Common use of Mandatory Contributions Clause in Contracts

Mandatory Contributions. (a) If the Board has determined that the Company has, or is at immediate risk of having, (i) an inability to pay its debts as they become due, (ii) inadequate capital to carry on its business, or (iii) aggregate liabilities that exceeds it aggregate assets, then in each case of the foregoing clauses (i), (ii) and (iii), the Board may provide written notice to the Owners of the amount of such deficiency (the “Capital Deficiency”). Within fifteen (15) days (the “Contribution Period”) after receiving such notice from the Board of a Capital Deficiency, each Owner shall make a cash contribution (a “Capital Contribution”) to the Company equal to such Owner’s Ownership Percentage multiplied by the Capital Deficiency, which amount shall be utilized by the Company as required for then existing operations and obligations. Any determination to provide written notice to the Owners of a Capital Deficiency shall be made by Majority Approval. (b) In the event an Owner fails to make all or part of a Capital Contribution required pursuant to Section 2.1(a) (such Owner, a "Defaulting Owner"), the Company shall provide notice of that failure to the other Owners (each a "Super Contributing Owner") and each such other Owner may elect to contribute to the Company in cash its pro rata portion (based on its Ownership Percentage calculated excluding any holdings of the Defaulting Owner or any other Owner not electing to make a Capital Contribution) of the Capital Contribution which the Defaulting Owner failed to contribute (a “Super Contribution”). If a Super Contributing Owner elects to make a Super Contribution, the Super Contribution may be given in exchange for a promissory note issued by the Company. The promissory note shall bear interest at the lesser of the Applicable Rate or the highest annual rate permitted by applicable Law and interest shall be paid by the Company to the Super Contributing Owner on a monthly basis. The principal amount of the promissory note plus accrued but unpaid interest thereon shall be paid by the Company to the Super Contributing Owner as promptly as possible, but in any event prior to any dividend or other distribution by the Company to any holder of its Equity Interests. (c) If a Super Contributing Owner elects to receive equity in exchange for its Super Contribution (rather than a promissory note), the Company shall issue common stock to the Super Contributing Owner in exchange for such Super Contribution to the Company such that such Super Contributing Owner’s Ownership Percentage after such issuance will be equal to the quotient of (x) the Super Contribution plus the product of (A) the Super Contributing Owner’s Ownership Percentage multiplied by (B) the total stockholders’ equity of the Company as set forth in the audited financial statements of the Company for the end of the calendar year immediately preceding the Super Contribution plus the gain/loss in the calendar year the Super Contribution is made, divided by (y) the total stockholders’ equity of the Company as set forth in the audited financial statements of the Company for the end of the calendar year in which the Super Contribution is made. Any equity issuance contemplated by this Section 2.1(c) will be made promptly after the audited financial statements of the Company for the calendar year immediately following the applicable Super Contribution are available. Solely for illustrative purposes, a sample calculation with respect to the foregoing is set forth on Exhibit A. (d) For the avoidance of doubt, an election by a Super Contributing Owner to make a Super Contribution will not constitute an election of remedies or limit the Super Contributing Owner in any manner in seeking any other remedies available to it pursuant to Law. Furthermore, a Super Contribution shall not be construed as a cure or waiver with respect to a Defaulting Owner’s obligations under this Article II.

Mandatory Contributions. (a) If the Board has determined that the Company has, or is at immediate risk of having, (i) an inability to pay its debts as they become due, (ii) inadequate capital to carry on its business, or (iii) aggregate liabilities that exceeds it aggregate assets, then in each case of the foregoing clauses (i), (ii) and (iii), the Board may provide written notice to HoldCo and the Owners of the amount of such deficiency (the “Capital Deficiency”). Within fifteen (15) days (the “Contribution Period”) after receiving such notice from the Board of a Capital Deficiency, HoldCo shall make a cash contribution to the Company in an aggregate amount equal to the Capital Deficiency (but only to the extent of available unrestricted cash of HoldCo), which amount shall be utilized by the Company as required for then existing operations and obligations. If HoldCo has not contributed the entire Capital Deficiency to the Company during the Contribution Period, then promptly thereafter each Owner shall make a cash contribution (a “Capital Contribution”) to the Company equal to such Owner’s Ownership Percentage multiplied by the remaining Capital Deficiency, which amount shall be utilized by the Company as required for then existing operations and obligations. Any determination to provide written notice to HoldCo and the Owners of a Capital Deficiency shall be made by Majority Approval. (b) In the event an Owner fails to make all or part of a Capital Contribution required pursuant to Section 2.1(a) (such Owner, a "Defaulting Owner"), the Company shall provide notice of that failure to the other Owners (each a "Super Contributing Owner") and each such other Owner may elect to contribute to the Company in cash its pro rata portion (based on its Ownership Percentage calculated excluding any holdings of the Defaulting Owner or any other Owner not electing to make a Capital Contribution) of the Capital Contribution which the Defaulting Owner failed to contribute (a “Super Contribution”). If a Super Contributing Owner elects to make a Super Contribution, the Super Contribution may be given in exchange for a promissory note issued by the CompanyHoldCo. The promissory note shall bear interest at the lesser of the Applicable Rate or the highest annual rate permitted by applicable Law and interest shall be paid by the Company HoldCo to the Super Contributing Owner on a monthly basis. The principal amount of the promissory note plus accrued but unpaid interest thereon shall be paid by the Company HoldCo to the Super Contributing Owner as promptly as possible, but in any event prior to any dividend or other distribution by the Company HoldCo to any holder of its Equity Interestscapital stock. (c) If a Super Contributing Owner elects to receive equity in exchange for its Super Contribution (rather than a promissory note), the Company HoldCo shall issue common stock to the Super Contributing Owner in exchange for such Super Contribution to the Company such that such Super Contributing Owner’s Ownership Percentage after such issuance will be equal to the quotient of (x) the Super Contribution plus the product of (A) the Super Contributing Owner’s Ownership Percentage multiplied by (B) the total stockholders’ equity of the Company HoldCo as set forth in the audited financial statements of the Company HoldCo for the end of the calendar year immediately preceding the Super Contribution plus the gain/loss in the calendar year the Super Contribution is made, divided by (y) the total stockholders’ equity of the Company HoldCo as set forth in the audited financial statements of the Company HoldCo for the end of the calendar year in which the Super Contribution is made. Any equity issuance contemplated by this Section 2.1(c) will be made promptly after the audited financial statements of the Company HoldCo for the calendar year immediately following the applicable Super Contribution are available. Solely for illustrative purposes, a sample calculation with respect to the foregoing is set forth on Exhibit A. (d) For the avoidance of doubt, an election by a Super Contributing Owner to make a Super Contribution will not constitute an election of remedies or limit the Super Contributing Owner in any manner in seeking any other remedies available to it pursuant to Law. Furthermore, a Super Contribution shall not be construed as a cure or waiver with respect to a Defaulting Owner’s obligations under this Article II. (e) Any contribution by an Owner to the Company pursuant to this Article II shall be deemed to be a contribution by the applicable Owner to HoldCo with an immediately subsequent contribution in an identical amount from HoldCo to the Company.