Noncontributing Members. (a) If any Member shall fail to timely make, or notifies the other Member that it shall not make, all or any portion of any additional Capital Contribution which such Member is obligated to make under Section 3.01 to fully fund its Remaining Capital Commitment, then such Member shall be deemed to be a “Non-Contributing Member.” A Member that is not (i) a Defaulting Member or (ii) a Non-Contributing Member (a “Contributing Member”), shall be entitled, but not obligated, to loan to the Non-Contributing Member, by contributing to the Company on its behalf, all or any part of the amount (the “Default Amount”) that the Non-Contributing Member failed to contribute to the Company (each such loan, a “Default Loan”); provided, that such Contributing Member shall have contributed to the Company its pro rata share of the applicable required additional Capital Contribution. Such Default Loan shall be treated as an additional Capital Contribution by the Non-Contributing Member. Each Default Loan shall bear interest (compounded monthly on the first day of each calendar month) on the unpaid principal amount thereof from time to time remaining from the date advanced until repaid, at the lesser of (i) six percent (6%) per annum and (ii) the maximum rate permitted at law (the “Default Rate”). Each Default Loan shall be recourse solely to the Non-Contributing Member’s Membership Interest. Default Loans shall be repaid out of the distributions that would otherwise be made to the Non-Contributing Member under Section 6.01, Section 6.02 or ARTICLE XII, as more fully provided for in Section 3.02(c). So long as a Default Loan is outstanding, the Non-Contributing Member shall have the right to repay it (together with interest then due and owing) in whole or in part. Upon a repayment in full of a Default Loan made to a Non-Contributing Member (prior to its conversion pursuant to a Cram-Down Contribution in accordance with Section 3.02(b)), such Non-Contributing Member (so long as it is not otherwise a Non-Contributing Member with respect to any other additional Capital Contributions) shall cease to be a Non-Contributing Member. (b) At any time after the date six (6) months after a Default Loan is made, at the option of the Contributing Member, (i) such Default Loan shall (if not previously paid in full) be converted into an additional Capital Contribution of the Contributing Member in an amount equal to the unpaid principal and unpaid interest on such Default Loan pursuant to this Section 3.02(b), (ii) the Non-Contributing Member shall be deemed to have received a distribution, pursuant to Section 6.01, of an amount equal to the unpaid principal and interest on such Default Loan, (iii) such distribution shall be deemed paid to the Contributing Member in repayment of the Default Loan, (iv) such amount shall be deemed contributed by the Contributing Member as an additional Capital Contribution (a “Cram-Down Contribution”) and (v) the Contributing Member’s Capital Account shall be increased by, and the Non-Contributing Member’s Capital Account shall be decreased by, an amount equal to the unpaid principal and interest on such Default Loan. A Cram-Down Contribution shall be deemed an additional Capital Contribution by the Contributing Member making (or deemed making) such Cram-Down Contribution as of the date such Cram-Down Contribution is made or the date on which such Default Loan is converted to a Cram-Down Contribution. At the time of a Cram-Down Contribution, the Percentage Interest of the Contributing Member shall be increased proportionally by the amount of such contribution, thereby diluting the Percentage Interest of the Non-Contributing Member, and the JOC shall update Schedule A hereto accordingly without the need for any consent or approval by the Members. Once a Cram-Down Contribution has been made (or deemed made), (x) no subsequent payment or tender in respect of the Cram-Down Contribution shall affect the Membership Interests of the Members, as adjusted in accordance with this Section 3.02(b) and (y) the Non-Contributing Member as to which the Cram-Down Contribution is made (or deemed made) shall (so long as it is not otherwise a Non-Contributing Member with respect to any other additional Capital Contributions) cease to be a Non-Contributing Member. (c) Notwithstanding any other provisions of this Agreement, any amount that otherwise would be paid or distributed to a Non-Contributing Member pursuant to Section 6.01 or Section 6.02 shall not be paid to the Non-Contributing Member but shall be deemed paid and applied on behalf of such Non-Contributing Member (i) first, to accrued and unpaid interest on all Default Loans (in the order of their original maturity date), (ii) second, to the principal amount of such Default Loans (in the order of their original maturity date) and (iii) third, to any additional Capital Contribution of such Non-Contributing Member that has not been paid and is not deemed to have been paid. (d) Notwithstanding the foregoing, if a Non-Contributing Member fails to fund its Remaining Capital Commitment in accordance with Section 3.01, without limitation of any other available rights or remedies that may be available, the Contributing Member may: (i) institute proceedings against the Non-Contributing Member, either in the Contributing Member’s own name or on behalf of the Company, to obtain payment of the Non-Contributing Member’s portion of its Remaining Capital Commitment identified in the Funding Notice, together with interest thereon at the Default Rate from the date that such Capital Contribution was due until the date that such Remaining Capital Contribution is made, at the cost and expense of the Non-Contributing Member; or (ii) purchase the Membership Interest of the Non-Contributing Member at a price equal to eighty-five percent (85%) of the lesser of (i) the price paid by the Non-Contributing Member for its Membership Interest and (ii) the Fair Market Value of its Membership Interest. (e) Each Member acknowledges and agrees that it would be impracticable or extremely difficult to determine the actual damages incurred by a Contributing Member as a result of a failure of a Member to fund its Remaining Capital Commitment, and that the entitlement of a Contributing Member to exercise the remedies described in this Section 3.02 is fair and reasonable and that such entitlement represents a reasonable estimate of fair compensation for the losses that may reasonably be anticipated by such failure. (f) Except as set forth in this Section 3.02 or Section 3.07, neither Member shall be required to make additional Capital Contributions or make loans to the Company in excess of its original Capital Commitment.
Appears in 1 contract
Noncontributing Members.
(a) The Managing Member, on behalf of the Fund shall be entitled to enforce the obligations of each Member to make the contributions of capital set forth in paragraph 4.2 and any other payments required to be made to the Fund under this Agreement, and the Managing Member shall have all remedies available at law or in equity in the event any such contribution or payment is not so made. If any legal proceedings relating to the failure of a Member to make such contribution or payment are commenced, the Fund shall be entitled to reimbursement from the defaulting Member of all costs and expenses incurred, including attorneys’ fees and expenses, in connection with such proceedings. The Managing Member shall not seek any remedy under this paragraph 4.5 (other than as set forth in paragraph 4.5(b)(i) or (ii)) unless the default continues for at least 10 days after notice by the Managing Member to the defaulting Member of the default.
(b) Additionally, without in any way limiting any remedy which the Fund may pursue pursuant to paragraph 4.5(a), should any Member fail to timely makemake any of the capital contributions or other payments required under this Agreement, such Member shall be in default, and the Managing Member may, in its sole and absolute discretion, elect to enforce one or more of the provisions of this paragraph 4.5(b), to which each Member hereby expressly consents, by providing notice of such election to such defaulting Member.
(i) The Managing Member may borrow, or notifies cause the Fund to borrow, the due and unpaid amount for or on behalf of the defaulting Member, in which case the interest and all other expenses incurred in connection with such borrowing shall be paid by the defaulting Member (or if borne by the Fund, shall be specifically allocated to increase the Capital Accounts other than the Capital Account of the defaulting Member and such amounts shall offset distributions which would otherwise be made to such defaulting Member pursuant to Article 7 or Article 10).
(ii) The Managing Member may offer to any non-defaulting Member the right to make a disproportionate voluntary capital contribution in order to enable the Fund to make any investment for which the defaulting Member’s contribution was required. Upon such additional contributions, the Managing Member shall equitably allocate any Profit or Loss to take into account that it the Members have not contributed capital proportionately with respect to each investment made by the Fund.
(iii) The Managing Member may require such defaulting Member to pay interest on the amount of the contribution or other payment to the Fund then due at an interest rate per annum equal to an IRR of 18% (or if less, the maximum rate permitted by applicable law), such interest to accrue from the date the contribution or payment to the Fund was required to be made pursuant to this Agreement until the date the contribution or payment is made. The accrued interest shall be paid by such defaulting Member to the Fund upon payment of such contribution or payment. The accrued interest so paid shall not make, all or any portion be treated as an additional contribution to the capital of any additional Capital Contribution which such Member is obligated to make under Section 3.01 to fully fund its Remaining Capital Commitment, then such Member the Fund but shall be deemed to be income of the Fund.
(iv) Until such time as the unpaid contribution or payment and accrued interest thereon shall have been paid, the Managing Member may elect to withhold any or all distributions to be made to such defaulting Member pursuant to Article 7 or Article 10 and recover any such unpaid contribution or payment and accrued interest thereon by setoff against any such distributions so withheld.
(v) The Managing Member may deny the defaulting Member the right to participate in any vote or consent of the Members required under this Agreement or permitted under the Act, whereupon the Fund Percentage of such defaulting Member shall not be included for purposes of calculating a “NonMajority or other Percentage-Contributing in-Interest of the Members for purposes of this Agreement.
(vi) The Managing Member may prohibit the defaulting Member from paying additional installments of such Member’s Capital Commitment, other than installments to fund Management Fees and other expenses of the Fund.” A
(vii) The Managing Member may terminate the defaulting Member’s right to receive further allocations and distributions from the Fund pursuant to Article 5, Article 7, and Article 10, provided, however, that is not (i) a Defaulting such defaulting Member or (ii) a Non-Contributing Member (a “Contributing Member”)shall, shall be entitled, but not obligated, to loan subject to the Non-Contributing Act, be entitled to receive as a distribution from the Fund (in such defaulting Member’s capacity as a Member and not as a creditor of the Fund) promptly after dissolution of the Fund, by contributing to the Company on its behalfwithout interest, all or any part of the amount (the “Default Withdrawal Amount”) that the Non-Contributing Member failed equal to contribute to the Company (each such loan, a “Default Loan”); provided, that such Contributing Member shall have contributed to the Company its pro rata share of the applicable required additional Capital Contribution. Such Default Loan shall be treated as an additional Capital Contribution by the Non-Contributing Member. Each Default Loan shall bear interest (compounded monthly on the first day of each calendar month) on the unpaid principal amount thereof from time to time remaining from the date advanced until repaid, at the lesser of (i) six percent (6%) per annum and (ii) the maximum rate permitted at law (the “Default Rate”). Each Default Loan shall be recourse solely to the Non-Contributing Member’s Membership Interest. Default Loans shall be repaid out of the distributions that would otherwise be made to the Non-Contributing Member under Section 6.01, Section 6.02 or ARTICLE XII, as more fully provided for in Section 3.02(c). So long as a Default Loan is outstanding, the Non-Contributing Member shall have the right to repay it (together with interest then due and owing) in whole or in part. Upon a repayment in full of a Default Loan made to a Non-Contributing Member (prior to its conversion pursuant to a Cram-Down Contribution in accordance with Section 3.02(b)), such Non-Contributing Member (so long as it is not otherwise a Non-Contributing Member with respect to any other additional Capital Contributions) shall cease to be a Non-Contributing Member.
(b) At any time after the date six (6) months after a Default Loan is made, at the option of the Contributing Member, (iA) such Default Loan shall (if not previously paid in full) be converted into an additional Capital Contribution of the Contributing Member in an amount equal to the unpaid principal and unpaid interest on such Default Loan pursuant to this Section 3.02(b), (ii) the Non-Contributing Member shall be deemed to have received a distribution, pursuant to Section 6.01, of an amount equal to the unpaid principal and interest on such Default Loan, (iii) such distribution shall be deemed paid to the Contributing Member in repayment of the Default Loan, (iv) such amount shall be deemed contributed by the Contributing Member as an additional Capital Contribution (a “Cram-Down Contribution”) and (v) the Contributing defaulting Member’s Capital Account shall be increased by, and balance calculated as of the Non-Contributing due date of the additional contribution as if the Fund were in liquidation or (B) the aggregate amount of such defaulting Member’s Capital Account shall be decreased bycapital contributions actually made less distributions (valued at their fair market value on the date of distribution) on or prior to such due date, an but in no event less than $0.00.
(viii) The Managing Member may require the defaulting Member to sell (and each defaulting Member hereby agrees to sell) such Member’s interest in the Fund to such Persons designated by the Managing Member (which may include the Managing Member or its Affiliates) who agree to pay the due and unpaid amount of such defaulted contribution and to assume the defaulting Member’s other obligations under this Agreement at a purchase price equal to the unpaid principal and fraction of the defaulting Member’s interest on acquired by such Default Loan. A Cram-Down Contribution shall be deemed an additional Capital Contribution purchaser multiplied by the Contributing Withdrawal Amount, such price payable by a noninterest bearing nonrecourse promissory note (in such form as the Managing Member making (or deemed makingshall designate) such Cram-Down Contribution as due 60 days following the final liquidation of the date such Cram-Down Contribution is made or Fund. Notwithstanding the date on which such Default Loan is converted to a Cram-Down Contribution. At the time sale of a Cram-Down Contribution, the Percentage Interest any portion of the Contributing defaulting Member’s interest, such defaulting Member shall not be increased proportionally released from its Remaining Commitment except as actually funded by the amount acquirer of any such contribution, thereby diluting the Percentage Interest portion of the Non-Contributing defaulting Member, and the JOC shall update Schedule A hereto accordingly without the need for any consent or approval by the Members. Once a Cram-Down Contribution has been made (or deemed made), (x) no subsequent payment or tender in respect of the Cram-Down Contribution shall affect the Membership Interests of the Members, as adjusted in accordance with this Section 3.02(b) and (y) the Non-Contributing Member as to which the Cram-Down Contribution is made (or deemed made) shall (so long as it is not otherwise a Non-Contributing Member with respect to any other additional Capital Contributions) cease to be a Non-Contributing Member’s interest.
(c) Notwithstanding any other provisions provision of this Agreement, any amount that otherwise would be paid or distributed if at least three business days prior to a Non-Contributing date on which any unpaid capital contribution is payable hereunder, any ERISA Member pursuant to Section 6.01 or Section 6.02 shall not be paid delivers to the Non-Contributing Managing Member but shall be deemed paid and applied on behalf an opinion of legal counsel, which opinion is reasonably acceptable to the Managing Member, to the effect that the making of one or more investments by the Fund with the proceeds of such Non-Contributing unpaid capital contribution will result, or there is a material likelihood that the same will result, in a violation of ERISA or in the fiduciaries of such ERISA Member being deemed under ERISA to have delegated investment discretion over Plan Assets to any Person which is not an “investment manager” (as determined by or under ▇▇▇▇▇), then (i) first, to accrued and unpaid interest on all Default Loans (in the order of their original maturity date), (ii) second, to the principal amount of such Default Loans (in the order of their original maturity date) and (iii) third, to any additional Capital Contribution of such Non-Contributing Member that has not been paid and is not deemed to have been paid.
(d) Notwithstanding the foregoing, if a Non-Contributing Member fails to fund its Remaining Capital Commitment in accordance with Section 3.01, without limitation of any other available rights or remedies that may be available, the Contributing Member may:
(i) institute proceedings against the Non-Contributing Member, either in the Contributing Member’s own name or on behalf of the Company, to obtain payment of the Non-Contributing Member’s portion of its Remaining Capital Commitment identified in the Funding Notice, together with interest thereon at the Default Rate from the date that such Capital Contribution was due until the date that such Remaining Capital Contribution is made, at the cost and expense of the Non-Contributing Member; or
(ii) purchase the Membership Interest of the Non-Contributing Member at a price equal to eighty-five percent (85%) of the lesser of (i) the price paid by the Non-Contributing Member for its Membership Interest and (ii) the Fair Market Value of its Membership Interest.
(e) Each Member acknowledges and agrees that it would be impracticable or extremely difficult to determine the actual damages incurred by a Contributing Member as a result of a failure of a Member to fund its Remaining Capital Commitment, and that the entitlement of a Contributing Member to exercise the remedies described in this Section 3.02 is fair and reasonable and that such entitlement represents a reasonable estimate of fair compensation for the losses that may reasonably be anticipated by such failure.
(f) Except as set forth in this Section 3.02 or Section 3.07, neither ERISA Member shall be required released from any further obligation to make additional Capital Contributions or make loans the portion of the capital contribution to be used for the Company in excess of its original Capital Commitment.investment giving rise to such violation,
Appears in 1 contract
Sources: Limited Liability Company Agreement
Noncontributing Members.
(a) The Managing Member, on behalf of the Fund shall be entitled to enforce the obligations of each Member to make the contributions of capital set forth in paragraph 4.2 and any other payments required to be made to the Fund under this Agreement, and the Managing Member shall have all remedies available at law or in equity in the event any such contribution or payment is not so made. If any legal proceedings relating to the failure of a Member to make such contribution or payment are commenced, the Fund shall be entitled to reimbursement from the defaulting Member of all costs and expenses incurred, including attorneys’ fees and expenses, in connection with such proceedings. The Managing Member shall not seek any remedy under this paragraph 4.5 (other than as set forth in paragraph 4.5(b)(i) or (ii)) unless the default continues for at least 10 days after notice by the Managing Member to the defaulting Member of the default.
(b) Additionally, without in any way limiting any remedy which the Fund may pursue pursuant to paragraph 4.5(a), should any Member fail to timely makemake any of the capital contributions or other payments required under this Agreement, such Member shall be in default, and the Managing Member may, in its sole and absolute discretion, elect to enforce one or more of the provisions of this paragraph 4.5(b), to which each Member hereby expressly consents, by providing notice of such election to such defaulting Member.
(i) The Managing Member may borrow, or notifies cause the Fund to borrow, the due and unpaid amount for or on behalf of the defaulting Member, in which case the interest and all other expenses incurred in connection with such borrowing shall be paid by the defaulting Member (or if borne by the Fund, shall be specifically allocated to increase the Capital Accounts other than the Capital Account of the defaulting Member and such amounts shall offset distributions which would otherwise be made to such defaulting Member pursuant to Article 7 or Article 10).
(ii) The Managing Member may offer to any non-defaulting Member the right to make a disproportionate voluntary capital contribution in order to enable the Fund to make any investment for which the defaulting Member’s contribution was required. Upon such additional contributions, the Managing Member shall equitably allocate any Profit or Loss to take into account that it the Members have not contributed capital proportionately with respect to each investment made by the Fund.
(iii) The Managing Member may require such defaulting Member to pay interest on the amount of the contribution or other payment to the Fund then due at an interest rate per annum equal to an IRR of 18% (or if less, the maximum rate permitted by applicable law), such interest to accrue from the date the contribution or payment to the Fund was required to be made pursuant to this Agreement until the date the contribution or payment is made. The accrued interest shall be paid by such defaulting Member to the Fund upon payment of such contribution or payment. The accrued interest so paid shall not make, all or any portion be treated as an additional contribution to the capital of any additional Capital Contribution which such Member is obligated to make under Section 3.01 to fully fund its Remaining Capital Commitment, then such Member the Fund but shall be deemed to be income of the Fund.
(iv) Until such time as the unpaid contribution or payment and accrued interest thereon shall have been paid, the Managing Member may elect to withhold any or all distributions to be made to such defaulting Member pursuant to Article 7 or Article 10 and recover any such unpaid contribution or payment and accrued interest thereon by setoff against any such distributions so withheld.
(v) The Managing Member may deny the defaulting Member the right to participate in any vote or consent of the Members required under this Agreement or permitted under the Act, whereupon the Fund Percentage of such defaulting Member shall not be included for purposes of calculating a “NonMajority or other Percentage-Contributing in-Interest of the Members for purposes of this Agreement.
(vi) The Managing Member may prohibit the defaulting Member from paying additional installments of such Member’s Capital Commitment, other than installments to fund Management Fees and other expenses of the Fund.” A
(vii) The Managing Member may terminate the defaulting Member’s right to receive further allocations and distributions from the Fund pursuant to Article 5, Article 7, and Article 10, provided, however, that is not (i) a Defaulting such defaulting Member or (ii) a Non-Contributing Member (a “Contributing Member”)shall, shall be entitled, but not obligated, to loan subject to the Non-Contributing Act, be entitled to receive as a distribution from the Fund (in such defaulting Member’s capacity as a Member and not as a creditor of the Fund) promptly after dissolution of the Fund, by contributing to the Company on its behalfwithout interest, all or any part of the amount (the “Default Withdrawal Amount”) that the Non-Contributing Member failed equal to contribute to the Company (each such loan, a “Default Loan”); provided, that such Contributing Member shall have contributed to the Company its pro rata share of the applicable required additional Capital Contribution. Such Default Loan shall be treated as an additional Capital Contribution by the Non-Contributing Member. Each Default Loan shall bear interest (compounded monthly on the first day of each calendar month) on the unpaid principal amount thereof from time to time remaining from the date advanced until repaid, at the lesser of (i) six percent (6%) per annum and (ii) the maximum rate permitted at law (the “Default Rate”). Each Default Loan shall be recourse solely to the Non-Contributing Member’s Membership Interest. Default Loans shall be repaid out of the distributions that would otherwise be made to the Non-Contributing Member under Section 6.01, Section 6.02 or ARTICLE XII, as more fully provided for in Section 3.02(c). So long as a Default Loan is outstanding, the Non-Contributing Member shall have the right to repay it (together with interest then due and owing) in whole or in part. Upon a repayment in full of a Default Loan made to a Non-Contributing Member (prior to its conversion pursuant to a Cram-Down Contribution in accordance with Section 3.02(b)), such Non-Contributing Member (so long as it is not otherwise a Non-Contributing Member with respect to any other additional Capital Contributions) shall cease to be a Non-Contributing Member.
(b) At any time after the date six (6) months after a Default Loan is made, at the option of the Contributing Member, (iA) such Default Loan shall (if not previously paid in full) be converted into an additional Capital Contribution of the Contributing Member in an amount equal to the unpaid principal and unpaid interest on such Default Loan pursuant to this Section 3.02(b), (ii) the Non-Contributing Member shall be deemed to have received a distribution, pursuant to Section 6.01, of an amount equal to the unpaid principal and interest on such Default Loan, (iii) such distribution shall be deemed paid to the Contributing Member in repayment of the Default Loan, (iv) such amount shall be deemed contributed by the Contributing Member as an additional Capital Contribution (a “Cram-Down Contribution”) and (v) the Contributing defaulting Member’s Capital Account shall be increased by, and balance calculated as of the Non-Contributing due date of the additional contribution as if the Fund were in liquidation or (B) the aggregate amount of such defaulting Member’s Capital Account shall be decreased bycapital contributions actually made less distributions (valued at their fair market value on the date of distribution) on or prior to such due date, an but in no event less than $0.00.
(viii) The Managing Member may require the defaulting Member to sell (and each defaulting Member hereby agrees to sell) such Member’s interest in the Fund to such Persons designated by the Managing Member (which may include the Managing Member or its Affiliates) who agree to pay the due and unpaid amount of such defaulted contribution and to assume the defaulting Member’s other obligations under this Agreement at a purchase price equal to the unpaid principal and fraction of the defaulting Member’s interest on acquired by such Default Loan. A Cram-Down Contribution shall be deemed an additional Capital Contribution purchaser multiplied by the Contributing Withdrawal Amount, such price payable by a noninterest bearing nonrecourse promissory note (in such form as the Managing Member making (or deemed makingshall designate) such Cram-Down Contribution as due 60 days following the final liquidation of the date such Cram-Down Contribution is made or Fund. Notwithstanding the date on which such Default Loan is converted to a Cram-Down Contribution. At the time sale of a Cram-Down Contribution, the Percentage Interest any portion of the Contributing defaulting Member’s interest, such defaulting Member shall not be increased proportionally released from its Remaining Commitment except as actually funded by the amount acquirer of any such contribution, thereby diluting the Percentage Interest portion of the Non-Contributing defaulting Member, and the JOC shall update Schedule A hereto accordingly without the need for any consent or approval by the Members. Once a Cram-Down Contribution has been made (or deemed made), (x) no subsequent payment or tender in respect of the Cram-Down Contribution shall affect the Membership Interests of the Members, as adjusted in accordance with this Section 3.02(b) and (y) the Non-Contributing Member as to which the Cram-Down Contribution is made (or deemed made) shall (so long as it is not otherwise a Non-Contributing Member with respect to any other additional Capital Contributions) cease to be a Non-Contributing Member’s interest.
(c) Notwithstanding any other provisions provision of this Agreement, any amount that otherwise would be paid or distributed if at least three business days prior to a Non-Contributing date on which any unpaid capital contribution is payable hereunder, any ERISA Member pursuant delivers to Section 6.01 the Managing Member an opinion of legal counsel, which opinion is reasonably acceptable to the Managing Member, to the effect that the making of one or Section 6.02 more investments by the Fund with the proceeds of such unpaid capital contribution will result, or there is a material likelihood that the same will result, in a violation of ERISA or in the fiduciaries of such ERISA Member being deemed under ERISA to have delegated investment discretion over Plan Assets to any Person which is not an “investment manager” (as determined by or under ERISA), then (i) such ERISA Member shall be released from any further obligation to make the portion of the capital contribution to be used for the investment giving rise to such violation,
(ii) such ERISA Member shall not be paid deemed to the Non-Contributing Member but have an indirect ownership interest in any investment giving rise to such violation and no Profit or Loss shall be deemed paid allocated to such ERISA Member with respect to any such investment and applied on behalf of all such Non-Contributing Profit or Loss that would have been allocated to such ERISA Member shall be allocated to all other Members (iincluding the Managing Member) firstin proportion to their respective Fund Percentages, to accrued and unpaid interest on all Default Loans (in the order of their original maturity date), (ii) second, to the principal amount of such Default Loans (in the order of their original maturity date) and (iii) third, to any additional the Capital Contribution Commitment and Remaining Commitment of such Non-Contributing ERISA Member shall either, as determined by the Managing Member in its sole and absolute discretion, (A) be reduced, effective as of the date of delivery of such notice, by an amount equal to the portion of the capital contribution of such ERISA Member not being made in accordance with this paragraph 4.5(c), or (B) remain unchanged, and such ERISA Member’s proportional interest in investments made with the proceeds of future capital contributions shall increase accordingly, and the Managing Member shall equitably allocate any Profit and Loss to take into account that has the Members have not been paid contributed capital proportionately with respect to each investment made by the Fund. The Managing Member shall cause the Fund’s books and is not deemed records to have been paidbe amended to reflect all necessary changes resulting from this paragraph 4.5(c) including adjustments to such ERISA Member’s Capital Commitment and Fund Percentage.
(d) Notwithstanding the foregoing, if a Non-Contributing Member fails Following any release pursuant to fund its Remaining Capital Commitment in accordance with Section 3.01, without limitation paragraph 4.5(c) above of any other available rights or remedies that may be available, ERISA Member from the Contributing Member may:
(i) institute proceedings against obligation to contribute the Non-Contributing Member, either in the Contributing Member’s own name or on behalf of the Company, to obtain payment of the Non-Contributing Member’s portion entire amount of its Remaining Capital Commitment identified in the Funding Notice, together with interest thereon at the Default Rate from the date that such Capital Contribution was due until the date that such Remaining Capital Contribution is made, at the cost and expense of the Non-Contributing Member; or
(ii) purchase the Membership Interest of the Non-Contributing Member at a price equal to eighty-five percent (85%) of the lesser of (i) the price paid by the Non-Contributing Member for its Membership Interest and (ii) the Fair Market Value of its Membership Interest.
(e) Each Member acknowledges and agrees that it would be impracticable or extremely difficult to determine the actual damages incurred by a Contributing Member as a result of a failure of a Member to fund its Remaining original Capital Commitment, the Managing Member may, in its sole and absolute discretion, provide notice to any or all Members that additional Capital Commitments to the entitlement Fund may be requested on account of a Contributing Member to exercise the remedies described in this Section 3.02 is fair and reasonable and that such entitlement represents a reasonable estimate of fair compensation for the losses that may reasonably be anticipated by such failure.
(f) Except as set forth in this Section 3.02 or Section 3.07, neither shortfall. No Member shall be required to make any additional Capital Contributions or make loans Commitment as a result of such notice. If any Member makes, in its sole and absolute discretion, any additional Capital Commitment to the Company Fund as a result of such notice, the Managing Member shall cause the Fund’s books and records to be amended to reflect all necessary changes resulting from such contribution, including adjustments to any such contributing Member’s Capital Commitment and Fund Percentage, and Profit or Loss shall be equitably allocated by the Managing Member to take into account that the Members have not contributed capital proportionately with respect to each investment made by the Fund. If Members elect to make additional Capital Commitments in excess of its original Capital Commitmentthe foregoing shortfall, the Managing Member shall reduce the election of any one or more Members in a corresponding amount (in such relative amounts as among electing Members as the Managing Member determines in good faith).
Appears in 1 contract
Sources: Limited Liability Company Agreement