Common use of Continuing Participation Clause in Contracts

Continuing Participation. (a) The Managing Member may excuse any Capital Investment Member from continuing participation in an Investment in a Portfolio Company (such Capital Investment Member shall be an "Excused Member" with respect thereto and such Investment shall be an "Excused Investment") if the Managing Member determines that there is a substantial likelihood that such Capital Investment Member's continuing indirect Investment in such Portfolio Company might have a Material Adverse Effect (as defined in Section 2.11(d) below) on the Company or the Portfolio Company and the Managing Member shall have given 10 days' advance written notice to any such Capital Member specifying its reason for availing itself of the provisions of this Section 2.11(a) and shall have delivered to such Capital Investment Member an opinion of counsel to such effect. Such Capital Investment Member shall become an Excused Member with respect to such Excused Investment as soon as practicable. The Managing Member shall take commercially reasonable steps to cause the portion of the Excused Investment that would have been allocated to the Excused Member promptly to be sold by the Company for a cash price equivalent to the Fair Market Value of such portion of the Excused Investment, taking into account the factors set forth in Section 4.8(c). The proceeds of such sale shall be paid over to such Excused Member. All costs and expenses of the Company in respect of the determinations and other matters referred to in this Section 2.11 shall be allocated to the Capital Account of the Excused Member. (b) If at any time the Managing Member determines in good faith that there is a substantial likelihood that the continuing participation in the Company by any Capital Investment Member might have a Material Adverse Effect on the Company, such Capital Investment Member will, at the request of the Managing Member, use its best efforts to dispose of its entire interest in the Company (or such portion of its interest in the Company that is sufficient to prevent or remedy such Material Adverse Effect) to any person at a price acceptable to such Capital Investment Member, in a transaction which complies with Section 7.3. If such Capital Investment Member has not disposed of such of its interest as is sufficient to prevent or remedy such Material Adverse Effect within ninety (90) days of the Managing Member having notified such Capital Investment Member of the determination set forth in the preceding sentence (or within such fewer number of days as the Managing Member may determine, as supported by an opinion of counsel, is necessary to avoid a Material Adverse Effect), then the Managing Member shall have the right, upon at least 15 days' prior written notice to such Capital Investment Member, to take, in its sole discretion any or all of the following actions to prevent or remedy such Material Adverse Effect: (i) prohibit such Capital Investment Member from making a Capital Contribution with respect to any and all future investments in Portfolio Companies and reduce its unused Capital Commitment to any amount (greater than or equal to zero); (ii) offer to any person, including each other Member, the opportunity to purchase all or a portion of such Capital Investment Member's interest in the Company at its Fair Market Value (provided that if the Managing Member itself purchases such interest, the purchase price shall be determined by an appraiser mutually acceptable to such Capital Investment Member and the Managing Member, the cost of such appraiser to be divided equally between the Managing Member and such Capital Investment Member); or (iii) liquidate all or any portion of such Capital Investment Member's interest, taking into account the factors set forth in Section 4.8 and making adjustments to the Capital Investment Members' Capital Account balances in accordance with Section 2.3(b), in the Company or make, subject to Section 4.4(b)(iii), a special distribution in respect of such interest to such Capital Investment Member where, with respect to such distribution, the Managing Member (x) shall reduce the Capital Account of such Capital Investment Member by the amount of the distribution, provided that in no event shall such Capital Investment Member's Capital Account (as it would exist upon the deemed sale of all Company assets) be reduced to an amount which is less than zero and (y) may choose to distribute cash, cash equivalents and securities or any combination of the foregoing, in an amount (or having a value) equal to the Fair Market Value of such interest. (c) Any Capital Investment Member shall be excused from continuing participation in the Company or participation in future investments of the Company if the following conditions are met: (i) such Capital Investment Member reasonably determines in good faith that its continuing investment in the Company or participation in future investments of the Company would have a Material Adverse Effect on such Capital Investment Member; (ii) such Capital Investment Member shall have given the Managing Member twenty (20) days' advance written notice of its intention to avail itself of the provisions of this Section 2.11(c); and (iii) within ten (10) days of the giving of notice pursuant to subparagraph (ii) above, such Capital Investment Member shall have delivered to the Managing Member an opinion of counsel reasonably satisfactory to the Managing Member to the effect that its continuing participation in the Company or participation in future investments of the Company would result in a Material Adverse Effect on such Capital Investment Member. If the foregoing conditions are met, the Managing Member shall cause the Capital Investment Member's interest in the Company to be sold by the Company in accordance with Section 2.11(b)(ii) and to dispose of any portion thereof remaining unsold in accordance with Section 2.11(b)(iii), or, at the option of such Capital Investment Member, excuse such Capital Investment Member from participation in any future investments of the Company. All costs and expenses of the Company in respect of the determinations and other matters referred to in this Section 2.11(c) shall be allocated to the Capital Account of the Capital Investment Member excused from the Company. (d) A contribution or investment or a purchase of all or any portion of an interest in the Company by any Capital Investment Member shall have a "Material Adverse Effect" if such contribution, investment or purchase is substantially likely, when taken by itself or together with the contributions, investments or purchases by any other Capital Investment Members, (i) to result in a violation of a statute, rule or regulation of a federal, state or foreign governmental authority which might have a material adverse effect on a Portfolio Company, the Company or any Member, as the case may be (including that a Capital Member classified as a tax-exempt organization pursuant to Section 501(c)(3) of the Code will lose its status as such), (ii) to subject a Portfolio Company, the Company or any Member, as the case may be, to any material tax or governmental charge (not including any loss or deferral of an interest deduction pursuant to Section 163(j) of the Code, as enacted by the Omnibus Budget Reconciliation Act of 1989, or any successor provisions thereto), or to any material filing or regulatory requirement (including the Investment Company Act) to which it would not otherwise be subject or materially increase such filing or requirement beyond what it would otherwise have been, or (iii) to result in any securities or other assets owned by the Company being deemed to be "plan assets" under ERISA. In addition, a Material Adverse Effect on such Capital Investment Member shall exist if any governmental authority or official having jurisdiction over the subject matter with respect to such Capital Investment Member has taken the position that contributions, investments, or participation in partnerships or limited liability companies similar to the Company would cause such Capital Investment Member to violate laws, regulations or judicial interpretations of the same to which it is subject.

Continuing Participation. (a) The Managing Member may excuse any Capital Investment Member from continuing participation in an Investment in a Portfolio Company (such Capital Investment Member shall be an "Excused Member" with respect thereto and such Investment shall be an "Excused Investment") if the Managing Member determines that there is a substantial likelihood that such Capital Investment Member's continuing indirect Investment in such Portfolio Company might have a Material Adverse Effect (as defined in Section 2.11(d) below) on the Company or the Portfolio Company and the Managing Member shall have given 10 days' advance written notice to any such Capital Member specifying its reason for availing itself of the provisions of this Section 2.11(a) and shall have delivered to such Capital Investment Member an opinion of counsel to such effect. Such Capital Investment Member shall become an Excused Member with respect to such Excused Investment as soon as practicable. The Managing Member shall take commercially reasonable steps to cause the portion of the Excused Investment that would have been allocated to the Excused Member promptly to be sold by the Company for a cash price equivalent to the Fair Market Value of such portion of the Excused Investment, taking into account the factors set forth in Section 4.8(c). The proceeds of such sale shall be paid over to such Excused Member. All costs and expenses of the Company in respect of the determinations and other matters referred to in this Section 2.11 shall be allocated to the Capital Account of the Excused Member. (b) If at any time the Managing Member determines in good faith that there is a substantial likelihood that the continuing participation in the Company by any Capital Investment Member might have a Material Adverse Effect on the Company, such Capital Investment Member will, at the request of the Managing Member, use its best efforts to dispose of its entire interest in the Company (or such portion of its interest in the Company that is sufficient to prevent or remedy such Material Adverse Effect) to any person at a price acceptable to such Capital Investment Member, in a transaction which complies with Section 7.3. If such Capital Investment Member has not disposed of such of its interest as is sufficient to prevent or remedy such Material Adverse Effect within ninety (90) days of the Managing Member having notified such Capital Investment Member of the determination set forth in the preceding sentence (or within such fewer number of days as the Managing Member may determine, as supported by an opinion of counsel, is necessary to avoid a Material Adverse Effect), then the Managing Member shall have the right, upon at least 15 days' prior written notice to such Capital Investment Member, to take, in its sole discretion any or all of the following actions to prevent or remedy such Material Adverse Effect:remedy (i) prohibit such Capital Investment Member from making a Capital Contribution with respect to any and all future investments in Portfolio Companies and reduce its unused Capital Commitment to any amount (greater than or equal to zero); (ii) offer to any person, including each other Member, the opportunity to purchase all or a portion of such Capital Investment Member's interest in the Company at its Fair Market Value (provided that if the Managing Member itself purchases such interest, the purchase price shall be determined by an appraiser mutually acceptable to such Capital Investment Member and the Managing Member, the cost of such appraiser to be divided equally between the Managing Member and such Capital Investment Member); or (iii) liquidate all or any portion of such Capital Investment Member's interest, taking into account the factors set forth in Section 4.8 and making adjustments to the Capital Investment Members' Capital Account balances in accordance with Section 2.3(b), in the Company or make, subject to Section 4.4(b)(iii), a special distribution in respect of such interest to such Capital Investment Member where, with respect to such distribution, the Managing Member (x) shall reduce the Capital Account of such Capital Investment Member by the amount of the distribution, provided that in no event shall such Capital Investment Member's Capital Account (as it would exist upon the deemed sale of all Company assets) be reduced to an amount which is less than zero and (y) may choose to distribute cash, cash equivalents and securities or any combination of the foregoing, in an amount (or having a value) equal to the Fair Market Value of such interest. (c) Any Capital Investment Member shall be excused from continuing participation in the Company or participation in future investments of the Company if the following conditions are met: (i) such Capital Investment Member reasonably determines in good faith that its continuing investment in the Company or participation in future investments of the Company would have a Material Adverse Effect on such Capital Investment Member; (ii) such Capital Investment Member shall have given the Managing Member twenty (20) days' advance written notice of its intention to avail itself of the provisions of this Section 2.11(c); and (iii) within ten (10) days of the giving of notice pursuant to subparagraph (ii) above, such Capital Investment Member shall have delivered to the Managing Member an opinion of counsel reasonably satisfactory to the Managing Member to the effect that its continuing participation in the Company or participation in future investments of the Company would result in a Material Adverse Effect on such Capital Investment Member. If the foregoing conditions are met, the Managing Member shall cause the Capital Investment Member's interest in the Company to be sold by the Company in accordance with Section 2.11(b)(ii) and to dispose of any portion thereof remaining unsold in accordance with Section 2.11(b)(iii), or, at the option of such Capital Investment Member, excuse such Capital Investment Member from participation in any future investments of the Company. All costs and expenses of the Company in respect of the determinations and other matters referred to in this Section 2.11(c) shall be allocated to the Capital Account of the Capital Investment Member excused from the Company. (d) A contribution or investment or a purchase of all or any portion of an interest in the Company by any Capital Investment Member shall have a "Material Adverse Effect" if such contribution, investment or purchase is substantially likely, when taken by itself or together with the contributions, investments or purchases by any other Capital Investment Members, (i) to result in a violation of a statute, rule or regulation of a federal, state or foreign governmental authority which might have a material adverse effect on a Portfolio Company, the Company or any Member, as the case may be (including that a Capital Member classified as a tax-exempt organization pursuant to Section 501(c)(3) of the Code will lose its status as such), (ii) to subject a Portfolio Company, the Company or any Member, as the case may be, to any material tax or governmental charge (not including any loss or deferral of an interest deduction pursuant to Section 163(j) of the Code, as enacted by the Omnibus Budget Reconciliation Act of 1989, or any successor provisions thereto), or to any material filing or regulatory requirement (including the Investment Company Act) to which it would not otherwise be subject or materially increase such filing or requirement beyond what it would otherwise have been, or (iii) to result in any securities or other assets owned by the Company being deemed to be "plan assets" under ERISA. In addition, a Material Adverse Effect on such Capital Investment Member shall exist if any governmental authority or official having jurisdiction over the subject matter with respect to such Capital Investment Member has taken the position that contributions, investments, or participation in partnerships or limited liability companies similar to the Company would cause such Capital Investment Member to violate laws, regulations or judicial interpretations of the same to which it is subject.and