Common use of FAILURE TO CONTRIBUTE Clause in Contracts

FAILURE TO CONTRIBUTE. If a Limited Partner (“Delinquent Limited Partner”) does not contribute all or any portion of the Capital Contribution required pursuant to and at the time required by, such Limited Partner’s Commitment, the Company may sell additional interests in the Company to existing Limited Partners on a Right of First Refusal Basis at a rate of 1.5 times the value of the original investment. If the existing Limited Partners of the Company do not elect to participate in the purchase of additional interests, the Company may sell the interests to a third party at a rate of 1.5 times the value of the original investment. For example, if there is a Capital Call of $100,000 to which a Limited Partner is called to contribute 10%, and the Limited Partner fails to contribute, the dilution will actually affect their Percentage Interest at a rate of 1.5 times the value and it will instead be attributed to the value of the purchasing Limited Partner or third party.