to the Defaulting Partner for each portion of such failure. If such Partner fails Defaulting Partner’s Interest reallocated to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice then such a Non-Defaulting Partner shall be deemed a “the assumption by such Non-Defaulting Partner of the Defaulting Partner’s obligation to make both defaulted and future Capital Contributions pursuant to its Commitment that are commensurate with the portion of the Defaulting Partner’s Interest being reallocated to such Non-Defaulting Partner. The Defaulting Partner acknowledges that it shall not receive any payment for any Interest reallocated to Non-Defaulting Partners pursuant to this Section 6.6.4.3, including for any funded portion of its Commitment related thereto or such Defaulting Partner’s share of any profits not yet distributed, even though the purchased Interest may actually have significant positive value at the time of such reallocation or purchase; and 6.6.4.4 determine to reduce any portion of such Defaulting Partner’s Commitment (which has not been assumed by another Partner) to the amount in respect of the Capital Contributions (which have not been acquired) made by such Defaulting Partner (net of distributions pursuant to Article 14 (Distributions; Allocations)), and the aggregate Commitments of the Fund shall be commensurately reduced and any such determination shall be binding on such Defaulting Partner. 6.6.5 Notwithstanding anything to the contrary provided herein, so long as a Defaulting Partner has defaulted being is a “Defaulted Amount”) Partner in the Fund nothing contained in Section 6.6.4 shall affect the obligation of such Defaulting Partner to pay any such part of its Remaining Commitment to the Fund in accordance with the terms of this Agreement, and the Defaulting Partner shall remain fully liable for the fulfilment of its payment obligations hereunder, notwithstanding any other rights and remedies the Fund and the General Partner shall immediately notify UST and SIGTARP of such failuremay have pursuant to applicable law. 6.6.6 With respect to any amount (bother than the Management Fee) The Defaulted Amount may be deducted from any distribution of Temporary Investment Income, Investment Proceeds and liquidating distributions that such Defaulting Partner would otherwise receive. (c) In the event that any Partner defaults is in making a Capital Contribution to the PartnershipDefault, the General Partner may require all additional Drawdowns from the Non-Defaulting Partners in proportion to their Remaining Commitments; provided that no Limited Partner shall be obligated as a result thereof to contribute an additional amount in excess of the Non- Defaulting Partners (other than UST) to increase their lesser of such Limited Partner’s Remaining Commitment and [50]% of the total Capital Contributions by an aggregate amount equal that such Limited Partner was originally required to make before the Drawdown of such additional amounts. 6.6.7 A Defaulting Partner shall cease to have any voting or consent rights as a Limited Partner or with regard to its representative in the Advisory Committee (if applicable for such Defaulting Partner), and all acts, consents and decisions with respect to the Defaulted AmountFund to be made by the Limited Partners or the Advisory Committee shall be calculated and made by the other Limited Partners without regard for the Commitment or (if applicable) the Advisory Committee member of such Defaulting Partner. 6.6.8 The General Partner shall, in addition to the provisions of Section 6.6.4, have with respect to a Default by a Defaulting Partner the right to pursue all remedies at law (including claiming damages in addition to any forfeiture of Interest pursuant to Section 6.6.4) or in equity or by statute or otherwise. For No course of dealing between the General Partner and any Defaulting Partner and no delay in exercising any right, power or remedy conferred in this Section 6.6.8 now or hereafter existing at law shall operate as a waiver or otherwise prejudice any such right, power or remedy. In addition to the foregoing, the General Partner may institute a lawsuit against any Defaulting Partner for specific performance of its obligations to make Capital Contributions and to collect any overdue amounts hereunder, with interest on such overdue amounts at the rate specified in Section 6.6.3. 6.6.9 [Notwithstanding anything to the contrary provided herein, and for the avoidance of doubt, UST shall not be required to increase its Capital Contributions in respect of any Defaulted Amount. (d) Each if an Affiliated Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 7.3 (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 Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted by Section 17-306 of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each of the General Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Capital Contribution or any other payment required to be made by UST hereunder other than the remedies set forth in Section 7.3(b). (e) In the event any Partner (other than UST) becomes a Defaulting Partner, the General Partner shall have the right in its sole discretion all determinations as to take any one, a combination actions or all of the following actions: (i) cause such Defaulting Partner to forfeit to the other Partners as recompense for damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), the Partnership may withhold (for the account of such Partners), all or any portion of distributions of Investment Proceeds or Temporary Investment Income that such Partner would otherwise receive, except to the extent of Investment Proceeds or Temporary Investment Income constituting a return of Capital Contributions made by such Defaulting Partner less any expenses, deductions or losses allocated to such Defaulting Partner, (ii) assess a fifty percent (50%) reduction, or such other greater or lesser reduction as permitted by applicable law, to the Capital Account of such Defaulting Partner, (iii) reduce or cancel the available Capital Commitment of the Defaulting Partner on such terms as the General Partner determines in its discretion (which may include leaving such Defaulting Partner obligated to make Capital Contributions waivers with respect to Partnership Expenses); provided that such Affiliated Partner shall constitute a conflict for the Capital Commitment purposes of UST shall be reduced to the extent necessary to comply with Section 3.1(g9.5 (Other Conflicts of Interest) and (iv) institute proceedings against the Defaulting Partner to recover any unrecouped Defaulted Amount. Any amounts withheld from the Defaulting Partner by the Partnership pursuant to clause (i) above shall be allocated and distributed to the other Partners (other than UST) (A) in proportion to their respective Percentage Interests attributable to the Investment or Temporary Investment giving rise to such distribution, or (B) if such distribution is not attributable to an Investment or Temporary Investment, in proportion to their respective proportionate interests in the Partnership property or funds that produced such proceeds, as reasonably determined by the General Partner, or (C) in the case of a distribution upon dissolution, in proportion to the final distributions to them pursuant to Section 8.3. Any reductions in the Capital Accounts pursuant to clause (ii) above shall be allocated among the non-defaulting Partners (other than UST) that made Capital Contributions in respect of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts of the Partners shall be adjusted pursuant to Article IX to take account of changes to the Partners' Capital Accounts pursuant to this Section 7.3(e). (f) The General Partner shall have the right in its sole discretion to prohibit a Defaulting Partner from making any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary Investment, if any, with respect to which such Defaulting Partner initially defaulted) to the Partnership with respect to any Investment or Temporary Investment. Each such Defaulting Partner shall remain fully liable to the Partnership for its obligations hereunder, to the extent provided by law and subject to the limitations of this Agreement, as if such default had not occurred and shall be responsible for all expenses related to its default. (g) The General Partner shall have full power, in its sole discretion, without prejudice to any other rights or remedies the General Partner or the Partnership may have to require a Defaulting Partner (other than UST) to sell to the other Partners (other than Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital Commitments, such Defaulting Partner's Interest at a purchase price equal to the lesser of (x) the original cost of such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance of doubt, any sales and purchases of Interests pursuant to this Section 7.3(g) shall accordingly be subject to the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from USTof the Advisory Committee. (h) The remedies set forth in this Section 7.3 shall not be exclusive of any other remedy which the Partnership or the Partners may have at law or in equity or under this Agreement against a Defaulting Partner (other than UST).]

Appears in 2 contracts

Sources: Limited Partnership Agreement, Limited Partnership Agreement

Defaulting Partners. (ai) In the event any If a Delinquent Partner fails to make, when due, any portion of a Capital Contribution required pay the Unpaid Amount together with the Penalty Amount to be contributed by such Partner pursuant to this Agreement or any other payment required to be made by it hereunder, then the Partnership or the Timely Partners as provided in Section 2.4(b) on or before the expiration of the Grace Period, such failure shall promptly provide written notice to constitute a "Payment Default" and, if such Payment Default is not thereafter cured in full as provided in Section 2.4(c)(iii), the Delinquent Partner shall for all purposes hereof be considered a "Defaulting Partner" with the effect described herein. (ii) If a Payment Default occurs, UST and SIGTARP of such failure. If such Partner fails to make such Capital Contribution or other payment the Chief Executive Officer shall, within five (5) Business Days days after receipt the expiration of the related Grace Period, give a notice (a "Default Loan Notice") to each Partner that was a Paying Partner with respect to such notice then such Partner shall be deemed Additional Contribution Notice requesting the Paying Partners to make loans (each a “Defaulting Partner” (the amount in respect of which a Defaulting Partner has defaulted being a “Defaulted Amount”"Default Loan") and the General Partner shall immediately notify UST and SIGTARP of such failure. (b) The Defaulted Amount may be deducted from any distribution of Temporary Investment Income, Investment Proceeds and liquidating distributions that such Defaulting Partner would otherwise receive. (c) In the event that any Partner defaults in making a Capital Contribution to the Partnership, the General Partner may require all of the Non- Defaulting Partners (other than UST) to increase their Capital Contributions by Partnership in an aggregate amount equal to the Defaulted Unpaid Amount. For Each Paying Partner that is willing to commit to make a Default Loan (each a "Lending Partner") shall so notify the avoidance Chief Executive Officer and each other Paying Partner within ten (10) days after the date the Default Loan Notice was given, setting forth the maximum portion of doubtthe Unpaid Amount, UST up to one hundred percent (100%) thereof, that such Lending Partner is willing to lend to the Partnership (the "Lending Commitment"). The amount of the Default Loan that each Lending Partner shall not be required entitled to increase its Capital Contributions in respect of any Defaulted Amount. (d) Each Partner acknowledges by its execution hereof that it has been admitted make to the Partnership in reliance upon its agreements under this response to a Default Loan Notice shall be determined in the same manner as provided in Section 7.3 (as well as 2.4(a) for 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 Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted by Section 17-306 determination of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each amount of the General Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Additional Capital Contribution or any other payment required that each Contributing Partner is entitled to make in response to a Shortfall Notice. The amount of the Default Loan to be made by UST hereunder other than each Lending Partner in response to the remedies set forth Default Loan Notice as so determined shall be specified in a notice delivered by the Chief Executive Officer to the Lending Partners and within ten (10) days of the date of such notice shall be paid to the account of the Partnership designated in the Default Loan Notice. Each Default Loan shall bear interest from the date made (the "Loan Date") until paid in full or contributed to the Partnership as provided in this Section 7.3(b2.4 at the Floating Rate applicable following the Grace Period and shall be evidenced by a promissory note of the Partnership in the form of Exhibit 2.4(c)(ii) (with any changes thereto requested by any lender under any Senior Credit Agreement and consented to by the Lending Partner, which consent shall not be unreasonably withheld). (eiii) In A Delinquent Partner may cure its Payment Default at any time prior to the event any Partner close of business on the ninetieth (other than UST90th) becomes a Defaulting Partner, day following the General Partner shall have Loan Date (the right in its sole discretion "Cure Date") by transferring to take any one, a combination or all an account of the following actions: Partnership designated by the Chief Executive Officer cash in an amount equal to the sum of the Unpaid Amount and the Penalty Amount accrued thereon to the date of such transfer (i) cause such Defaulting the "Make-up Amount"). The portion of the Make-up Amount equal to the Penalty Amount shall be deemed to be a Special Contribution by the Delinquent Partner to forfeit the Partnership and the balance thereof shall constitute an Additional Capital Contribution by the Delinquent Partner to the other Partners as recompense for damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), Partnership. The Chief Executive Officer shall cause the Partnership may withhold (for to apply the account of such Partners), all or any portion of distributions of Investment Proceeds or Temporary Investment Income that such funds so received from the Delinquent Partner would otherwise receive, except to the extent of Investment Proceeds or Temporary Investment Income constituting a return of Capital Contributions made by such Defaulting Partner less any expenses, deductions or losses allocated to such Defaulting Partner, (ii) assess a fifty percent (50%) reduction, or such other greater or lesser reduction as permitted by applicable law, to the Capital Account of such Defaulting Partner, (iii) reduce or cancel the available Capital Commitment payment in full of the Defaulting Partner unpaid principal of and accrued interest on such each Default Loan in accordance with the terms as of the General Partner determines in its discretion (which may include leaving such Defaulting Partner obligated to make Capital Contributions with respect to Partnership Expenses); provided that note evidencing the Capital Commitment of UST shall be reduced to the extent necessary to comply with Section 3.1(g) and same. (iv) institute proceedings against If a Delinquent Partner has not timely cured its Payment Default in full in accordance with Section 2.4(c)(iii), then the Defaulting Partner to recover any unrecouped Defaulted Amount. Any amounts withheld from the Defaulting Partner by the Partnership pursuant to clause (i) above Lending Partners shall be allocated and distributed to the other Partners (other than UST) (A) in proportion to contribute their respective Percentage Interests attributable to the Investment or Temporary Investment giving rise to such distribution, or (B) if such distribution is not attributable to an Investment or Temporary Investment, in proportion to their respective proportionate interests in the Partnership property or funds that produced such proceeds, as reasonably determined by the General Partner, or (C) in the case of a distribution upon dissolution, in proportion to the final distributions to them pursuant to Section 8.3. Any reductions in the Capital Accounts pursuant to clause (ii) above shall be allocated among the non-defaulting Partners (other than UST) that made Capital Contributions in respect of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts of the Partners shall be adjusted pursuant to Article IX to take account of changes to the Partners' Capital Accounts pursuant to this Section 7.3(e). (f) The General Partner shall have the right in its sole discretion to prohibit a Defaulting Partner from making any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary Investment, if any, with respect to which such Defaulting Partner initially defaulted) Default Loans to the Partnership with respect to any Investment or Temporary Investment. Each such Defaulting Partner shall remain fully liable effective as of the day following the Cure Date and surrender the notes evidencing the same to the Partnership for its obligations hereunder, cancellation. The unpaid principal amount of a Lending Partner's Default Loan through the Cure Date shall constitute an Additional Capital Contribution (and the accrued interest on such Default Loan shall constitute a Special Contribution) by the Lending Partner to the extent provided by law and subject to Partnership as of the limitations of this Agreement, as if such default had not occurred and shall be responsible for all expenses related to its default. (g) The General Partner shall have full power, in its sole discretion, without prejudice to any other rights or remedies the General Partner or the Partnership may have to require a Defaulting Partner (other than UST) to sell to the other Partners (other than Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital Commitments, such Defaulting Partner's Interest at a purchase price equal to the lesser of (x) the original cost effective date of such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance of doubt, any sales and purchases of Interests pursuant to this Section 7.3(g) shall be subject to the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from USTcontribution. (h) The remedies set forth in this Section 7.3 shall not be exclusive of any other remedy which the Partnership or the Partners may have at law or in equity or under this Agreement against a Defaulting Partner (other than UST).

Appears in 2 contracts

Sources: Limited Partnership Agreement (Sprint Corp), Agreement of Limited Partnership (Comcast Corp)

Defaulting Partners. (a) In the event any If a Partner fails to make, pay any installment of its Capital Commitment when due, a notice of default shall be given to such Partner by the General Partner by facsimile transmission, hand delivery or by certified or registered mail. If the installment is not received by the Partnership within ten (10) business days after the receipt of such notice of default, such amount shall bear interest payable to the Partnership at a rate of 18% per annum or, if lower, the highest rate of interest permitted under applicable law, from and after the original due date of such installment (the “ Default Date ”) until the earliest of either (i) the payment of such installment, including any portion interest accruing under this Section 4.2(a), (ii) the purchase of such Defaulting Partner’s Defaulted Interest (as defined below) under Section 4.2(b), or (iii) the conclusion of foreclosure proceedings under Section 4.2(d). Any interest paid by a Capital Contribution required to be contributed by such Defaulting Partner pursuant to this Agreement or any other payment required to Section 4.2(a) shall not be made by it hereunder, then the Partnership shall promptly provide written notice to such Partner, UST and SIGTARP of such failure. If such Partner fails to make such treated as a Capital Contribution or other payment within five (5) Business Days after receipt of such notice then such Partner but shall be deemed a “Defaulting Partner” (treated as income of the amount in respect of which a Defaulting Partner has defaulted being a “Defaulted Amount”) and the General Partner shall immediately notify UST and SIGTARP of such failurePartnership. (b) The Defaulted Amount may be deducted from In addition to, and not in limitation of the foregoing, upon ten (10) days’ written notice to any distribution of Temporary Investment Income, Investment Proceeds Partner that becomes a Defaulting Partner (and liquidating distributions provided that such default has not been cured by the Defaulting Partner would otherwise receive. (c) In the event that any Partner defaults in making a Capital Contribution to the Partnershipwithin such 10-day period), the General Partner may require all of the Non- Defaulting Partners (other than UST) to increase their Capital Contributions by an aggregate amount equal to the Defaulted Amount. For the avoidance of doubt, UST shall not be required to increase its Capital Contributions in respect of any Defaulted Amount. (d) Each Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 7.3 (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 Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted by Section 17-306 of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each of the General Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Capital Contribution or any other payment required to be made by UST hereunder other than the remedies set forth in Section 7.3(b). (e) In the event any Partner (other than UST) becomes a Defaulting Partner, the General Partner shall have the right in its sole discretion to take any onediscretion, a combination or all of the following actions: may: (i) cause such Defaulting Partner offer to forfeit all non-defaulting Partners the right to acquire (subject to the other Partners as recompense for damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), the Partnership may withhold (for the account terms of such Partners), Articles 7 and 8 hereof) all or any portion of distributions the Equity Interest of Investment Proceeds or Temporary Investment Income that such Partner would otherwise receive, except to the extent of Investment Proceeds or Temporary Investment Income constituting a return of Capital Contributions made by such Defaulting Partner less any expenses, deductions or losses allocated to such Defaulting Partner, in the Partnership (a “ Defaulted Interest ”); (ii) assess in the event that the Defaulting Partner’s entire Defaulted Interest is not acquired by the Partners pursuant to clause (i) above, cause the Partnership to acquire all or a fifty percent (50%) reduction, or such other greater or lesser reduction as permitted by applicable law, to portion of the Capital Account portion of such Defaulting Partner’s Defaulted Interest in the Partnership not so acquired; provided, however, that the aggregate amount of the Defaulting Partner’s Defaulted Interest purchased by the Partners pursuant to clause (i) and by the Partnership pursuant to this clause (ii) must be equal to the entire Defaulted Interest of the Defaulting Partner, unless the remainder of such Defaulted Interest is acquired pursuant to clause (iii) reduce or cancel below; and/or (iii) in the available Capital Commitment event that the entire Defaulted Interest of the Defaulting Partner on such terms as is not acquired by the General Partner determines in its discretion Partners pursuant to clause (which may include leaving such Defaulting Partner obligated to make Capital Contributions with respect to Partnership Expenses); provided that the Capital Commitment of UST shall be reduced to the extent necessary to comply with Section 3.1(gi) and (iv) institute proceedings against the Defaulting Partner to recover any unrecouped Defaulted Amount. Any amounts withheld from the Defaulting Partner above and/or by the Partnership pursuant to clause (iii) above above, designate one or more third parties, which parties may be Partners, to acquire (subject to the terms of Articles 7 and 8 hereof) all, but not less than all, of the Defaulting Partner’s Defaulted Interest not so acquired by the Partners or the Partnership. A copy of any notice provided to a Defaulting Partner pursuant to this Section 4.2(b) shall be allocated and distributed transmitted promptly to all other Partners. In the event that a Defaulting Partner shall pay any overdue installment of its Capital Commitment, plus interest in accordance with paragraph (a), prior to the other Partners expiration of the above-referenced 10-day notice period, such Partner shall cease to be a Defaulting Partner and the remedies provided in this paragraph (other than USTb) and in paragraph (Ad) shall not be available with respect thereto. In the event that the Defaulting Partner is an AVB Affiliate, and at the time of such default the General Partner is an AVB Affiliate, the General Partner shall be required to pursue the remedy set forth in proportion this Section 4.2(b) against such Defaulting Partner. (c) With respect to their respective Percentage Interests attributable any acquisition made pursuant to subsection (b) above, the aggregate consideration payable to the Investment or Temporary Investment giving rise Defaulting Partner shall be a cash payment in an amount equal to seventy percent (70%) of such distributionDefaulting Partner’s Estimated Value Capital Account; and each acquiring party shall be obligated, or (B) if severally and not jointly, to pay its pro rata portion of such distribution is not attributable consideration based on the percentage of the Defaulting Partner’s Defaulted Interest acquired by such party. In the event that the General Partner exercises its right to an Investment or Temporary Investment, in proportion to their respective proportionate interests in cause the Partnership property to acquire all or funds that produced such proceeds, as reasonably determined by the General Partner, or (C) in the case a portion of a distribution upon dissolution, in proportion to the final distributions to them Defaulting Partner’s Defaulted Interest pursuant to Section 8.3. Any reductions subsection (b)(ii) above, for purposes of determining each Partner’s liability for any resulting Contribution Calls made in connection therewith, the Capital Accounts pursuant to clause (ii) above shall be allocated among the non-defaulting Partners (other than UST) that made Capital Contributions in respect of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts Equity Interest Percentages of the Partners shall be adjusted calculated assuming that the Partnership’s proposed purchase of all or a portion of the Defaulted Interest has been completed. Any non-defaulting Partner that acquires all or a portion of a Defaulting Partner’s Defaulted Interest shall also assume the portion of the Defaulting Partner’s Capital Commitment corresponding to the acquired portion of the Defaulted Interest and shall pay to the Partnership, concurrently with the payment of the purchase price to the Defaulting Partner, an amount representing the portion of the Defaulting Partner’s Contribution Call that is then due and unpaid that corresponds to the acquired portion of the Defaulted Interest. In the event that the Partnership acquires any portion of a Defaulting Partner’s Defaulted Interest, the portion of the Defaulting Partner’s Capital Commitment that corresponds to the portion of the Defaulted Interest acquired by the Partnership shall be cancelled. Any interest that accrues under Section 4.2(a) with respect to a Defaulting Partner’s Defaulted Interest prior to the acquisition of such Defaulted Interest pursuant to Article IX to take account Section 4.2(b), shall remain an obligation of changes to the Partners' Capital Accounts pursuant to this Section 7.3(e)Defaulting Partner and shall not be assumed by any Person acquiring the Defaulted Interest unless otherwise agreed in writing by such Person and the Defaulting Partner. (fd) The In addition to, or in lieu of, and not in limitation of any of the foregoing, upon termination of the 10-day period provided in paragraph (b) above, the General Partner shall have the right in its sole discretion to prohibit a Defaulting Partner from making any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary Investment, if any, with respect to which such Defaulting Partner initially defaulted) to the Partnership with respect to any Investment or Temporary Investment. Each such Defaulting Partner shall remain fully liable to the Partnership for its obligations hereunder, to the extent provided by law and subject to the limitations of this Agreement, as if such default had not occurred and shall be responsible for all expenses related to its default. (g) The General Partner shall have full powerPartner, in its sole discretion, without prejudice may commence proceedings to collect any other rights or remedies due and unpaid installment of the Defaulting Partner’s Capital Commitment (plus interest in accordance with paragraph (a) above) and the expenses of collection, including court costs and attorneys’ fees and disbursements. (e) Any actions taken by the General Partner or the Partnership pursuant to paragraphs (a) through (d), inclusive, of this Section 4.2 shall be in addition to and not in limitation of any other rights or remedies that the Partnership may have against the Defaulting Partner, including, but not limited to, the right to require hold the Defaulting Partner responsible for any damages or liabilities (including attorneys’ fees) to which the Partnership may be subjected (in whole or in part) as a result of the default by the Defaulting Partner. (f) Each Partner hereby agrees that, in the event that such Partner shall fail to pay when due any installment of its Capital Commitment required pursuant to Section 4.1 and the General Partner elects to pursue any remedy set forth in paragraph (b) above, such Partner shall sell, assign, transfer and convey to the Partnership, any designee of the General Partner, any and all Partners making the election contemplated by subparagraph (b) or any third party, its entire Equity Interest in the Partnership in consideration of the amount determined in accordance with the provisions of paragraph (c) of this Section 4.2. (g) So long as a Defaulting Partner (other than UST) to sell to the other Partners (other than remains a Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital CommitmentsPartner, such Defaulting Partner's Interest at a purchase price equal Partner shall not be entitled to the lesser of (x) the original cost of exercise any voting rights otherwise granted to such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance of doubt, any sales and purchases of Interests pursuant to this Section 7.3(g) shall be subject to the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from USTAgreement. (h) The In the event that the Company is a Defaulting Partner because of a default by a Stockholder (a “Defaulting Stockholder ”) in the payment of amounts that the Defaulting Stockholder is obligated to pay to the Company, then the Company’s Equity Interest shall be separated into two parts for purposes of exercising all default remedies set forth in under this Section 7.3 4.2. One part will consist of the Defaulted Interest and will represent an amount of the Company’s Equity Interest that corresponds to the interest of the Defaulting Stockholder in the Company (the “ Default Portion ”). The second part will consist of the balance of the Company’s Equity Interest (the “ Non-Default Portion ”). Only the Default Portion of the Company’s Equity Interest will be treated as a Defaulted Interest for purposes of this Agreement and the Company will continue to have the same rights as all other non-defaulting Partners to the extent of the Non-Default Portion of the Company’s Equity Interest. In the event that the Partnership or any non-defaulting Partner (other than the Company) elects to purchase part or all of the Default Portion, such purchase shall not be exclusive of any other remedy which occur by the Partnership or the Partners non-defaulting Partner, as the case may have at law be, acquiring part or all of the Default Portion and the Company using the proceeds received from such purchase to then acquire from the Defaulting Stockholder the corresponding portion of the Defaulting Stockholder’s interest in equity or under this Agreement against the Company. In the event that the Company is a Defaulting Partner as a result of a default by one of its Stockholders, the General Partner may make such modifications to this Section 4.2 and Article 5 as are necessary or appropriate so that a REIT Share is the economic equivalent (other than UST)with respect to tax attributes) of an Equity Interest of the same subscription amount.

Appears in 1 contract

Sources: Limited Partnership Agreement (Avalonbay Communities Inc)

Defaulting Partners. (a) In the event any If a Partner fails to make, pay any installment of its Capital Commitment when due, a notice of default shall be given to such Partner by the General Partner by facsimile transmission, hand delivery or by certified or registered mail. If the installment is not received by the Partnership within ten (10) business days after the receipt of such notice of default, such amount shall bear interest payable to the Partnership at a rate of 18% per annum or, if lower, the highest rate of interest permitted under applicable law, from and after the original due date of such installment (the “Default Date”) until the earliest of either (i) the payment of such installment, including any portion interest accruing under this Section 4.2(a), (ii) the purchase of such Defaulting Partner’s Defaulted Interest (as defined below) under Section 4.2(b), or (iii) the conclusion of foreclosure proceedings under Section 4.2(d). Any interest paid by a Capital Contribution required to be contributed by such Defaulting Partner pursuant to this Agreement or any other payment required to Section 4.2(a) shall not be made by it hereunder, then the Partnership shall promptly provide written notice to such Partner, UST and SIGTARP of such failure. If such Partner fails to make such treated as a Capital Contribution or other payment within five (5) Business Days after receipt of such notice then such Partner but shall be deemed a “Defaulting Partner” (treated as income of the amount in respect of which a Defaulting Partner has defaulted being a “Defaulted Amount”) and the General Partner shall immediately notify UST and SIGTARP of such failurePartnership. (b) The Defaulted Amount may be deducted from In addition to, and not in limitation of the foregoing, upon ten (10) days’ written notice to any distribution of Temporary Investment Income, Investment Proceeds Partner that becomes a Defaulting Partner (and liquidating distributions provided that such default has not been cured by the Defaulting Partner would otherwise receive. (c) In the event that any Partner defaults in making a Capital Contribution to the Partnershipwithin such 10-day period), the General Partner may require all of the Non- Defaulting Partners (other than UST) to increase their Capital Contributions by an aggregate amount equal to the Defaulted Amount. For the avoidance of doubt, UST shall not be required to increase its Capital Contributions in respect of any Defaulted Amount. (d) Each Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 7.3 (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 Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted by Section 17-306 of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each of the General Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Capital Contribution or any other payment required to be made by UST hereunder other than the remedies set forth in Section 7.3(b). (e) In the event any Partner (other than UST) becomes a Defaulting Partner, the General Partner shall have the right in its sole discretion to take any onediscretion, a combination or all of the following actions: may: (i) cause such Defaulting Partner offer to forfeit all non-defaulting Partners the right to acquire (subject to the other Partners as recompense for damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), the Partnership may withhold (for the account terms of such Partners), Articles 7 and 8 hereof) all or any portion of distributions the Equity Interest of Investment Proceeds or Temporary Investment Income that such Partner would otherwise receive, except to the extent of Investment Proceeds or Temporary Investment Income constituting a return of Capital Contributions made by such Defaulting Partner less any expenses, deductions or losses allocated to such Defaulting Partner, in the Partnership (a “Defaulted Interest”); (ii) assess in the event that the Defaulting Partner’s entire Defaulted Interest is not acquired by the Partners pursuant to clause (i) above, cause the Partnership to acquire all or a fifty percent (50%) reduction, or such other greater or lesser reduction as permitted by applicable law, to portion of the Capital Account portion of such Defaulting Partner’s Defaulted Interest in the Partnership not so acquired; provided, however, that the aggregate amount of the Defaulting Partner’s Defaulted Interest purchased by the Partners pursuant to clause (i) and by the Partnership pursuant to this clause (ii) must be equal to the entire Defaulted Interest of the Defaulting Partner, unless the remainder of such Defaulted Interest is acquired pursuant to clause (iii) reduce or cancel below; and/or (iii) in the available Capital Commitment event that the entire Defaulted Interest of the Defaulting Partner on such terms as is not acquired by the General Partner determines in its discretion Partners pursuant to clause (which may include leaving such Defaulting Partner obligated to make Capital Contributions with respect to Partnership Expenses); provided that the Capital Commitment of UST shall be reduced to the extent necessary to comply with Section 3.1(gi) and (iv) institute proceedings against the Defaulting Partner to recover any unrecouped Defaulted Amount. Any amounts withheld from the Defaulting Partner above and/or by the Partnership pursuant to clause (iii) above above, designate one or more third parties, which parties may be Partners, to acquire (subject to the terms of Articles 7 and 8 hereof) all, but not less than all, of the Defaulting Partner’s Defaulted Interest not so acquired by the Partners or the Partnership. A copy of any notice provided to a Defaulting Partner pursuant to this Section 4.2(b) shall be allocated and distributed transmitted promptly to all other Partners. In the event that a Defaulting Partner shall pay any overdue installment of its Capital Commitment, plus interest in accordance with paragraph (a), prior to the other Partners expiration of the above-referenced 10-day notice period, such Partner shall cease to be a Defaulting Partner and the remedies provided in this paragraph (other than USTb) and in paragraph (Ad) shall not be available with respect thereto. In the event that the Defaulting Partner is an AVB Affiliate, and at the time of such default the General Partner is an AVB Affiliate, the General Partner shall be required to pursue the remedy set forth in proportion this Section 4.2(b) against such Defaulting Partner. (c) With respect to their respective Percentage Interests attributable any acquisition made pursuant to subsection (b) above, the aggregate consideration payable to the Investment or Temporary Investment giving rise Defaulting Partner shall be a cash payment in an amount equal to seventy percent (70%) of such distributionDefaulting Partner’s Estimated Value Capital Account; and each acquiring party shall be obligated, or (B) if severally and not jointly, to pay its pro rata portion of such distribution is not attributable consideration based on the percentage of the Defaulting Partner’s Defaulted Interest acquired by such party. In the event that the General Partner exercises its right to an Investment or Temporary Investment, in proportion to their respective proportionate interests in cause the Partnership property to acquire all or funds that produced such proceeds, as reasonably determined by the General Partner, or (C) in the case a portion of a distribution upon dissolution, in proportion to the final distributions to them Defaulting Partner’s Defaulted Interest pursuant to Section 8.3. Any reductions subsection (b)(ii) above, for purposes of determining each Partner’s liability for any resulting Contribution Calls made in connection therewith, the Capital Accounts pursuant to clause (ii) above shall be allocated among the non-defaulting Partners (other than UST) that made Capital Contributions in respect of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts Equity Interest Percentages of the Partners shall be adjusted calculated assuming that the Partnership’s proposed purchase of all or a portion of the Defaulted Interest has been completed. Any non-defaulting Partner that acquires all or a portion of a Defaulting Partner’s Defaulted Interest shall also assume the portion of the Defaulting Partner’s Capital Commitment corresponding to the acquired portion of the Defaulted Interest and shall pay to the Partnership, concurrently with the payment of the purchase price to the Defaulting Partner, an amount representing the portion of the Defaulting Partner’s Contribution Call that is then due and unpaid that corresponds to the acquired portion of the Defaulted Interest. In the event that the Partnership acquires any portion of a Defaulting Partner’s Defaulted Interest, the portion of the Defaulting Partner’s Capital Commitment that corresponds to the portion of the Defaulted Interest acquired by the Partnership shall be cancelled. Any interest that accrues under Section 4.2(a) with respect to a Defaulting Partner’s Defaulted Interest prior to the acquisition of such Defaulted Interest pursuant to Article IX to take account Section 4.2(b), shall remain an obligation of changes to the Partners' Capital Accounts pursuant to this Section 7.3(e)Defaulting Partner and shall not be assumed by any Person acquiring the Defaulted Interest unless otherwise agreed in writing by such Person and the Defaulting Partner. (fd) The In addition to, or in lieu of, and not in limitation of any of the foregoing, upon termination of the 10-day period provided in paragraph (b) above, the General Partner shall have the right in its sole discretion to prohibit a Defaulting Partner from making any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary Investment, if any, with respect to which such Defaulting Partner initially defaulted) to the Partnership with respect to any Investment or Temporary Investment. Each such Defaulting Partner shall remain fully liable to the Partnership for its obligations hereunder, to the extent provided by law and subject to the limitations of this Agreement, as if such default had not occurred and shall be responsible for all expenses related to its default. (g) The General Partner shall have full powerPartner, in its sole discretion, without prejudice may commence proceedings to collect any other rights or remedies due and unpaid installment of the Defaulting Partner’s Capital Commitment (plus interest in accordance with paragraph (a) above) and the expenses of collection, including court costs and attorneys’ fees and disbursements. (e) Any actions taken by the General Partner or the Partnership pursuant to paragraphs (a) through (d), inclusive, of this Section 4.2 shall be in addition to and not in limitation of any other rights or remedies that the Partnership may have against the Defaulting Partner, including, but not limited to, the right to require hold the Defaulting Partner responsible for any damages or liabilities (including attorneys’ fees) to which the Partnership may be subjected (in whole or in part) as a result of the default by the Defaulting Partner. (f) Each Partner hereby agrees that, in the event that such Partner shall fail to pay when due any installment of its Capital Commitment required pursuant to Section 4.1 and the General Partner elects to pursue any remedy set forth in paragraph (b) above, such Partner shall sell, assign, transfer and convey to the Partnership, any designee of the General Partner, any and all Partners making the election contemplated by subparagraph (b) or any third party, its entire Equity Interest in the Partnership in consideration of the amount determined in accordance with the provisions of paragraph (c) of this Section 4.2. (g) So long as a Defaulting Partner (other than UST) to sell to the other Partners (other than remains a Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital CommitmentsPartner, such Defaulting Partner's Interest at a purchase price equal Partner shall not be entitled to the lesser of (x) the original cost of exercise any voting rights otherwise granted to such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance of doubt, any sales and purchases of Interests pursuant to this Section 7.3(g) shall be subject to the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from USTAgreement. (h) The In the event that the Company is a Defaulting Partner because of a default by a Stockholder (a “Defaulting Stockholder”) in the payment of amounts that the Defaulting Stockholder is obligated to pay to the Company, then the Company’s Equity Interest shall be separated into two parts for purposes of exercising all default remedies set forth in under this Section 7.3 4.2. One part will consist of the Defaulted Interest and will represent an amount of the Company’s Equity Interest that corresponds to the interest of the Defaulting Stockholder in the Company (the “Default Portion”). The second part will consist of the balance of the Company’s Equity Interest (the “Non-Default Portion”). Only the Default Portion of the Company’s Equity Interest will be treated as a Defaulted Interest for purposes of this Agreement and the Company will continue to have the same rights as all other non-defaulting Partners to the extent of the Non-Default Portion of the Company’s Equity Interest. In the event that the Partnership or any non-defaulting Partner (other than the Company) elects to purchase part or all of the Default Portion, such purchase shall not be exclusive of any other remedy which occur by the Partnership or the Partners non-defaulting Partner, as the case may have at law be, acquiring part or all of the Default Portion and the Company using the proceeds received from such purchase to then acquire from the Defaulting Stockholder the corresponding portion of the Defaulting Stockholder’s interest in equity or under this Agreement against the Company. In the event that the Company is a Defaulting Partner as a result of a default by one of its Stockholders, the General Partner may make such modifications to this Section 4.2 and Article 5 as are necessary or appropriate so that a REIT Share is the economic equivalent (other than UST)with respect to tax attributes) of an Equity Interest of the same subscription amount.

Appears in 1 contract

Sources: Limited Partnership Agreement (Avalonbay Communities Inc)

Defaulting Partners. (a) In the event any If a Partner fails to make, when due, pay any portion of a Capital Contribution amount which it is required to be contributed by such Partner pursuant pay to this Agreement or any other payment required to be made by it hereunder, then the Partnership shall promptly provide written notice to on or before the date when such Partneramount is due and payable, UST and SIGTARP of such failure. If such Partner fails to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice then such Partner shall be deemed to be in default hereunder (a "Defaulting Partner” (the amount in respect "), and written notice of which a Defaulting default shall be given to such ------------------ Limited Partner has defaulted being a “Defaulted Amount”) and by the General Partner by certified or registered mail. The Partnership shall immediately notify UST be entitled to enforce the obligations of each Partner to make the contributions to capital required in this Agreement and SIGTARP shall have all remedies available at law or in equity in the event any such contribution is not so made. In the event of any legal proceedings relating to a default by a Defaulting Partner, such failureDefaulting Partner shall pay all costs and expenses incurred by the Partnership, including attorneys' fees, if the Partnership shall prevail. Further, such Defaulting Partner shall be obligated to pay the Partnership interest with respect to the amount of any Capital Contribution not made when required by this Article, with such interest commencing on the Drawdown Date for such contribution and ending on the date such contribution is made to the Partnership. Such interest shall be calculated on the basis of the then current reference rate announced by Xxxxx Fargo Bank, N.A., or by any other U.S. commercial bank with capital in excess of Five Hundred Million Dollars ($500,000,000) selected by the General Partner, plus five percent (5%) per annum, but not in excess of the amount allowable by law. (b) The Defaulted Amount may be deducted from any distribution of Temporary Investment IncomeIn addition to the remedies provided under Paragraph 3.5(a), Investment Proceeds and liquidating distributions that such if the Defaulting Partner would otherwise receive. does not cure a default in the payment of a required contribution within ten (c10) In business days of the event that any Partner defaults receipt of the notice specified in making a Capital Contribution to the PartnershipParagraph 3.5(a), the General Partner may require all of the Non- Defaulting Partners (other than UST) to increase their Capital Contributions by an aggregate amount equal to the Defaulted Amount. For the avoidance of doubt, UST shall not be required to increase its Capital Contributions in respect of any Defaulted Amount. (d) Each Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 7.3 (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 Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted by Section 17-306 of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each of the General Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Capital Contribution or any other payment required to be made by UST hereunder other than the remedies set forth in Section 7.3(b). (e) In the event any Partner (other than UST) becomes a Defaulting Partner, the General Partner shall have the right in its sole discretion to take any onediscretion) may, a combination or all of the following actions: (i) cause such Defaulting Partner to forfeit as liquidated and agreed current damages to the other non-defaulting Partners as recompense for such default (it being agreed that it would be difficult to fix the actual damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), the Partnership may withhold (for the account of such Partners), all or any portion cause and treat the Defaulting Partner's Capital Account to be reduced by an amount equal to fifty percent (50%), which amount shall thereupon become unrestricted assets of distributions the Partnership and shall be allocated pro rata to and among the respective Capital Accounts of Investment Proceeds or Temporary Investment Income that the non-defaulting Partners in such proportion as the Capital Account of each such non-defaulting Partner would otherwise receive, except then bears to the extent sum of Investment Proceeds or Temporary Investment Income constituting a return the Capital Accounts of Capital Contributions made by such Defaulting Partner less any expenses, deductions or losses allocated to such all non-defaulting Partners. The Defaulting Partner, (ii) assess a 's remaining fifty percent (50%) reduction, or such other greater or lesser reduction as permitted by applicable law, to the interest in its Capital Account of such Defaulting Partner, (iii) reduce or cancel the available Capital Commitment shall automatically be converted into a general unsecured obligation of the Defaulting Partner on such terms as Partnership, which obligation shall not bear any interest and shall be due six (6) months after the Termination Date of the Partnership. Upon the expiration of the ten (10) day period after the mailing of the notice of default and the election by the General Partner determines to exercise its remedy under this subparagraph (b), a Defaulting Partner shall automatically cease to be a Partner under this Agreement and shall have no further interest, right or claim in its discretion or against the Partnership, including any right or obligation to make subsequent Capital Contributions when called. (c) Notwithstanding the foregoing, if, at any time before a Capital Contribution required by Paragraph 3.2 becomes due, a Partner obtains and delivers to the Partnership an opinion of counsel (which may include leaving opinion shall be reasonably acceptable to the General Partner) to the effect that the payment by such Defaulting Partner obligated to make of any portion of any remaining Capital Contributions with respect to Partnership Expenses); provided required by this Agreement will be unlawful or that the Capital Commitment of UST shall there is a material likelihood that such payment will be reduced to the extent necessary to comply with Section 3.1(g) and (iv) institute proceedings against the Defaulting Partner to recover any unrecouped Defaulted Amount. Any amounts withheld from the Defaulting Partner by the Partnership pursuant to clause (i) above shall be allocated and distributed to the other Partners (other than UST) unlawful, then (A) in proportion to their respective Percentage Interests attributable to the Investment or Temporary Investment giving rise to such distribution, or (B) if such distribution is not attributable to an Investment or Temporary Investment, in proportion to their respective proportionate interests in the Partnership property or funds that produced such proceeds, as reasonably determined by the General Partner, or (C) in the case of a distribution upon dissolution, in proportion to the final distributions to them pursuant to Section 8.3. Any reductions in the Capital Accounts pursuant to clause (ii) above shall be allocated among the non-defaulting Partners (other than UST) that made Capital Contributions in respect of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts of the Partners shall be adjusted pursuant to Article IX to take account of changes to the Partners' Capital Accounts pursuant to this Section 7.3(e). (f) The General Partner shall have the no further right in its sole discretion to prohibit a Defaulting Partner from making any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary Investment, if any, with respect to which such Defaulting Partner initially defaulted) to the Partnership with respect to any Investment or Temporary Investment. Each such Defaulting Partner shall remain fully liable to the Partnership for its obligations hereunder, to the extent provided by law and subject to the limitations of this Agreement, as if such default had not occurred and shall be responsible for all expenses related to its default. (g) The General Partner shall have full power, in its sole discretion, without prejudice to any other rights or remedies the General Partner or the Partnership may have to require a Defaulting Partner (other than UST) to sell to the other Partners (other than Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital Commitments, such Defaulting Partner's Interest at a purchase price equal to the lesser of (x) the original cost of such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance of doubt, any sales and purchases of Interests pursuant to this Section 7.3(g) shall be subject to the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from UST. (h) The remedies set forth in this Section 7.3 shall not be exclusive of any other remedy which the Partnership or the Partners may have at law or in equity or under this Agreement against a Defaulting Partner (other than UST).xxxxxx-

Appears in 1 contract

Sources: Limited Partnership Agreement (E Trade Group Inc)

Defaulting Partners. 3.5.1 Notwithstanding any provision of this Agreement to the contrary, if any Limited Partner fails to contribute to the Partnership the amount which is the subject of a Drawdown Notice on or before the date of expiry of such Drawdown Notice then the General Partner may, at any time thereafter while such default is outstanding, give notice (a “Default Notice”) to such Limited Partner requiring it to remedy such default within ten (10) Business Days by payment of the amount due, and also to pay interest to the Partnership on any amount outstanding for the period from the date such balance was due up to the date of payment thereof (or, if earlier, the date of forfeiture of such Limited Partner’s Partnership Interest as provided below) at a rate equal to the lesser of: (a) In 12% per annum (compounded daily); or (b) the event any Partner fails highest rate permitted by law. Any such interest amount owed to make, when due, any portion of a Capital Contribution required to be contributed by such Partner pursuant to this Agreement or any other payment required to be made by it hereunder, then the Partnership shall promptly provide written notice be allocated to the other non-defaulting Partners in proportion to their respective Capital Contributions in connection with such Partner, UST and SIGTARP of such failureapplicable Drawdown Notice. If the Limited Partner has not remedied such Partner fails to make default (including any such Capital Contribution or other payment within five interest thereto) upon the expiry of ten (510) Business Days after receipt from the date of such notice then such Partner shall be deemed a “Defaulting Partner” (the amount in respect of which a Defaulting Partner has defaulted being a “Defaulted Amount”) and the General Partner shall immediately notify UST and SIGTARP of such failure. (b) The Defaulted Amount may be deducted from any distribution of Temporary Investment Income, Investment Proceeds and liquidating distributions that such Defaulting Partner would otherwise receive. (c) In the event that any Partner defaults in making a Capital Contribution to the PartnershipDefault Notice, the General Partner may require designate such Limited Partner as a “Defaulting Partner”, provided that the General Partner may remove such designation at any time thereafter in its sole discretion. If, at any time, a Limited Partner notifies the General Partner that it is or will be unable to contribute to the Partnership the amount that is the subject of a Drawdown Notice on or before the date of expiry of such Drawdown Notice, the General Partner may designate such Limited Partner as a Defaulting Partner, provided that the General Partner may remove such designation at any time thereafter in its sole discretion. In the event of a failure by a Feeder Fund to contribute a portion of the amount that is the subject of a Drawdown Notice, the provisions of this clause 3.5.1 shall apply to the proportionate share of such Feeder Fund’s Partnership Interest. The General Partner shall have the full authority to interpret in good faith the remaining provisions of this clause 3.5 to give effect to the intent of the preceding sentence. 3.5.2 The General Partner shall have the right (but not the obligation), without prejudice to any other rights it or the Partnership may have, upon the designation of any Defaulting Partner, to do one or more of the following in respect of such Defaulting Partner: (a) cause any or all of the Non- Defaulting Partners (other than UST) to increase their Capital Contributions by an aggregate amount equal Contributions, any income and capital standing to the Defaulted Amount. For credit of the avoidance income and capital accounts, and any or all Drawn Commitment of doubtsuch Defaulting Partner to be forfeited; (b) issue a Drawdown Notice to the Defaulting Partner for its entire Undrawn Commitment; (c) offer the whole or part of the Defaulting Partner’s Partnership Interest to such person(s) as the General Partner may, UST in its sole discretion, determine for such price as may be determined by the General Partner in its sole discretion (who in setting such price shall not be required act with regard to increase its Capital Contributions in respect the interests of any Defaulted Amount.the Partnership and the non-Defaulting Partners); or (d) take any lawful action as the General Partner may think necessary to enforce the obligations of the Defaulting Partner to make payment of any sums required pursuant to its Capital Commitment, 3.5.3 For so long as any Limited Partner is or remains a Defaulting Partner, such Limited Partner shall not be entitled to vote on, nor shall their written consent be required for, any matters requiring the consent of Limited Partners under this Agreement, nor shall a Defaulting Partner be entitled to attend or vote at any meetings of the Partnership. The Capital Commitments of a Defaulting Partner shall be disregarded when determining whether matters requiring Ordinary Consent or Special Consent have been validly approved. 3.5.4 Each Limited Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements obligations under this Section 7.3 (as well as the other provisions of this Agreement), that the General Partner Partner, the Partnership and the Partnership other Partners 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 at the time of such breach. It is specifically agreed breach and that any amount due the remedies conferred in this clause 3.5 are reasonable and appropriate remedies to be paid, forfeited or otherwise deducted from any amount otherwise due to be paid to any Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted applied by Section 17-306 of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each of the General Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Capital Contribution or any other payment required to be made by UST hereunder other than the remedies set forth in Section 7.3(b). (e) In the event any Partner (other than UST) becomes a Defaulting Partner, the General Partner shall have the right in its sole discretion to take any one, a combination or all of the following actions: (i) cause such Defaulting Partner to forfeit to the other Partners as recompense for damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), the Partnership may withhold (for the account of such Partners), all or any portion of distributions of Investment Proceeds or Temporary Investment Income that such Partner would otherwise receive, except to the extent of Investment Proceeds or Temporary Investment Income constituting a return of Capital Contributions made by such Defaulting Partner less any expenses, deductions or losses allocated to such Defaulting Partner, (ii) assess a fifty percent (50%) reduction, or such other greater or lesser reduction as permitted by applicable law, to the Capital Account of such Defaulting Partner, (iii) reduce or cancel the available Capital Commitment of the Defaulting Partner on such terms as the General Partner determines in its discretion (which may include leaving such Defaulting Partner obligated to make Capital Contributions with respect to Partnership Expenses); provided that the Capital Commitment of UST shall be reduced to the extent necessary to comply with Section 3.1(g) and (iv) institute proceedings against the Defaulting Partner to recover any unrecouped Defaulted Amount. Any amounts withheld from the Defaulting Partner by the Partnership pursuant to clause (i) above shall be allocated and distributed to the other Partners (other than UST) (A) in proportion to their respective Percentage Interests attributable to the Investment or Temporary Investment giving rise to such distribution, or (B) if such distribution is not attributable to an Investment or Temporary Investment, in proportion to their respective proportionate interests in the Partnership property or funds that produced such proceeds, as reasonably determined by the General Partner, or (C) in the case of a distribution upon dissolution, in proportion to the final distributions to them pursuant to Section 8.3. Any reductions in the Capital Accounts pursuant to clause (ii) above shall be allocated among the non-defaulting Partners (other than UST) that made Capital Contributions in respect of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts of the Partners shall be adjusted pursuant to Article IX to take account of changes to the Partners' Capital Accounts pursuant to this Section 7.3(e). (f) The General Partner shall have the right in its sole discretion to prohibit a Defaulting Partner from making any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary Investment, if any, with respect to which such Defaulting Partner initially defaulted) to the Partnership with respect to any Investment or Temporary Investment. Each such Defaulting Partner shall remain fully liable to the Partnership for its obligations hereunder, to the extent provided by law and subject to the limitations of this Agreement, as if such default had not occurred and shall be responsible for all expenses related to its default. (g) The General Partner shall have full power, in its sole discretion, without prejudice to any other rights or remedies the General Partner or the Partnership may have to require a Defaulting Partner (other than UST) to sell to the other Partners (other than Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital Commitments, such Defaulting Partner's Interest at a purchase price equal to the lesser of (x) the original cost of such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance of doubt, any sales and purchases of Interests pursuant to this Section 7.3(g) shall be subject to the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from UST. (h) The remedies set forth in this Section 7.3 shall not be exclusive of any other remedy which the Partnership or the Partners may have at law or in equity or under this Agreement against a Defaulting Partner (other than UST).

Appears in 1 contract

Sources: Exempted Limited Partnership Agreement (Startek, Inc.)

Defaulting Partners. (a) In the event any If a Partner fails to make, when due, pay any portion of a Capital Contribution amount which it is required to be contributed by such Partner pursuant pay to this Agreement or any other payment required to be made by it hereunder, then the Partnership shall promptly provide written notice to on or before the date when such Partneramount is due and payable, UST and SIGTARP of such failure. If such Partner fails to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice then such Partner shall be deemed to be in default hereunder (a "Defaulting ---------- Partner” (the amount in respect "), and written notice of which a Defaulting default shall be given to such Limited Partner has defaulted being a “Defaulted Amount”) and ------- by the General Partner by certified or registered mail. The Partnership shall immediately notify UST be entitled to enforce the obligations of each Partner to make the contributions to capital required in this Agreement and SIGTARP shall have all remedies available at law or in equity in the event any such contribution is not so made. In the event of any legal proceedings relating to a default by a Defaulting Partner, such failureDefaulting Partner shall pay all costs and expenses incurred by the Partnership, including attorneys' fees, if the Partnership shall prevail. Further, such Defaulting Partner shall be obligated to pay the Partnership interest with respect to the amount of any Capital Contribution not made when required by this Article, with such interest commencing on the Drawdown Date for such contribution and ending on the date such contribution is made to the Partnership. Such interest shall be calculated on the basis of the then current reference rate announced by Xxxxx Fargo Bank, N.A., or by any other U.S. commercial bank with capital in excess of five hundred million dollars ($500,000,000) selected by the General Partner, plus five percent (5%) per annum, but not in excess of the amount allowable by law. (b) The Defaulted Amount may be deducted from any distribution of Temporary Investment IncomeIn addition to the remedies provided under Paragraph 3.5(a), Investment Proceeds and liquidating distributions that such if the Defaulting Partner would otherwise receive. does not cure a default in the payment of a required contribution within ten (c10) In business days of the event that any Partner defaults receipt of the notice specified in making a Capital Contribution to the PartnershipParagraph 3.5(a), the General Partner may require all of the Non- Defaulting Partners (other than UST) to increase their Capital Contributions by an aggregate amount equal to the Defaulted Amount. For the avoidance of doubt, UST shall not be required to increase its Capital Contributions in respect of any Defaulted Amount. (d) Each Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 7.3 (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 Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted by Section 17-306 of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each of the General Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Capital Contribution or any other payment required to be made by UST hereunder other than the remedies set forth in Section 7.3(b). (e) In the event any Partner (other than UST) becomes a Defaulting Partner, the General Partner shall have the right in its sole discretion to take any onediscretion) may, a combination or all of the following actions: (i) cause such Defaulting Partner to forfeit as liquidated and agreed current damages to the other non-defaulting Partners as recompense for such default (it being agreed that it would be difficult to fix the actual damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), the Partnership may withhold (for the account of such Partners), all or any portion of distributions of Investment Proceeds or Temporary Investment Income that such Partner would otherwise receive, except to cause and treat the extent of Investment Proceeds or Temporary Investment Income constituting a return of Capital Contributions made by such Defaulting Partner less any expenses, deductions or losses allocated to such Defaulting Partner, (ii) assess a 's Capital Account to be reduced by an amount equal to fifty percent (50%) reduction), or such other greater or lesser reduction as permitted by applicable law, to the Capital Account of such Defaulting Partner, (iii) reduce or cancel the available Capital Commitment which amount shall thereupon become unrestricted assets of the Defaulting Partner on such terms as the General Partner determines in its discretion (which may include leaving such Defaulting Partner obligated to make Capital Contributions with respect to Partnership Expenses); provided that the Capital Commitment of UST shall be reduced to the extent necessary to comply with Section 3.1(g) and (iv) institute proceedings against the Defaulting Partner to recover any unrecouped Defaulted Amount. Any amounts withheld from the Defaulting Partner by the Partnership pursuant to clause (i) above shall be allocated pro rata to and distributed to among the other Partners (other than UST) (A) in proportion to their respective Percentage Interests attributable to the Investment or Temporary Investment giving rise to such distribution, or (B) if such distribution is not attributable to an Investment or Temporary Investment, in proportion to their respective proportionate interests in the Partnership property or funds that produced such proceeds, as reasonably determined by the General Partner, or (C) in the case of a distribution upon dissolution, in proportion to the final distributions to them pursuant to Section 8.3. Any reductions in the Capital Accounts pursuant to clause (ii) above shall be allocated among of the non-defaulting Partners (other than UST) that made Capital Contributions in respect of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts of the Partners shall be adjusted pursuant to Article IX to take account of changes to the Partners' Capital Accounts pursuant to this Section 7.3(e). (f) The General Partner shall have the right in its sole discretion to prohibit a Defaulting Partner from making any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary Investment, if any, with respect to which such Defaulting Partner initially defaulted) to the Partnership with respect to any Investment or Temporary Investment. Each such Defaulting Partner shall remain fully liable to the Partnership for its obligations hereunder, to the extent provided by law and subject to the limitations of this Agreement, as if such default had not occurred and shall be responsible for all expenses related to its default. (g) The General Partner shall have full power, in its sole discretion, without prejudice to any other rights or remedies the General Partner or the Partnership may have to require a Defaulting Partner (other than UST) to sell to the other Partners (other than Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital Commitments, such Defaulting Partner's Interest at a purchase price equal to the lesser of (x) the original cost of such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance Capital Account of doubt, any sales and purchases of Interests pursuant to this Section 7.3(g) shall be subject to the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from UST. (h) The remedies set forth in this Section 7.3 shall not be exclusive of any other remedy which the Partnership or the Partners may have at law or in equity or under this Agreement against a Defaulting Partner (other than UST).each such non-

Appears in 1 contract

Sources: Limited Partnership Agreement (E Trade Group Inc)

Defaulting Partners. (ai) In the event any If a Delinquent Partner fails to make, when due, any portion of a Capital Contribution required pay the Unpaid Amount together with the Penalty Amount to be contributed by such Partner pursuant to this Agreement or any other payment required to be made by it hereunder, then the Partnership or the Timely Partners as provided in Section 2.4(b) on or before the expiration of the Grace Period, such failure shall promptly provide written notice to constitute a "Payment Default" and, if such Payment Default is not thereafter cured in full as provided in Section 2.4(c)(iii), the Delinquent Partner shall for all purposes hereof be considered a "Defaulting Partner" with the effect described herein. (ii) If a Payment Default occurs, UST and SIGTARP of such failure. If such Partner fails to make such Capital Contribution or other payment the Chief Executive Officer shall, within five (5) Business Days days after receipt the expiration of the related Grace Period, give a notice (a "Default Loan Notice") to each Partner that was a Paying Partner with respect to such notice then such Partner shall be deemed Additional Contribution Notice requesting the Paying Partners to make loans (each a “Defaulting Partner” (the amount in respect of which a Defaulting Partner has defaulted being a “Defaulted Amount”"Default Loan") and the General Partner shall immediately notify UST and SIGTARP of such failure. (b) The Defaulted Amount may be deducted from any distribution of Temporary Investment Income, Investment Proceeds and liquidating distributions that such Defaulting Partner would otherwise receive. (c) In the event that any Partner defaults in making a Capital Contribution to the Partnership, the General Partner may require all of the Non- Defaulting Partners (other than UST) to increase their Capital Contributions by Partnership in an aggregate amount equal to the Defaulted Unpaid Amount. For Each Paying Partner that is willing to commit to make a Default Loan (each a "Lending Partner") shall so notify the avoidance Chief Executive Officer and each other Paying Partner within ten (10) days after the date the Default Loan Notice was given, setting forth the maximum portion of doubtthe Unpaid Amount, UST up to one hundred percent (100%) thereof, that such Lending Partner is willing to lend to the Partnership (the "Lending Commitment"). The amount of the Default Loan that each Lending Partner shall not be required entitled to increase its Capital Contributions in respect of any Defaulted Amount. (d) Each Partner acknowledges by its execution hereof that it has been admitted make to the Partnership in reliance upon its agreements under this response to a Default Loan Notice shall be determined in the same manner as provided in Section 7.3 (as well as 2.4(a) for 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 Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted by Section 17-306 determination of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each amount of the General Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Additional Capital Contribution or any other payment required that each Contributing Partner is entitled to make in response to a Shortfall Notice. The amount of the Default Loan to be made by UST hereunder other than each Lending Partner in response to the remedies set forth Default Loan Notice as so determined shall be specified in a notice delivered by the Chief Executive Officer to the Lending Partners and within ten (10) days of the date of such notice shall be paid to the account of the Partnership designated in the Default Loan Notice. Each Default Loan shall bear interest from the date made (the "Loan Date") until paid in full or contributed to the Partnership as provided in this Section 7.3(b2.4 at the Floating Rate applicable following the Grace Period and shall be evidenced by a promissory note of the Partnership in the form of Exhibit 2.4(c)(ii) (with any changes thereto requested by any lender under any Senior Credit Agreement and consented to by the Lending Partner, which consent shall not be unreasonably withheld). (eiii) In A Delinquent Partner may cure its Payment Default at any time prior to the event any Partner close of business on the ninetieth (other than UST90th) becomes a Defaulting Partner, day following the General Partner shall have Loan Date (the right in its sole discretion "Cure Date") by transferring to take any one, a combination or all an account of the following actions: Partnership designated by the Chief Executive Officer cash in an amount equal to the sum of the Unpaid Amount and the Penalty Amount accrued thereon to the date of such transfer (i) cause such Defaulting the "Make-up Amount"). The portion of the Make-up Amount equal to the Penalty Amount shall be deemed to be a Special Contribution by the Delinquent Partner to forfeit the Partnership and the balance thereof shall constitute an Additional Capital Contribution by the Delinquent Partner to the other Partners as recompense for damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), Partnership. The Chief Executive Officer shall cause the Partnership may withhold (for to apply the account of such Partners), all or any portion of distributions of Investment Proceeds or Temporary Investment Income that such funds so received from the Delinquent Partner would otherwise receive, except to the extent of Investment Proceeds or Temporary Investment Income constituting a return of Capital Contributions made by such Defaulting Partner less any expenses, deductions or losses allocated to such Defaulting Partner, (ii) assess a fifty percent (50%) reduction, or such other greater or lesser reduction as permitted by applicable law, to the Capital Account of such Defaulting Partner, (iii) reduce or cancel the available Capital Commitment payment in full of the Defaulting Partner unpaid principal of and accrued interest on such each Default Loan in accordance with the terms as of the General Partner determines in its discretion (which may include leaving such Defaulting Partner obligated to make Capital Contributions with respect to Partnership Expenses); provided that note evidencing the Capital Commitment of UST shall be reduced to the extent necessary to comply with Section 3.1(g) and same. (iv) institute proceedings against If a Delinquent Partner has not timely cured its Payment Default in full in accordance with Section 2.4(c)(iii), then the Defaulting Partner to recover any unrecouped Defaulted Amount. Any amounts withheld from the Defaulting Partner by the Partnership pursuant to clause (i) above Lending Partners shall be allocated and distributed to the other Partners (other than UST) (A) in proportion to contribute their respective Percentage Interests attributable to the Investment or Temporary Investment giving rise to such distribution, or (B) if such distribution is not attributable to an Investment or Temporary Investment, in proportion to their respective proportionate interests in the Partnership property or funds that produced such proceeds, as reasonably determined by the General Partner, or (C) in the case of a distribution upon dissolution, in proportion to the final distributions to them pursuant to Section 8.3. Any reductions in the Capital Accounts pursuant to clause (ii) above shall be allocated among the non-defaulting Partners (other than UST) that made Capital Contributions in respect of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts of the Partners shall be adjusted pursuant to Article IX to take account of changes to the Partners' Capital Accounts pursuant to this Section 7.3(e). (f) The General Partner shall have the right in its sole discretion to prohibit a Defaulting Partner from making any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary Investment, if any, with respect to which such Defaulting Partner initially defaulted) Default Loans to the Partnership with respect to any Investment or Temporary Investment. Each such Defaulting Partner shall remain fully liable to the Partnership for its obligations hereunder, to the extent provided by law and subject to the limitations effective as of this Agreement, as if such default had not occurred and shall be responsible for all expenses related to its default. (g) The General Partner shall have full power, in its sole discretion, without prejudice to any other rights or remedies the General Partner or the Partnership may have to require a Defaulting Partner (other than UST) to sell to the other Partners (other than Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital Commitments, such Defaulting Partner's Interest at a purchase price equal to the lesser of (x) the original cost of such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance of doubt, any sales and purchases of Interests pursuant to this Section 7.3(g) shall be subject to the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from UST. (h) The remedies set forth in this Section 7.3 shall not be exclusive of any other remedy which the Partnership or the Partners may have at law or in equity or under this Agreement against a Defaulting Partner (other than UST).the

Appears in 1 contract

Sources: Agreement of Limited Partnership (Tele Communications Inc /Co/)

Defaulting Partners. (a) In the event any If a Limited Partner fails to make, pay any installment of its Capital Commitment when due or fails to make any Additional Capital Contribution under Section 4.1(d) when due, any portion a notice of a default shall be given to such Limited Partner by the General Partner by facsimile transmission, hand delivery or by certified or registered mail, each of which is to be confirmed by telephone by the General Partner. If the installment or Additional Capital Contribution required to be contributed is not received by such Partner pursuant to this Agreement or any other payment required to be made by it hereunder, then the Partnership shall promptly provide written notice to such Partner, UST and SIGTARP of such failure. If such Partner fails to make such Capital Contribution or other payment within five (5) Business Days business days after the receipt of such notice then of default, such Partner amount shall be deemed bear interest payable to the Partnership at a rate of 18% per annum or, if lower, the highest rate of interest permitted under applicable law, from and after the original due date of such installment or Additional Capital Contribution (the "Default Date") until the earliest of either (i) the payment of such installment or Additional Capital Contribution, including any interest accruing under this Section 4.2(a), (ii) the purchase of such Defaulting Partner's Defaulted Interest (as defined below) under Section 4.2(b), or (iii) the amount in respect conclusion of which foreclosure proceedings under Section 4.2(d). Any interest paid by a Defaulting Partner has defaulted being pursuant to this Section 4.2(a) shall not be treated as a “Defaulted Amount”Capital Contribution but shall be treated as income of the Partnership. Notwithstanding any other provision of this Agreement, a Defaulting Partner's obligation to pay any due and unpaid installment of its Capital Commitment or due and unpaid Additional Capital Contribution under this Section 4.2(a) and shall comply with all requirements of Treasury Regulation Section 1.704-1(b)(2)(ii)(C), such that the General Defaulting Partner shall immediately notify UST and SIGTARP have a deficit restoration obligation within the meaning of such failureTreasury Regulation Section 1.704-1(b)(2)(ii)(C). (b) The Defaulted Amount may be deducted from In addition to, and not in limitation of the foregoing, upon ten (10) days' written notice to any distribution of Temporary Investment Income, Investment Proceeds Partner which becomes a Defaulting Partner (and liquidating distributions provided that such default has not been cured by the Defaulting Partner would otherwise receive. (c) In the event that any Partner defaults in making a Capital Contribution to the Partnershipwithin such 10-day period), the General Partner may require all of the Non- Defaulting Partners (other than UST) to increase their Capital Contributions by an aggregate amount equal to the Defaulted Amount. For the avoidance of doubt, UST shall not be required to increase its Capital Contributions in respect of any Defaulted Amount. (d) Each Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 7.3 (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 Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted by Section 17-306 of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each of the General Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Capital Contribution or any other payment required to be made by UST hereunder other than the remedies set forth in Section 7.3(b). (e) In the event any Partner (other than UST) becomes a Defaulting Partner, the General Partner shall have the right in its sole discretion to take any onediscretion, a combination or all of the following actions: may: (i) cause such Defaulting Partner offer to forfeit all non-defaulting Limited Partners the right to acquire (subject to the other Partners as recompense for damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), the Partnership may withhold (for the account terms of such Partners), Article 7 hereof) all or any portion of distributions of Investment Proceeds or Temporary Investment Income that such Partner would otherwise receive, except to the extent of Investment Proceeds or Temporary Investment Income constituting a return of Capital Contributions made by such Defaulting Partner less any expenses, deductions or losses allocated to such Defaulting Partner, 's Defaulted Interest; (ii) assess in the event that the entire Equity Interest of the Defaulting Partner in the Partnership (a fifty percent "Defaulted Interest") is not acquired by the Limited Partners pursuant to clause (50%i) reductionabove, cause the Partnership to acquire all or such other greater or lesser reduction as permitted by applicable law, to a portion of the Capital Account portion of such Defaulting Partner's Defaulted Interest in the Partnership not so acquired; PROVIDED, HOWEVER, that the aggregate amount of the Defaulting Partner's Defaulted Interest purchased by the Limited Partners pursuant to clause (i) and by the Partnership pursuant to this clause (ii) must be equal to the entire Defaulted Interest of the Defaulting Partner, unless the remainder of such Defaulted Interest is acquired pursuant to clause (iii) reduce or cancel below; and/or (iii) in the available Capital Commitment event that the entire Defaulted Interest of the Defaulting Partner on such terms as is not acquired by the General Partner determines in its discretion Limited Partners pursuant to clause (which may include leaving such Defaulting Partner obligated to make Capital Contributions with respect to Partnership Expenses); provided that the Capital Commitment of UST shall be reduced to the extent necessary to comply with Section 3.1(gi) and (iv) institute proceedings against the Defaulting Partner to recover any unrecouped Defaulted Amount. Any amounts withheld from the Defaulting Partner above and/or by the Partnership pursuant to clause (iii) above above, designate one or more third parties, which parties may be Limited Partners, to acquire (subject to the terms of Article 7 hereof) all, but not less than all, of the Defaulting Partner's Defaulted Interest not so acquired. A copy of any notice provided to a Defaulting Partner pursuant to this Section 4.2(b) shall be allocated and distributed transmitted promptly to all other Partners. In the event that a Defaulting Partner shall pay any overdue installment of its Capital Commitment or overdue Additional Capital Contribution, plus interest in accordance with paragraph (a), prior to the other Partners expiration of the above-referenced 10-day notice period, such Partner shall cease to be a Defaulting Partner and the remedies provided in this paragraph (other than USTb) and in paragraph (Ad) in proportion shall not be available with respect thereto. (c) With respect to their respective Percentage Interests attributable any acquisition made pursuant to subsection (b) above, the aggregate consideration payable to the Investment or Temporary Investment giving rise Defaulting Partner shall be a cash payment in an amount equal to 70% of such distributionDefaulting Partner's Estimated Value Capital Account; and each acquiring party shall be obligated, or (B) if severally and not jointly, to pay its PRO RATA portion of such distribution is not attributable consideration based on the percentage of the Defaulting Partner's Defaulted Interest acquired by such party. In the event that the General Partner exercises its right to an Investment or Temporary Investment, in proportion to their respective proportionate interests in cause the Partnership property or funds that produced such proceeds, as reasonably determined by the General to acquire a Defaulting Partner, or (C) in the case of a distribution upon dissolution, in proportion to the final distributions to them 's Defaulted Interest pursuant to Section 8.3. Any reductions subsection (b)(ii) above, for purposes of determining each Partner's liability for any resulting Contribution Calls made in connection therewith, the Capital Accounts pursuant to clause (ii) above shall be allocated among the non-defaulting Partners (other than UST) that made Capital Contributions in respect of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts Equity Interest Percentages of the Partners shall be adjusted pursuant to Article IX to take account calculated assuming that the Partnership's proposed purchase of changes to all or a portion of the Partners' Capital Accounts pursuant to this Section 7.3(e)Defaulted Interest has been completed. (fd) The In addition to, or in lieu of, and not in limitation of any of the foregoing, upon termination of the 10-day period provided in paragraph (b) above, the General Partner shall have the right in its sole discretion to prohibit a Defaulting Partner from making any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary Investment, if any, with respect to which such Defaulting Partner initially defaulted) to the Partnership with respect to any Investment or Temporary Investment. Each such Defaulting Partner shall remain fully liable to the Partnership for its obligations hereunder, to the extent provided by law and subject to the limitations of this Agreement, as if such default had not occurred and shall be responsible for all expenses related to its default. (g) The General Partner shall have full powerPartner, in its sole discretion, without prejudice may commence proceedings to collect any other rights due and unpaid installment of the Defaulting Partner's Capital Commitment or remedies Additional Capital Contribution, as applicable, (plus interest in accordance with paragraph (a) above) and the expenses of collection, including court costs and attorneys' fees and disbursements. (e) Any actions taken by the General Partner or the Partnership pursuant to paragraphs (a) through (d), inclusive, of this Section 4.2 shall be in addition to and not in limitation of any other rights or remedies that the Partnership may have against the Defaulting Partner, including, but not limited to, the right to require hold the Defaulting Partner responsible for any damages or liabilities (including attorneys' fees) to which the Partnership may be subjected (in whole or in part) as a result of the default by the Defaulting Partner. (f) Each Limited Partner hereby agrees that, in the event that such Limited Partner shall fail to pay when due any installment of its Capital Commitment or Additional Capital Contribution, as applicable, required pursuant to Section 4.1 and the General Partner elects to pursue any remedy set forth in paragraph (b) above, such Limited Partner shall sell, assign, transfer and convey to the Partnership, any designee of the General Partner or any and all Limited Partners making the election contemplated by subparagraph (b), its entire Equity Interest in the Partnership in consideration of the amount determined in accordance with the provisions of paragraph (c) of this Section 4.2. (g) So long as a Defaulting Partner (other than UST) to sell to the other Partners (other than remains a Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital CommitmentsPartner, such Defaulting Partner's Interest at a purchase price equal to the lesser of (x) the original cost of such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance of doubt, any sales and purchases of Interests pursuant to this Section 7.3(g) shall be subject to the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from UST. (h) The remedies set forth in this Section 7.3 shall not be exclusive of entitled to exercise any other remedy which the Partnership or the Partners may have at law or in equity or voting rights otherwise granted to such Partner under this Agreement against a Defaulting Partner (other than UST)Agreement.

Appears in 1 contract

Sources: Limited Partnership Agreement (Beacon Capital Partners Inc)

Defaulting Partners. (a) In the event If at any Partner fails to make, when due, time any portion of a Capital Contribution required to be contributed by such Partner pursuant to this Agreement or any other payment required to be made by it hereunder, then the Partnership shall promptly provide written notice to such Partner, UST and SIGTARP of such failure. If such Limited Partner fails to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice then such Partner shall be deemed a “Defaulting Partner” (the amount in respect of which a Defaulting Partner has defaulted being a “Defaulted Amount”) and the General Partner shall immediately notify UST and SIGTARP of such failure. (b) The Defaulted Amount may be deducted from any distribution of Temporary Investment Income, Investment Proceeds and liquidating distributions that such Defaulting Partner would otherwise receive. (c) In the event that any Partner defaults in making a Capital Contribution to the Partnership, the General Partner may require all of the Non- Defaulting Partners (other than UST) to increase their Capital Contributions by an aggregate amount equal to the Defaulted Amount. For the avoidance of doubt, UST shall not be required to increase its Capital Contributions in respect of any Defaulted Amount. (d) Each Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 7.3 (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 Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted by Section 17-306 of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each of the General Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Capital Contribution or any other payment required to be made by UST hereunder other than the remedies set forth in Section 7.3(b). (e) In the event any Partner (other than UST) becomes a Defaulting Partner, the General Partner shall have the right in its sole discretion to take any one, a combination or all of the following actions: (i) cause such Defaulting Partner to forfeit to the other Partners as recompense for damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), the Partnership may withhold (for the account of such Partners), all or any portion of distributions any required Capital Contribution on the date specified therefor in accordance with Section 4.1 and such failure shall continue beyond ten (10) Business Days from the date such Capital Contribution is due (each, a “Payment Default”), the Limited Partner failing to pay such amounts shall be deemed to be a Defaulting Partner under Article XVI. In addition, without limiting any other remedies that may be available pursuant to Article XVI, upon the occurrence of Investment Proceeds or Temporary Investment Income that such any Payment Default, the non-defaulting Limited Partner would otherwise receive(the “Contributing Partner”) may, except upon written notice to the extent Defaulting Partner and the Partnership, exercise one of Investment the following rights or remedies: (a) Request a refund of its share of the applicable Capital Contribution within ten (10) days after the Payment Default by the Defaulting Partner, in which case the Partnership shall immediately refund such amount to the Contributing Partner; or (b) Cause the Partnership to retain the Contributing Partner’s share of such requested Capital Contribution and, at its option, elect to contribute to the Partnership the Defaulting Partner’s share of such requested Capital Contribution, in which case all amounts contributed by the Contributing Partner (including both the Contributing Partner’s and, if it elects to contribute such amount, the Defaulting Partner’s portion thereof) shall be deemed to be a loan by the Contributing Partner to the Partnership (a “Default Loan”). The making of a Default Loan by a Contributing Partner shall not constitute a cure of the breach by the Defaulting Partner of its obligations pursuant to this Article IV. Each Default Loan (i) shall be a loan by the Contributing Partner to the Partnership, (ii) shall accrue interest at the Default Rate, and (iii) shall be repaid, along with all accrued and unpaid interest, on a priority basis from Operating Cash and Capital Proceeds (with all costs associated with the Default Loan being the responsibility of the Defaulting Partner except that the repayment of principal and interest shall be a Partnership obligation). The Capital Account of the Contributing Partner shall not be credited with the amount of any Capital Contribution designated as a Default Loan. The repayment of a Default Loan and payment or Temporary Investment Income constituting reimbursement of any interest or expenses thereunder shall not constitute a return of Capital Contributions Contributions, shall not reduce the Contributing Partner’s Capital Account, and shall not be considered for purposes of determining the rate of return hereunder; provided, however, that all such Default Loans made by such Defaulting Partner less any expenses, deductions or losses allocated to such Defaulting Partner, (ii) assess a fifty percent (50%) reduction, or such other greater or lesser reduction as permitted by applicable law, to the Capital Account of such Defaulting Partner, (iii) reduce or cancel the available Capital Commitment of the Defaulting Partner on such terms as the General Partner determines in its discretion (which may include leaving such Defaulting Partner obligated to make Capital Contributions with respect to Partnership Expenses); provided that the Capital Commitment of UST shall be reduced to the extent necessary to comply with Section 3.1(g) and (iv) institute proceedings against the Defaulting Partner to recover any unrecouped Defaulted Amount. Any amounts withheld from the Defaulting Partner by the Partnership pursuant to clause (i) above shall be allocated and distributed to the other Partners (other than UST) (A) in proportion to their respective Percentage Interests attributable to the Investment or Temporary Investment giving rise to such distribution, or (B) if such distribution is not attributable to an Investment or Temporary Investment, in proportion to their respective proportionate interests in the Partnership property or funds that produced such proceeds, as reasonably determined by the General Partner, or (C) in the case of a distribution upon dissolution, in proportion to the final distributions to them pursuant to Section 8.3. Any reductions in the Capital Accounts pursuant to clause (ii) above shall be allocated among the non-defaulting Partners (other than UST) that made Capital Contributions in respect of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts of the Partners shall be adjusted pursuant to Article IX to take account of changes to the Partners' Capital Accounts pursuant to this Section 7.3(e). (f) The General Partner shall have the right in its sole discretion to prohibit a Defaulting Partner from making any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary InvestmentInvestor LP, if any, must be repaid to Investor LP, together with respect all accrued and unpaid interest thereon, in order for Investor LP to which such Defaulting Partner initially defaulted) to the Partnership with respect to any Investment receive its Investor 12% Return, Investor 13% Return, or Temporary Investment. Each such Defaulting Partner shall remain fully liable to the Partnership for its obligations hereunder, to the extent provided by law and subject to the limitations of this AgreementInvestor 14% Return, as if such default had not occurred applicable, and shall be responsible for all expenses related to its default. (g) The General Partner shall have full power, as more fully provided in its sole discretion, without prejudice to any other rights or remedies the General Partner or the Partnership may have to require a Defaulting Partner (other than UST) to sell to the other Partners (other than Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital Commitments, such Defaulting Partner's Interest at a purchase price equal to the lesser of (x) the original cost definitions of such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance of doubt, any sales and purchases of Interests pursuant to this Section 7.3(g) shall be subject to the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from UST. (h) The remedies returns set forth in this Section 7.3 shall 1.1. In the event that the Contributing Partner does not exercise either of the foregoing within ten (10) days after the Payment Default by the Defaulting Partner, the Contributing Partner will be exclusive deemed to have elected to exercise its right (A) to treat the amount contributed by it as a Default Loan, and (B) not to contribute the Defaulting Partner’s share of any other remedy which the Partnership or the Partners may have at law or in equity or under this Agreement against a Defaulting Partner (other than UST)requested Capital Contributions.

Appears in 1 contract

Sources: Limited Partnership Agreement (U-Store-It Trust)

Defaulting Partners. Subject to Section 6.7 (a) In the event Excused Limited Partners.), if any Partner fails to make, when due, make any portion of a Capital Contribution or any other amount required to be contributed funded by such Limited Partner under this Agreement or any corresponding agreement or with respect to any other Fund Vehicle (including the obligation to return and contribute distributions to the Fund pursuant to Section 14.7(a) (Clawback.) or Section 16.3 (Limited Partner Giveback.)), the General Partner shall notify such Partner in writing of such failure (a "Default Notice"). If such failure continues for [five Business Days] after receipt by such Limited Partner of the Default Notice, then such Partner shall be designated by the General Partner as in "Default" under this Agreement (a "Defaulting Partner") and will be subject to this Section 6.6 (Defaulting Partners.). The General Partner may, if it determines this to be in the best interests of the Fund and the Non-Defaulting Partners, choose not to designate any Partner as a Defaulting Partner and may agree to waive or permit the cure of any Default by a Partner, subject to such conditions as the General Partner and the Defaulting Partner may agree upon, provided that any such decision not to designate any Affiliated Partner as a Defaulting Partner or to waive or permit the cure of any Default by an Affiliated Partner is subject to the prior written consent of the LP Advisory Committee. The General Partner shall inform the Limited Partners of the occurrence of any such Default and of any action taken by it with respect to any Defaulting Partner within [30] days of the Defaulting Partner becoming a Defaulting Partner. A Limited Partner that fails to make all or any portion of any Capital Contribution or other payment required pursuant to this Agreement on the relevant Due Date shall pay or reimburse the Fund for any resulting Damages. In addition, any amounts that are not duly paid on the relevant Due Date shall accrue interest at the Prime Rate plus [10%] per year from the Due Date as specified in the relevant Default Notice until the date the Limited Partner makes the Capital Contribution. Any proceeds received by the Fund pursuant to this Section 6.6(c) (Defaulting Partners.) and Section 6.6(d) (Defaulting Partners.), including any amounts that would otherwise have been distributed to such Defaulting Partner, shall (i) first be applied to reimburse the Fund Parties for any related costs and expenses incurred due to such Defaulting Partner's Default as determined by the General Partner and notified to the Defaulting Partner by the General Partner, and (ii) thereafter be distributed to the Limited Partners who are not Defaulting Partners (the "Non-Defaulting Partners") pursuant to Article 14 (Distributions; Allocations) if attributable to a Portfolio Investment and otherwise in proportion to their Commitments (provided that a Non-Defaulting Partner shall not receive a distribution with respect to a Portfolio Investment with respect to which it is an Excused Limited Partner). Without limiting Section 6.6(c) (Defaulting Partners.) above or Section 6.6(h) (Defaulting Partners.) below, the General Partner, on its own behalf or on behalf of the Fund, may pursue and enforce any rights and remedies the Fund, the General Partner or the Manager may have against such Defaulting Partner at law, in equity or pursuant to any other provision of this Agreement or otherwise, including taking any of the following actions in any order of priority (it being understood that the taking of one or more actions, or no action at all, by the General Partner with respect to a Defaulting Partner pursuant to this Section 6.6(d) will not restrict or otherwise limit the General Partner's ability to take one or more actions not prohibited by this Agreement, or no action at all, or in a different order of priority, with respect to any other Defaulting Partner pursuant to this Section 6.6(d): 81 determine that the Defaulting Partner will not be entitled to receive any or a portion of the distributions from the Fund (which amounts shall be forfeited by such Defaulting Partner) that would otherwise be made to the Defaulting Partner pursuant to this Agreement and may apply such withheld distributions to offset [or compensate]82 any other payment required to be made defaulted amount owing by it hereunder, then the Partnership shall promptly provide written notice to such Partner, UST and SIGTARP of such failure. If such Partner fails to make such Capital Contribution or other payment within five (5) Business Days after receipt of such notice then such Partner shall be deemed a “Defaulting Partner” (the amount in respect of which a Defaulting Partner has defaulted being a “Defaulted Amount”) and the General Partner shall immediately notify UST and SIGTARP of such failure. (b) The Defaulted Amount may be deducted from any distribution of Temporary Investment Income, Investment Proceeds and liquidating distributions that such Defaulting Partner would otherwise receive. (c) In the event that any Partner defaults in making a Capital Contribution to the Partnership, the General Partner may require all of the Non- Defaulting Partners (other than UST) to increase their Capital Contributions by an aggregate amount equal to the Defaulted Amount. For the avoidance of doubt, UST shall not be required to increase its Capital Contributions in respect of any Defaulted Amount. (d) Each Partner acknowledges by its execution hereof that it has been admitted to the Partnership in reliance upon its agreements under this Section 7.3 (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 Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted by Section 17-306 of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each of the General Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Capital Contribution or any other payment required to be made by UST hereunder other than the remedies set forth in Section 7.3(b). (e) In the event any Partner (other than UST) becomes a Defaulting Partner, the General Partner shall have the right in its sole discretion to take any one, a combination or all of the following actions: (i) cause such Defaulting Partner to forfeit to the other Partners as recompense for damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), the Partnership may withhold (for the account of such Partners), all or any portion of distributions of Investment Proceeds or Temporary Investment Income that such Partner would otherwise receive, except to the extent of Investment Proceeds or Temporary Investment Income constituting a return of Capital Contributions made by such Defaulting Partner less any expenses, deductions or losses allocated to such Defaulting Partner, (ii) assess a fifty percent (50%) reduction, or such other greater or lesser reduction as permitted by applicable law, to the Capital Account of such Defaulting Partner, (iii) reduce or cancel the available Capital Commitment of the Defaulting Partner on such terms as the General Partner determines in its discretion (which may include leaving such Defaulting Partner obligated to make Capital Contributions with respect to Partnership Expenses); provided that the Capital Commitment of UST shall be reduced to the extent necessary to comply with Section 3.1(g) and (iv) institute proceedings against the Defaulting Partner to recover the Fund or any unrecouped Defaulted Amount. Any amounts withheld from Alternative Vehicle; determine that the Defaulting Partner by Partner's Interest may be sold for a purchase price equal to [50]% of the Partnership pursuant to clause lesser of (i) above shall be allocated and distributed to the other Partners (other than UST) (A) in proportion to their respective Percentage Interests attributable to the Investment or Temporary Investment giving rise to such distributionDefaulting Partner's aggregate Capital Contributions, or (B) if such distribution is not attributable to an Investment or Temporary Investment, in proportion to their respective proportionate interests in the Partnership property or funds that produced such proceeds, as reasonably determined by the General Partner, or (C) in the case of a distribution upon dissolution, in proportion to the final distributions to them pursuant to Section 8.3. Any reductions in the Capital Accounts pursuant to clause (ii) above shall be allocated among the non-defaulting Partners (other than UST) that made Capital Contributions in respect Value of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts of the Partners shall be adjusted pursuant to Article IX to take account of changes to the Partners' Capital Accounts pursuant to this Section 7.3(e). (f) The General Partner shall have the right in its sole discretion to prohibit a Defaulting Partner from making any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary Investment, if any, with respect to which such Defaulting Partner initially defaulted) to the Partnership with respect to any Investment or Temporary Investment. Each such Defaulting Partner shall remain fully liable to the Partnership for its obligations hereunder, to the extent provided by law and subject to the limitations of this Agreement, as if such default had not occurred and shall be responsible for all expenses related to its default. (g) The General Partner shall have full power, in its sole discretion, without prejudice to any other rights or remedies the General Partner or the Partnership may have to require a Defaulting Partner (other than UST) to sell to the other Partners (other than Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital Commitments, such Defaulting Partner's Interest at a purchase price equal the time of such Default, in each case net of any amounts payable to the lesser of (x) the original cost of such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance of doubt, any sales and purchases of Interests Fund pursuant to this Section 7.3(g6.6(c) shall (Defaulting Partners.), provided that any such offer may, to a Person that is an Interested Person, only be subject to made with the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from UST. (h) The remedies set forth in this Section 7.3 shall not be exclusive of any other remedy which the Partnership or the Partners may have at law or in equity or under this Agreement against a LP Advisory Committee, and provided, further that such Defaulting Partner will remain subject to Section 16.3 (other than UST)Limited Partner Giveback.) and upon such Transfer the Defaulting Partner will otherwise cease to be a Limited Partner; 83

Appears in 1 contract

Sources: Limited Partnership Agreement

Defaulting Partners. (a) In the event 6.6.1 Subject to Section 6.7 (Excused Limited Partners.), if any Partner fails to make, when due, make all or any portion of a anya Capital Contribution or any other amount required to be contributed funded by such Limited Partner pursuant to the provisions ofunder this Agreement or any corresponding agreement or with respect to any other payment required Fund Vehicle (including, but not limited to, the obligation to be made by it hereunderreturn and contribute distributions to the Fund pursuant to Section 14.7(a) (Clawback.) or Section 16.3 (Limited Partner Giveback.)), then the Partnership General Partner shall promptly provide written notice to notify such Partner, UST and SIGTARP Partner in writing of such failurefailure (a “"Default Notice”"). If such Partner fails to make such Capital Contribution or other payment within failure continues for [five (5) )] Business Days Days] after receipt by such Limited Partner of such notice the Default Notice, then such Partner shall be deemed designated by the General Partner as in “"Default”" under this Agreement (a “"Defaulting Partner”") and shall thereafterwill be subject to the provisions of this Section 6.6 (Defaulting Partners.). The General Partner may, if it determines this to be in the amount in respect best interests of which the Fund and the Non-Defaulting Partners, choose not to designate any Partner as a Defaulting Partner has defaulted being and 11 Note that some80 investors may require a “Defaulted Amount”cap (e.g., 110% to 130% of commitments) on total investments that may be possible through are subject to reinvestment/recycling. Also, there is a variety of different approaches to reinvestment related to timing, size and type of proceeds that are subject to reinvestment. This will depend on underlying assets of each fund and the General Partner shall immediately notify UST and SIGTARP investment objectives of such failure. (b) The Defaulted Amount its manager. Some funds may be deducted from any institute automatic distribution of Temporary Investment Income, Investment Proceeds and liquidating distributions that such Defaulting Partner would otherwise receive. (c) In reinvestment plans. may agree to waive or permit the event that any Partner defaults in making a Capital Contribution to the Partnership, the General Partner may require all of the Non- Defaulting Partners (other than UST) to increase their Capital Contributions by an aggregate amount equal to the Defaulted Amount. For the avoidance of doubt, UST shall not be required to increase its Capital Contributions in respect cure of any Defaulted Amount. (d) Each Partner acknowledges Default by its execution hereof that it has been admitted a Partner, subject to the Partnership in reliance upon its agreements under this Section 7.3 (such conditions as well as the other provisions of this Agreement), that the General Partner and the Partnership Defaulting Partner 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 agree upon, provided that any amount due such decision not to be paid, forfeited or otherwise deducted from designate any amount otherwise due to be paid to any Partner, or any abrogation of rights in respect of allocations, distributions or withdrawals, due to be made pursuant to the provisions of this Article VII constitutes a specified penalty or consequence permitted by Section 17-306 of the Act. Notwithstanding the foregoing, to the fullest extent not prohibited by law, each of the General Affiliated Partner and the Partnership hereby waives any action, remedy and/or recovery against UST for any failure to fund any Capital Contribution or any other payment required to be made by UST hereunder other than the remedies set forth in Section 7.3(b). (e) In the event any Partner (other than UST) becomes a Defaulting Partner, the General Partner shall have the right in its sole discretion to take any one, a combination or all of the following actions: (i) cause such Defaulting Partner to forfeit to the other Partners as recompense for damages suffered, and, in addition to any deductions from distributions pursuant to Section 7.3(b), the Partnership may withhold (for the account of such Partners), all or any portion of distributions of Investment Proceeds or Temporary Investment Income that such Partner would otherwise receive, except to the extent of Investment Proceeds or Temporary Investment Income constituting a return of Capital Contributions made by such Defaulting Partner less any expenses, deductions or losses allocated to such Defaulting Partner, (ii) assess a fifty percent (50%) reduction, or such other greater or lesser reduction as permitted by applicable law, to the Capital Account of such Defaulting Partner, (iii) reduce or cancel the available Capital Commitment of the Defaulting Partner on such terms as the General Partner determines in its discretion (which may include leaving such Defaulting Partner obligated to make Capital Contributions with respect to Partnership Expenses); provided that the Capital Commitment of UST shall be reduced to the extent necessary to comply with Section 3.1(g) and (iv) institute proceedings against the Defaulting Partner to recover any unrecouped Defaulted Amount. Any amounts withheld from the Defaulting Partner by the Partnership pursuant to clause (i) above shall be allocated and distributed to the other Partners (other than UST) (A) in proportion to their respective Percentage Interests attributable to the Investment or Temporary Investment giving rise to such distribution, or (B) if such distribution is not attributable to an Investment or Temporary Investment, in proportion to their respective proportionate interests in the Partnership property or funds that produced such proceeds, as reasonably determined by the General Partner, or (C) in the case of a distribution upon dissolution, in proportion to the final distributions to them pursuant to Section 8.3. Any reductions in the Capital Accounts pursuant to clause (ii) above shall be allocated among the non-defaulting Partners (other than UST) that made Capital Contributions in respect of such Investment or Temporary Investment in proportion to such Capital Contribution. The Capital Accounts of the Partners shall be adjusted pursuant to Article IX to take account of changes to the Partners' Capital Accounts pursuant to this Section 7.3(e). (f) The General Partner shall have the right in its sole discretion to prohibit a Defaulting Partner from making or to waive or permit the cure of any further Capital Contributions (including any Capital Contributions to be applied toward the Investment or Temporary Investment, if any, with respect to which such Defaulting Partner initially defaulted) to the Partnership with respect to any Investment or Temporary Investment. Each such Defaulting Default by an Affiliated Partner shall remain fully liable to the Partnership for its obligations hereunder, to the extent provided by law and beis subject to the limitations of this Agreement, as if such default had not occurred and shall be responsible for all expenses related to its default. (g) The General Partner shall have full power, in its sole discretion, without prejudice to any other rights or remedies the General Partner or the Partnership may have to require a Defaulting Partner (other than UST) to sell to the other Partners (other than Defaulting Partners) who wish to purchase, on a pro rata basis based on their respective Capital Commitments, such Defaulting Partner's Interest at a purchase price equal to the lesser of (x) the original cost of such Defaulting Partner's Interest and (y) such price as the General Partner determines in its discretion is fair and reasonable under the circumstances. For the avoidance of doubt, any sales and purchases of Interests pursuant to this Section 7.3(g) shall be subject to the transfer restrictions of Section 7.2, including, without limitation, the requirement of prior written consent from USTof the LP Advisory Committee. (h) The remedies set forth in this Section 7.3 shall not be exclusive of any other remedy which the Partnership or the Partners may have at law or in equity or under this Agreement against a Defaulting Partner (other than UST).

Appears in 1 contract

Sources: Limited Partnership Agreement