Common use of Default by Member Clause in Contracts

Default by Member. 3.4.1 The Members agree that prompt payment of a Drawdown and of any amounts required to be paid by the Members under Sections 4.7, 6.10, and 8.3 or otherwise under this Agreement is of the essence, that failure of any Member to make such payment will cause irreparable harm to the Company and the other Members, and that the amount of damages caused by such harm will be difficult to calculate. The Members acknowledge that failure by a Member promptly to pay a Drawdown (including in connection with a recall of distributions or to satisfy an indemnification obligation) may require non-defaulting Members to contribute additional capital (not to exceed their then Undrawn Commitment) to satisfy such shortfall, may result in the Company’s default in respect of its obligations, and may reduce the number of Portfolio Assets that the Company may acquire, each of which may affect the financial stability of the Company. Accordingly, the Members agree that, except as otherwise provided in Section 9.2, if a Member shall fail to fund a Drawdown or other required payment to the Company under this Agreement when due within 10 calendar days of the due date set forth in the Drawdown Notice or other applicable notice, or fails to comply with any term or condition set forth in this Agreement, the Member’s Subscription Agreement, or any other agreement related to a Member’s interest in the Company, such Member shall be in default; provided, that the Company, in its discretion, may extend the time period before a default occurs. A defaulting Member shall not be entitled to vote on any matter upon which the Members are entitled to vote hereunder, and the Default Interest in the Company will not be included in calculating the Company interests of the Members entitled to vote on or required to take any action under this Agreement. Upon any such default, the Company, in its discretion, may undertake any one or more of the options listed below in this Section 3.4. 3.4.2 Upon any such default, the Managing Member will have the option, but not the obligation, to undertake any one or more of the following options in any particular order or differently with respect to each defaulting Member, subject to applicable law: (i) to cause the Company to acquire all or part of the interest of the defaulting Member in the Company (the “Default Interest”); (ii) assign the Company’s right to acquire all or part of the Default Interest to its Affiliate; or (iii) sell all or part of the Default Interest to third parties (including any non-defaulting Member), including through a sale on a qualified matching service, whether or not such service is administered by Xxxxxxx Sachs, or otherwise; provided that the Managing Member shall have no obligation to offer the Default Interest to any Person. A Transfer of all or part of a Default Interest, pursuant to clauses (i) and (ii) above, generally will be made at a price equal to the lower of: (a) the fair value of the Default Interest as of the date of default (as reasonably determined in good faith by the Managing Member) and (ii) the book value of the Default Interest (as reasonably determined by the Managing Member in accordance with generally accepted accounting principles) as of the end of the fiscal year immediately preceding the fiscal year in which the default is declared and adjusted for contributions from the defaulting Member and distributions, if any, to the defaulting Member since the end of the fiscal year as of which these values are determined (the “Default Price”); provided that the Managing Member may transfer the Default Interest under clauses (i) and (ii) at a price less than the Default Price with the consent of the defaulting Member (the Default Price or such lesser amount, the “Default Interest Purchase Price”). A transfer of a Default Interest under the circumstances described in clause (iii) of this paragraph generally may be made at (and, for purposes of a transfer of Default Interest under the circumstances described in clause (iii) of this paragraph, the “Default Interest Purchase Price” will be deemed to be) any price offered by any such third party, including at a price that is a significant discount to the book value of the Default Interest, and in some cases, solely in exchange for such third party’s assumption of the defaulting member’s Undrawn Commitment. Any Person acquiring all or part of the Default Interest shall be required to assume the obligation of the defaulting Member to contribute to the Company the appropriate portion of past due Drawdowns (and any amounts past due in respect of any other required payment) and future Capital Contributions related to the Default Interest or other required payments. Within 30 days of the payment of the Default Interest Purchase Price (or portion thereof if the entire Default Interest is not acquired) to the Company, the defaulting Member will receive an amount equal to 50% of the Default Interest Purchase Price (or portion thereof). The remainder of the Default Interest Purchase Price (or portion thereof) will be retained by the Company. The Person(s) acquiring all or a portion of the Default Interest shall succeed to all economic attributes associated with the portion of the Default Interest acquired, including a proportionate share of the Capital Account balance, any unreturned Contributed Capital, and the entire remaining Undrawn Commitment. In addition, the 50% of the Default Interest Purchase Price retained by the Company shall be treated as an item of income solely for purposes of computing the Members’ respective Capital Account balances and shall be treated as an amount of proceeds realized from a Portfolio Asset. 3.4.3 The Managing Member may in its discretion, but is not required to, arrange for a full recourse loan with an expected maturity of 60 days or less, or such longer period in the discretion of the Managing Member (a “Member Loan”), to any Member who fails to make a timely Capital Contribution or other required payment to the Company, and the proceeds of such Member Loan will be used to make such contribution or payment. A Member Loan may be secured by the Member’s interest in the Company and the Managing Member’s right to issue future Drawdown Notices to such Member, in each case at the discretion of the Managing Member. The lender shall have full recourse to the Member, and the terms of any Member Loan, including the interest rate, shall be commercially reasonable as determined by the Managing Member in its discretion. Each Member hereby irrevocably appoints the Managing Member as its attorney-in-fact to arrange such Member Loans, and to execute and deliver on behalf of such Member all documents or other instruments related thereto, without prior notice to such Member. Such appointment and power of attorney is coupled with and is intended to secure an interest in property and the obligations of the relevant Member hereunder, is irrevocable, shall survive the Transfer of the Member’s interest in the Company and shall survive and shall not be affected by, the subsequent death, disability, incapacity, incompetency, termination, bankruptcy, insolvency or dissolution of the Member, but shall be limited to the term of the Company determined in accordance with this Agreement. Any Member on behalf of which a Member Loan is made shall remain liable to pay the remainder of its Capital Commitment in the amounts and on the terms specified in this Agreement, in addition to payment of any amounts owing in respect of any Member Loan. To the extent permitted by applicable law, Xxxxxxx Xxxxx may, but is not required to, make any such Member Loan. Member Loans will not be made or arranged for any Member to the extent such Member Loans would be prohibited by applicable law, including limitations under the Sarbanes Oxley Act of 2002 or the Xxxx-Xxxxx Act, nor will such loans be made or arranged for Members that are subject to the prohibited transaction rules of ERISA or the Code or for governmental plans that are subject to similar laws, rules or regulations. A Member Loan will not alter the defaulting Member’s other obligations to the Company, including any obligation to make future Capital Contributions. 3.4.4 The Managing Member may require, in its discretion, that the defaulting Member forfeit, without consideration, to the Company some or all of its interest in the Company (including its interest in future allocations and distributions and some or all of the rights associated with such interest). Subject to applicable law, such forfeiture will not alter such defaulting Member’s obligations to the Company, including any obligation to fund future Capital Contributions or make other required payments and such Member will continue to retain all such obligations. The Capital Account balance (and the Capital Sub-Account balance) associated with the portion of the Default Interest shall be forfeited and allocated to the non-defaulting Members pursuant to this Section 3.4.4 as if it were an item of income. The Managing Member will determine appropriate mechanisms for implementing these provisions, including adjustments to the future distributions to Members to take into account any forfeiture described above. 3.4.5 The Managing Member may allow a defaulting Member to withdraw from the Company upon such terms and conditions as may be established by the Managing Member, which may include, without limitation, the execution of liability releases, payment of legal and administrative expenses and other reasonable fees and the forfeiture of all or a portion of such Member’s Capital Account. 3.4.6 In addition to any obligation described in Section 6.9, in connection with any default, each Member hereby agrees, if it is a defaulting Member, to indemnify the Company, the Managing Member and any of their respective Affiliates for any and all claims, losses, liabilities or damages (including attorneys’ fees and other related out-of-pocket expenses) suffered or incurred by any such Person as a result of the defaulting Member failing to make a required Capital Contribution or otherwise failing to comply with the terms of the Subscription Agreement, and the Managing Member may require the defaulting Member to be responsible for all fees and expenses (unless such requirement is waived by the Managing Member), including attorneys’ fees and sales commissions, incurred as a result of the default. The Company generally will deduct such fees and expenses from net proceeds paid to the defaulting Member, if any. 3.4.7 The remedies provided in this Section 3.4 are in addition to and not in limitation of any other right or remedy of the Company, the Managing Member provided by law, at equity or under this Agreement, the Subscription Agreement, any client account implementation agreement or any related agreements. 3.4.8 The Company may agree with the Parent Company and any other Member that is an investment vehicle that invests all or substantially all of its assets in the Company (an “Investment Fund”) that, if a direct investor in the Parent Company or other Investment Fund fails to make a contribution to the Parent Company or such or Investment Fund, as applicable, and as a result the Parent Company or such other Investment Fund does not make all or a portion of a Capital Contribution or other required payment to the Company, the Company will treat the Parent Company or such other Investment Fund as a defaulting Member, but solely with respect to the portion of the Parent Company’s or such other Investment Fund’s interest in the Company relating to the direct interest in the Parent Company or such other Investment Fund held by the direct investor in the Parent Company or such other Investment Fund that failed to make a contribution to the Parent Company or such other Investment Fund, as applicable. 3.4.9 Notwithstanding any provision of this Section 3.4 to the contrary, in the event that the Special Interest Member is the defaulting Member, the provisions of Sections 3.4.2 and 3.4.4 shall not apply to the Special Interest Member’s right to receive the Incentive Allocation or Promote but only to that portion of its interest attributable to its subscription obligations to the Company and its right to distributions, and allocations of income and loss related thereto. Accordingly, in no event shall any purchaser of a portion of the interest of the Special Interest Member pursuant to Section 3.4.2 become entitled to any Incentive Allocation (or the associated portion of the Special Interest Member’s Capital Account balance), all of which shall be retained by the Special Interest Member, nor shall any such purchaser become obligated to contribute to the Company any amount under Section 10.2.4 in respect of the interest it purchased pursuant to Section 3.4.2. In addition, in no event shall the Special Interest Member be deemed to have forfeited pursuant to Section 3.4.4 the portion of its interest in the Company, which entitles the Special Interest Member to receive Incentive Allocations or Promote (or the associated portion of the Special Interest Member’s Capital Account balance).

Default by Member. 3.4.1 The Members agree that prompt payment of a Drawdown and of any amounts required to be paid by the Members under Sections 4.7, 6.105.4, and 8.3 or otherwise under this Agreement is of the essence, that failure of any Member to make such payment will cause irreparable harm to the Company and the other Members, and that the amount of damages caused by such harm will be difficult to calculate. The Members acknowledge that failure by a Member promptly to pay a Drawdown (including in connection with a recall of distributions or to satisfy an indemnification obligation) may require non-defaulting Members to contribute additional capital (not to exceed their then Undrawn Commitment) to satisfy such shortfall, may result in the Company’s or the Operating Company’s default in respect of its obligations, and may reduce the number of Portfolio Assets that Company (through the Company Operating Company) may acquire, each of which may affect the financial stability of the Company. Accordingly, the Members agree that, except as otherwise provided in Section 9.2, if a Member shall fail to fund a Drawdown or other required payment to the Company under this Agreement when due within 10 15 calendar days of the due date set forth in the Drawdown Notice or other applicable notice, or fails to comply with any term or condition set forth in this Agreement, the Member’s Subscription Agreement, or any other agreement related to a Member’s interest in the Company, such Member shall be in default; provided, that the Company, in its discretion, may extend the time period before a default occurs. A defaulting Member shall not be entitled to vote on any matter upon which the Members are entitled to vote hereunder, and the Default Interest in the Company will not be included in calculating the Company interests of the Members entitled to vote on or required to take any action under this Agreement. Upon any such default, the Company, in its discretion, may undertake any one or more of the options listed below in this Section 3.4. 3.4.2 Upon any such default, the Managing Member Board of Directors will have the option, but not the obligation, to undertake any one or more of the following options in any particular order or differently with respect to each defaulting Member, subject to applicable law: (i) to cause the Company to acquire all or part of the interest of the defaulting Member in the Company (the “Default Interest”); (ii) assign the Company’s right to acquire all or part of the Default Interest to its Affiliate; or (iii) sell all or part of the Default Interest to third parties (including any non-defaulting Member), including through a sale on a qualified matching service, whether or not such service is administered by Xxxxxxx Sachs, or otherwise; provided that the Managing Member Board of Directors shall have no obligation to offer the Default Interest to any Person. A Transfer of all or part of a Default Interest, pursuant to clauses (i) and (ii) above, generally will be made at a price equal to the lower of: (a) the fair value of the Default Interest as of the date of default (as reasonably determined in good faith by the Managing MemberBoard of Directors) and (iib) the book value of the Default Interest (as reasonably determined by the Managing Member Board of Directors in accordance with generally accepted accounting principles) as of the end of the fiscal year immediately preceding the fiscal year in which the default is declared and adjusted for contributions from the defaulting Member and distributions, if any, to the defaulting Member since the end of the fiscal year as of which these values are determined (the “Default Price”); provided that the Managing Member Board of Directors may transfer the Default Interest under clauses (i) and (ii) at a price less than the Default Price with the consent of the defaulting Member (the Default Price or such lesser amount, the “Default Interest Purchase Price”). A transfer of a Default Interest under the circumstances described in clause (iii) of this paragraph generally may be made at (and, for purposes of a transfer of Default Interest under the circumstances described in clause (iii) of this paragraph, the “Default Interest Purchase Price” will be deemed to be) any price offered by any such third party, including at a price that is a significant discount to the book value of the Default Interest, and in some cases, solely in exchange for such third party’s assumption of the defaulting member’s Undrawn Commitment. Any Person acquiring all or part of the Default Interest shall be required to assume the obligation of the defaulting Member to contribute to the Company the appropriate portion of past due Drawdowns (and any amounts past due in respect of any other required payment) and future Capital Contributions related to the Default Interest or other required payments. Within 30 days of the payment of the Default Interest Purchase Price (or portion thereof if the entire Default Interest is not acquired) to the Company, the defaulting Member will receive an amount equal to 50% of the Default Interest Purchase Price (or portion thereof). The remainder of the Default Interest Purchase Price (or portion thereof) will be retained by the Company. The Person(s) acquiring all or a portion of the Default Interest shall succeed to all economic attributes associated with the portion of the Default Interest acquired, including a proportionate share of the Capital Account balance, any unreturned Contributed Capital, and the entire remaining Undrawn Commitment. In addition, the 50% of the Default Interest Purchase Price retained by the Company shall be treated as an item of income solely for purposes of computing the Members’ respective Capital Account balances and shall be treated as an amount of proceeds realized from a Portfolio Asset. 3.4.3 The Managing Member Board of Directors may in its discretion, but is not required to, arrange for a full recourse loan with an expected maturity of 60 days or less, or such longer period in the discretion of the Managing Member Board of Directors (a “Member Loan”), to any Member who fails to make a timely Capital Contribution or other required payment to the Company, and the proceeds of such Member Loan will be used to make such contribution or payment. A Member Loan may be secured by the Member’s interest in the Company and the Managing Member’s Board of Directors’ right to issue future Drawdown Notices to such Member, in each case at the discretion of the Managing MemberBoard of Directors. The lender shall have full recourse to the Member, and the terms of any Member Loan, including the interest rate, shall be commercially reasonable as determined by the Managing Member Board of Directors in its discretion. Each Member hereby irrevocably appoints the Managing Member Company as its attorney-in-fact to arrange such Member Loans, and to execute and deliver on behalf of such Member all documents or other instruments related thereto, without prior notice to such Member. Such appointment and power of attorney is coupled with and is intended to secure an interest in property and the obligations of the relevant Member hereunder, is irrevocable, shall survive the Transfer of the Member’s interest in the Company and shall survive and shall not be affected by, the subsequent death, disability, incapacity, incompetency, termination, bankruptcy, insolvency or dissolution of the Member, but shall be limited to the term of the Company determined in accordance with this Agreement. Any Member on behalf of which a Member Loan is made shall remain liable to pay the remainder of its Capital Commitment in the amounts and on the terms specified in this Agreement, in addition to payment of any amounts owing in respect of any Member Loan. To the extent permitted by applicable law, Xxxxxxx Xxxxx may, but is not required to, make any such Member Loan. Member Loans will not be made or arranged for any Member to the extent such Member Loans would be prohibited by applicable law, including limitations under the Sarbanes Oxley Act of 2002 or the Xxxx-Xxxxx Act, nor will such loans be made or arranged for Members that are subject to the prohibited transaction rules of ERISA or the Code or for governmental plans that are subject to similar laws, rules or regulations. A Member Loan will not alter the defaulting Member’s other obligations to the Company, including any obligation to make future Capital Contributions. 3.4.4 The Managing Member Board of Directors may require, in its discretion, that the defaulting Member forfeit, without consideration, to the Company some or all of its interest in the Company (including its interest in future allocations and distributions and some or all of the rights associated with such interest). Subject to applicable law, such forfeiture will not alter such defaulting Member’s obligations to the Company, including any obligation to fund future Capital Contributions or make other required payments and such Member will continue to retain all such obligations. The Capital Account balance (and the Capital Sub-Account balance) associated with the portion of the Default Interest shall be forfeited and allocated to the non-defaulting Members pursuant to this Section 3.4.4 3.4 as if it were an item of income. The Managing Member Board of Directors will determine appropriate mechanisms for implementing these provisions, including adjustments to the future distributions to Members to take into account any forfeiture described above. 3.4.5 The Managing Member Board of Directors may allow a defaulting Member to withdraw from the Company upon such terms and conditions as may be established by the Managing MemberBoard of Directors, which may include, without limitation, the execution of liability releases, payment of legal and administrative expenses and other reasonable fees and the forfeiture of all or a portion of such Member’s Capital Account. 3.4.6 In addition to any obligation described in Section 6.96.11, in connection with any default, each Member hereby agrees, if it is a defaulting Member, to indemnify the Company, the Managing Member Company and any of their respective its Affiliates for any and all claims, losses, liabilities or damages (including attorneys’ fees and other related out-of-pocket expenses) suffered or incurred by any such Person as a result of the defaulting Member failing to make a required Capital Contribution or otherwise failing to comply with the terms of the Subscription Agreement, and the Managing Member Board of Directors may require the defaulting Member to be responsible for all fees and expenses (unless such requirement is waived by the Managing MemberBoard of Directors), including attorneys’ fees and sales commissions, incurred as a result of the default. The Company generally will deduct such fees and expenses from net proceeds paid to the defaulting Member, if any. 3.4.7 The remedies provided in this Section 3.4 are in addition to and not in limitation of any other right or remedy of the Company, Company or the Managing Member Board of Directors provided by law, at equity or under this Agreement, the Subscription Agreement, any client account implementation agreement or any related agreements. 3.4.8 The Company may agree with the Parent Company and any other a Member that is an investment vehicle that invests all or substantially all of its assets in the Company (an “Investment Fund”) that, if a direct investor in the Parent Company or other Investment Fund fails to make a contribution to the Parent Company or such or Investment Fund, as applicable, Fund and as a result the Parent Company or such other Investment Fund does not make all or a portion of a Capital Contribution or other required payment to the Company, the Company will treat the Parent Company or such other Investment Fund as a defaulting Member, but solely with respect to the portion of the Parent Company’s or such other Investment Fund’s interest in the Company relating to the direct interest in the Parent Company or such other Investment Fund held by the direct investor in the Parent Company or such other Investment Fund that failed to make a contribution to the Parent Company or such other Investment Fund, as applicable. 3.4.9 Notwithstanding any provision of this Section 3.4 to the contrary, in the event that the Special Interest Member is the defaulting Member, the provisions of Sections 3.4.2 and 3.4.4 shall not apply to the Special Interest Member’s right to receive the Incentive Allocation or Promote but only to that portion of its interest attributable to its subscription obligations to the Company and its right to distributions, and allocations of income and loss related thereto. Accordingly, in no event shall any purchaser of a portion of the interest of the Special Interest Member pursuant to Section 3.4.2 become entitled to any Incentive Allocation (or the associated portion of the Special Interest Member’s Capital Account balance), all of which shall be retained by the Special Interest Member, nor shall any such purchaser become obligated to contribute to the Company any amount under Section 10.2.4 in respect of the interest it purchased pursuant to Section 3.4.2. In addition, in no event shall the Special Interest Member be deemed to have forfeited pursuant to Section 3.4.4 the portion of its interest in the Company, which entitles the Special Interest Member to receive Incentive Allocations or Promote (or the associated portion of the Special Interest Member’s Capital Account balance).

Default by Member. 3.4.1 The Members agree that prompt payment of a Drawdown and of any amounts required to be paid by the Members under Sections 4.7, 5.5.6, 6.10, and 8.3 or otherwise under this Agreement is of the essence, that failure of any Member to make such payment will cause irreparable harm to the Company and the other Members, and that the amount of damages caused by such harm will be difficult to calculate. The Members acknowledge that failure by a Member promptly to pay a Drawdown (including in connection with a recall of distributions or to satisfy an indemnification obligation) may require non-defaulting Members to contribute additional capital (not to exceed their then Undrawn Commitment) to satisfy such shortfall, may result in the Company’s default in respect of its obligations, and may reduce the number of Portfolio Assets that the Company may acquire, each of which may affect the financial stability of the Company. Accordingly, the Members agree that, except as otherwise provided in Section 9.2, if a Member shall fail to fund a Drawdown or other required payment to the Company under this Agreement when due within 10 calendar days of the due date set forth in the Drawdown Notice or other applicable notice, or fails to comply with any term or condition set forth in this Agreement, the Member’s Subscription Agreement, or any other agreement related to a Member’s interest in the Company, such Member shall be in default; provided, that the Company, in its discretion, may extend the time period before a default occurs. A defaulting Member shall not be entitled to vote on any matter upon which the Members are entitled to vote hereunder, and the Default Interest in the Company will not be included in calculating the Company interests of the Members entitled to vote on or required to take any action under this Agreement. Upon any such default, the Company, in its discretion, may undertake any one or more of the options listed below in this Section 3.4. 3.4.2 Upon any such default, the Managing Member will have the option, but not the obligation, to undertake any one or more of the following options in any particular order or differently with respect to each defaulting Member, subject to applicable law: (i) to cause the Company to acquire all or part of the interest of the defaulting Member in the Company (the “Default Interest”); (ii) assign the Company’s right to acquire all or part of the Default Interest to its Affiliate; or (iii) sell all or part of the Default Interest to third parties (including any non-defaulting Member), including through a sale on a qualified matching service, whether or not such service is administered by Xxxxxxx SachsXxxxx, or otherwise; provided that the Managing Member shall have no obligation to offer the Default Interest to any Person. A Transfer of all or part of a Default Interest, pursuant to clauses (i) and (ii) above, generally will be made at a price equal to the lower of: (a) the fair value of the Default Interest as of the date of default (as reasonably determined in good faith by the Managing Member) and (ii) the book value of the Default Interest (as reasonably determined by the Managing Member in accordance with generally accepted accounting principles) as of the end of the fiscal year immediately preceding the fiscal year in which the default is declared and adjusted for contributions from the defaulting Member and distributions, if any, to the defaulting Member since the end of the fiscal year as of which these values are determined (the “Default Price”); provided that the Managing Member may transfer the Default Interest under clauses (i) and (ii) at a price less than the Default Price with the consent of the defaulting Member (the Default Price or such lesser amount, the “Default Interest Purchase Price”). A transfer of a Default Interest under the circumstances described in clause (iii) of this paragraph generally may be made at (and, for purposes of a transfer of Default Interest under the circumstances described in clause (iii) of this paragraph, the “Default Interest Purchase Price” will be deemed to be) any price offered by any such third party, including at a price that is a significant discount to the book value of the Default Interest, and in some cases, solely in exchange for such third party’s assumption of the defaulting member’s Undrawn Commitment. Any Person acquiring all or part of the Default Interest shall be required to assume the obligation of the defaulting Member to contribute to the Company the appropriate portion of past due Drawdowns (and any amounts past due in respect of any other required payment) and future Capital Contributions related to the Default Interest or other required payments. Within 30 days of the payment of the Default Interest Purchase Price (or portion thereof if the entire Default Interest is not acquired) to the Company, the defaulting Member will receive an amount equal to 50% of the Default Interest Purchase Price (or portion thereof). The remainder of the Default Interest Purchase Price (or portion thereof) will be retained by the Company. The Person(s) acquiring all or a portion of the Default Interest shall succeed to all economic attributes associated with the portion of the Default Interest acquired, including a proportionate share of the Capital Account balance, any unreturned Contributed Capital, and the entire remaining Undrawn Commitment. In addition, the 50% of the Default Interest Purchase Price retained by the Company shall be treated as an item of income solely for purposes of computing the Members’ respective Capital Account balances and shall be treated as an amount of proceeds realized from a Portfolio Asset. 3.4.3 The Managing Member may in its discretion, but is not required to, arrange for a full recourse loan with an expected maturity of 60 days or less, or such longer period in the discretion of the Managing Member (a “Member Loan”), to any Member who fails to make a timely Capital Contribution or other required payment to the Company, and the proceeds of such Member Loan will be used to make such contribution or payment. A Member Loan may be secured by the Member’s interest in the Company and the Managing Member’s right to issue future Drawdown Notices to such Member, in each case at the discretion of the Managing Member. The lender shall have full recourse to the Member, and the terms of any Member Loan, including the interest rate, shall be commercially reasonable as determined by the Managing Member in its discretion. Each Member hereby irrevocably appoints the Managing Member as its attorney-in-fact to arrange such Member Loans, and to execute and deliver on behalf of such Member all documents or other instruments related thereto, without prior notice to such Member. Such appointment and power of attorney is coupled with and is intended to secure an interest in property and the obligations of the relevant Member hereunder, is irrevocable, shall survive the Transfer of the Member’s interest in the Company and shall survive and shall not be affected by, the subsequent death, disability, incapacity, incompetency, termination, bankruptcy, insolvency or dissolution of the Member, but shall be limited to the term of the Company determined in accordance with this Agreement. Any Member on behalf of which a Member Loan is made shall remain liable to pay the remainder of its Capital Commitment in the amounts and on the terms specified in this Agreement, in addition to payment of any amounts owing in respect of any Member Loan. To the extent permitted by applicable law, Xxxxxxx Xxxxx may, but is not required to, make any such Member Loan. Member Loans will not be made or arranged for any Member to the extent such Member Loans would be prohibited by applicable law, including limitations under the Sarbanes Oxley Act of 2002 or the Xxxx-Xxxxx Act, nor will such loans be made or arranged for Members that are subject to the prohibited transaction rules of ERISA or the Code or for governmental plans that are subject to similar laws, rules or regulations. A Member Loan will not alter the defaulting Member’s other obligations to the Company, including any obligation to make future Capital Contributions. 3.4.4 The Managing Member may require, in its discretion, that the defaulting Member forfeit, without consideration, to the Company some or all of its interest in the Company (including its interest in future allocations and distributions and some or all of the rights associated with such interest). Subject to applicable law, such forfeiture will not alter such defaulting Member’s obligations to the Company, including any obligation to fund future Capital Contributions or make other required payments and such Member will continue to retain all such obligations. The Capital Account balance (and the Capital Sub-Account balance) associated with the portion of the Default Interest shall be forfeited and allocated to the non-defaulting Members pursuant to this Section 3.4.4 3.4 as if it were an item of income. The Managing Member will determine appropriate mechanisms for implementing these provisions, including adjustments to the future distributions to Members to take into account any forfeiture described above. 3.4.5 The Managing Member may allow a defaulting Member to withdraw from the Company upon such terms and conditions as may be established by the Managing Member, which may include, without limitation, the execution of liability releases, payment of legal and administrative expenses and other reasonable fees and the forfeiture of all or a portion of such Member’s Capital Account. 3.4.6 In addition to any obligation described in Section 6.9, in connection with any default, each Member hereby agrees, if it is a defaulting Member, to indemnify the Company, the Managing Member and any of their respective Affiliates for any and all claims, losses, liabilities or damages (including attorneys’ fees and other related out-of-pocket expenses) suffered or incurred by any such Person as a result of the defaulting Member failing to make a required Capital Contribution or otherwise failing to comply with the terms of the Subscription Agreement, and the Managing Member may require the defaulting Member to be responsible for all fees and expenses (unless such requirement is waived by the Managing Member), including attorneys’ fees and sales commissions, incurred as a result of the default. The Company generally will deduct such fees and expenses from net proceeds paid to the defaulting Member, if any. 3.4.7 The remedies provided in this Section 3.4 are in addition to and not in limitation of any other right or remedy of the Company, the Managing Member provided by law, at equity or under this Agreement, the Subscription Agreement, any client account implementation agreement or any related agreements. 3.4.8 The Company may agree with the Parent Company and any other Member that is an investment vehicle that invests all or substantially all of its assets in the Company (an ““ Investment Fund”) that, if a direct investor in the Parent Company or other Investment Fund fails to make a contribution to the Parent Company or such or Investment Fund, as applicable, and as a result the Parent Company or such other Investment Fund does not make all or a portion of a Capital Contribution or other required payment to the Company, the Company will treat the Parent Company or such other Investment Fund as a defaulting Member, but solely with respect to the portion of the Parent Company’s or such other Investment Fund’s interest in the Company relating to the direct interest in the Parent Company or such other Investment Fund held by the direct investor in the Parent Company or such other Investment Fund that failed to make a contribution to the Parent Company or such other Investment Fund, as applicable. 3.4.9 Notwithstanding any provision of this Section 3.4 to the contrary, in the event that the Special Interest Member is the defaulting Member, the provisions of Sections 3.4.2 and 3.4.4 shall not apply to the Special Interest Member’s right to receive the Incentive Allocation or Promote but only to that portion of its interest attributable to its subscription obligations to the Company and its right to distributions, and allocations of income and loss related thereto. Accordingly, in no event shall any purchaser of a portion of the interest of the Special Interest Member pursuant to Section 3.4.2 become entitled to any Incentive Allocation (or the associated portion of the Special Interest Member’s Capital Account balance), all of which shall be retained by the Special Interest Member, nor shall any such purchaser become obligated to contribute to the Company any amount under Section 10.2.4 in respect of the interest it purchased pursuant to Section 3.4.2. In addition, in no event shall the Special Interest Member be deemed to have forfeited pursuant to Section 3.4.4 the portion of its interest in the Company, which entitles the Special Interest Member to receive Incentive Allocations or Promote (or the associated portion of the Special Interest Member’s Capital Account balance).

Default by Member. 3.4.1 The Members agree that prompt payment of a Drawdown and of any amounts required to be paid by the Members under Sections 4.7, 6.10, and 8.3 or otherwise under this Agreement is of the essence, that failure of any Member to make such payment will cause irreparable harm to the Company and the other Members, and that the amount of damages caused by such harm will be difficult to calculate. The Members acknowledge that failure by a Member promptly to pay a Drawdown (including in connection with a recall of distributions or to satisfy an indemnification obligation) may require non-defaulting Members to contribute additional capital (not to exceed their then Undrawn Commitment) to satisfy such shortfall, may result in the Company’s default in respect of its obligations, and may reduce the number of Portfolio Assets that the Company may acquire, each of which may affect the financial stability of the Company. Accordingly, the Members agree that, except as otherwise provided in Section 9.2, if a Member shall fail to fund a Drawdown or other required payment to the Company under this Agreement when due within 10 calendar days of the due date set forth in the Drawdown Notice or other applicable notice, or fails to comply with any term or condition set forth in this Agreement, the Member’s Subscription Agreement, or any other agreement related to a Member’s interest in the Company, such Member shall be in default; provided, that the Company, in its discretion, may extend the time period before a default occurs. A defaulting Member shall not be entitled to vote on any matter upon which the Members are entitled to vote hereunder, and the Default Interest in the Company will not be included in calculating the Company interests of the Members entitled to vote on or required to take any action under this Agreement. Upon any such default, the Company, in its discretion, may undertake any one or more of the options listed below in this Section 3.4. 3.4.2 Upon any such default, the Managing Member will have the option, but not the obligation, to undertake any one or more of the following options in any particular order or differently with respect to each defaulting Member, subject to applicable law: (i) to cause the Company to acquire all or part of the interest of the defaulting Member in the Company (the “Default Interest”); (ii) assign the Company’s right to acquire all or part of the Default Interest to its Affiliate; or (iii) sell all or part of the Default Interest to third parties (including any non-defaulting Member), including through a sale on a qualified matching service, whether or not such service is administered by Xxxxxxx SachsXxxxx, or otherwise; provided that the Managing Member shall have no obligation to offer the Default Interest to any Person. A Transfer of all or part of a Default Interest, pursuant to clauses (i) and (ii) above, generally will be made at a price equal to the lower of: (a) the fair value of the Default Interest as of the date of default (as reasonably determined in good faith by the Managing Member) and (ii) the book value of the Default Interest (as reasonably determined by the Managing Member in accordance with generally accepted accounting principles) as of the end of the fiscal year immediately preceding the fiscal year in which the default is declared and adjusted for contributions from the defaulting Member and distributions, if any, to the defaulting Member since the end of the fiscal year as of which these values are determined (the “Default Price”); provided that the Managing Member may transfer the Default Interest under clauses (i) and (ii) at a price less than the Default Price with the consent of the defaulting Member (the Default Price or such lesser amount, the “Default Interest Purchase Price”). A transfer of a Default Interest under the circumstances described in clause (iii) of this paragraph generally may be made at (and, for purposes of a transfer of Default Interest under the circumstances described in clause (iii) of this paragraph, the “Default Interest Purchase Price” will be deemed to be) any price offered by any such third party, including at a price that is a significant discount to the book value of the Default Interest, and in some cases, solely in exchange for such third party’s assumption of the defaulting member’s Undrawn Commitment. Any Person acquiring all or part of the Default Interest shall be required to assume the obligation of the defaulting Member to contribute to the Company the appropriate portion of past due Drawdowns (and any amounts past due in respect of any other required payment) and future Capital Contributions related to the Default Interest or other required payments. Within 30 days of the payment of the Default Interest Purchase Price (or portion thereof if the entire Default Interest is not acquired) to the Company, the defaulting Member will receive an amount equal to 50% of the Default Interest Purchase Price (or portion thereof). The remainder of the Default Interest Purchase Price (or portion thereof) will be retained by the Company. The Person(s) acquiring all or a portion of the Default Interest shall succeed to all economic attributes associated with the portion of the Default Interest acquired, including a proportionate share of the Capital Account balance, any unreturned Contributed Capital, and the entire remaining Undrawn Commitment. In addition, the 50% of the Default Interest Purchase Price retained by the Company shall be treated as an item of income solely for purposes of computing the Members’ respective Capital Account balances and shall be treated as an amount of proceeds realized from a Portfolio Asset. 3.4.3 The Managing Member may in its discretion, but is not required to, arrange for a full recourse loan with an expected maturity of 60 days or less, or such longer period in the discretion of the Managing Member (a “Member Loan”), to any Member who fails to make a timely Capital Contribution or other required payment to the Company, and the proceeds of such Member Loan will be used to make such contribution or payment. A Member Loan may be secured by the Member’s interest in the Company and the Managing Member’s right to issue future Drawdown Notices to such Member, in each case at the discretion of the Managing Member. The lender shall have full recourse to the Member, and the terms of any Member Loan, including the interest rate, shall be commercially reasonable as determined by the Managing Member in its discretion. Each Member hereby irrevocably appoints the Managing Member as its attorney-in-fact to arrange such Member Loans, and to execute and deliver on behalf of such Member all documents or other instruments related thereto, without prior notice to such Member. Such appointment and power of attorney is coupled with and is intended to secure an interest in property and the obligations of the relevant Member hereunder, is irrevocable, shall survive the Transfer of the Member’s interest in the Company and shall survive and shall not be affected by, the subsequent death, disability, incapacity, incompetency, termination, bankruptcy, insolvency or dissolution of the Member, but shall be limited to the term of the Company determined in accordance with this Agreement. Any Member on behalf of which a Member Loan is made shall remain liable to pay the remainder of its Capital Commitment in the amounts and on the terms specified in this Agreement, in addition to payment of any amounts owing in respect of any Member Loan. To the extent permitted by applicable law, Xxxxxxx Xxxxx may, but is not required to, make any such Member Loan. Member Loans will not be made or arranged for any Member to the extent such Member Loans would be prohibited by applicable law, including limitations under the Sarbanes Oxley Act of 2002 or the Xxxx-Xxxxx Act, nor will such loans be made or arranged for Members that are subject to the prohibited transaction rules of ERISA or the Code or for governmental plans that are subject to similar laws, rules or regulations. A Member Loan will not alter the defaulting Member’s other obligations to the Company, including any obligation to make future Capital Contributions. 3.4.4 The Managing Member may require, in its discretion, that the defaulting Member forfeit, without consideration, to the Company some or all of its interest in the Company (including its interest in future allocations and distributions and some or all of the rights associated with such interest). Subject to applicable law, such forfeiture will not alter such defaulting Member’s obligations to the Company, including any obligation to fund future Capital Contributions or make other required payments and such Member will continue to retain all such obligations. The Capital Account balance (and the Capital Sub-Account balance) associated with the portion of the Default Interest shall be forfeited and allocated to the non-defaulting Members pursuant to this Section 3.4.4 as if it were an item of income. The Managing Member will determine appropriate mechanisms for implementing these provisions, including adjustments to the future distributions to Members to take into account any forfeiture described above. 3.4.5 The Managing Member may allow a defaulting Member to withdraw from the Company upon such terms and conditions as may be established by the Managing Member, which may include, without limitation, the execution of liability releases, payment of legal and administrative expenses and other reasonable fees and the forfeiture of all or a portion of such Member’s Capital Account. 3.4.6 In addition to any obligation described in Section 6.9, in connection with any default, each Member hereby agrees, if it is a defaulting Member, to indemnify the Company, the Managing Member and any of their respective Affiliates for any and all claims, losses, liabilities or damages (including attorneys’ fees and other related out-of-pocket expenses) suffered or incurred by any such Person as a result of the defaulting Member failing to make a required Capital Contribution or otherwise failing to comply with the terms of the Subscription Agreement, and the Managing Member may require the defaulting Member to be responsible for all fees and expenses (unless such requirement is waived by the Managing Member), including attorneys’ fees and sales commissions, incurred as a result of the default. The Company generally will deduct such fees and expenses from net proceeds paid to the defaulting Member, if any. 3.4.7 The remedies provided in this Section 3.4 are in addition to and not in limitation of any other right or remedy of the Company, the Managing Member provided by law, at equity or under this Agreement, the Subscription Agreement, any client account implementation agreement or any related agreements. 3.4.8 The Company may agree with the Parent Company and any other Member that is an investment vehicle that invests all or substantially all of its assets in the Company (an “Investment Fund”) that, if a direct investor in the Parent Company or other Investment Fund fails to make a contribution to the Parent Company or such or Investment Fund, as applicable, and as a result the Parent Company or such other Investment Fund does not make all or a portion of a Capital Contribution or other required payment to the Company, the Company will treat the Parent Company or such other Investment Fund as a defaulting Member, but solely with respect to the portion of the Parent Company’s or such other Investment Fund’s interest in the Company relating to the direct interest in the Parent Company or such other Investment Fund held by the direct investor in the Parent Company or such other Investment Fund that failed to make a contribution to the Parent Company or such other Investment Fund, as applicable. 3.4.9 Notwithstanding any provision of this Section 3.4 to the contrary, in the event that the Special Interest Member is the defaulting Member, the provisions of Sections 3.4.2 and 3.4.4 shall not apply to the Special Interest Member’s right to receive the Incentive Allocation or Promote but only to that portion of its interest attributable to its subscription obligations to the Company and its right to distributions, and allocations of income and loss related thereto. Accordingly, in no event shall any purchaser of a portion of the interest of the Special Interest Member pursuant to Section 3.4.2 become entitled to any Incentive Allocation (or the associated portion of the Special Interest Member’s Capital Account balance), all of which shall be retained by the Special Interest Member, nor shall any such purchaser become obligated to contribute to the Company any amount under Section 10.2.4 in respect of the interest it purchased pursuant to Section 3.4.2. In addition, in no event shall the Special Interest Member be deemed to have forfeited pursuant to Section 3.4.4 the portion of its interest in the Company, which entitles the Special Interest Member to receive Incentive Allocations or Promote (or the associated portion of the Special Interest Member’s Capital Account balance).