Common use of Failure to Fund Capital Contributions Clause in Contracts

Failure to Fund Capital Contributions. If a Member (a “Defaulting Member”) does not fully fund its Interest Percentage of any required Capital Contribution within the Funding Period, then the Member funding its Interest Percentage of such required Capital Contribution (hereinafter referred to as a “Contributing Member”) may within twenty (20) business days after expiration of the Funding Period (the “Election Period”) deliver notice to the Defaulting Member that such Contributing Member has elected to lend all or a portion of the amount to be contributed by the Defaulting Member (the “Failed Contribution Amount”) to the Defaulting Member and shall delivering an amount equal to the Failed Contribution Amount directly to the Company within ten (10) business days of delivery of such notice (a Contributing Member that elects to make a Member Loan shall be referred to herein as an “Electing Contributing Member”). The amount equal to the Failed Contribution Amount shall be treated as a loan (a “Member Loan”) by the Electing Contributing Member to the Defaulting Member and a capital contribution by the Defaulting Member to the Company. Such Member Loan shall (a) bear interest at fifteen (l5%) percent per annum, (b) be payable in full eighteen (18) months after the date of issuance (such l8-month anniversary, the “Member Loan Maturity Date”) and (c) be repaid, both principal and interest, by the Defaulting Member and by the Company on behalf of the Defaulting Member to the Electing Contributing Member (and any such payment shall be treated for purposes of Article VI as having been distributed to the Defaulting Member) from all funds otherwise distributable to the Defaulting Member pursuant to this Agreement, and no amounts may be distributed to the Defaulting Member pursuant to this Agreement (and shall instead be distributed to the Electing Contributing Member and applied against the Member Loan) until the Member Loan and all accrued interest thereon is paid in full. If the Member Loan is not repaid in full on or prior to the Member Loan Maturity Date, then the Electing Contributing Member shall have the irrevocable right, exercisable at any time after the Member Loan Maturity Date, to convert the Member Loan into a Capital Contribution of the Electing Contributing Member. On the last day of the Election Period and, in the event that a Contributing Member makes a Member Loan, upon the conversion of such Member Loan:

Failure to Fund Capital Contributions. If a Member (a “Defaulting Member”) does not fully fund its Interest Percentage of any required Capital Contribution within the Funding Period, then the Member funding its Interest Percentage of such required Capital Contribution (hereinafter referred fails to as a “Contributing Member”) may within twenty (20) business days after expiration of the Funding Period (the “Election Period”) deliver notice to the Defaulting Member that such Contributing Member has elected to lend all or a portion of the amount to be contributed by the Defaulting Member (the “Failed Contribution Amount”) to the Defaulting Member and shall delivering contribute an amount equal to the Failed Contribution Amount directly entire amount required to be contributed by it within the applicable period specified above after the Capital Call Notice (the “Failing Member”), and if the other Member (the “Non-Failing Member”) makes its proportionate contribution within such applicable period and so notifies the Failing Member, and the Failing Member fails fully to remedy its failure to contribute within five (5) days after the giving of a notice by the Non-Failing Member with respect to a failure under this Section 5.04 (the “Notice of Intention”), then one or more of the following may occur, at the option and election of the Non-Failing Member, which election shall be specified in the Notice of Intention: (i) the Non-Failing Member may require the Company to repay immediately to the Non-Failing Member the contribution it made pursuant to the applicable Capital Call Notice, together with interest actually earned thereon by the Company until repayment, if any; (ii) the Non-Failing Member may, but need not, make an additional contribution to the Company within ten (10) business days not in excess of delivery the amount the Failing Member failed to contribute pursuant to Section 5.03, in which case the Percentage Interests of the Members with respect to the Investment for which Capital Contributions were made in respect of such notice (a Contributing Member that elects to make a Member Loan Capital Call Notice shall be referred adjusted and reflect the ratio of the Capital Contributions actually made by each Member to herein the total Capital Contributions actually made by each Member to the total Capital Contributions in respect of such notice, or (iii) the Non-Failing Member may elect to advance to the Company, as a loan to the Failing Member, an “Electing Contributing Member”). The amount equal to the Failed Contribution Amount amount the Failing Member failed to contribute pursuant to Section 5.03, which loan shall be treated as a loan bear interest at an annual rate (compounded semi-annually) equal to the highest rater permitted by applicable law in no event to exceed twenty percent (20%) (a “Member Loan”) by ). During the Electing Contributing Member Term, notwithstanding anything to the Defaulting Member and contrary, a capital contribution by the Defaulting Member to the Company. Such Member Loan shall (a) bear interest at fifteen (l5%) percent per annum, (b) be payable in full eighteen (18) months after the date of issuance (such l8-month anniversary, the “Member Loan Maturity Date”) and (c) be repaid, both principal and interest, by the Defaulting Member and repaid with amounts otherwise distributable by the Company on behalf of the Defaulting Member to the Electing Contributing Failing Member being delivered directly by the Company to the Non-Failing Member until such Member Loan and all interest thereon is repaid (which payments will be applied first to accrued interest on the outstanding principal balance of such loan and then outstanding principal balance of such loan) and any such payment amounts so applied shall be treated for purposes of Article VI under this Agreement as having been distributed to the Defaulting Failing Member) from all funds otherwise distributable . Any such loan shall be recourse to the Defaulting Failing Member pursuant to this Agreement, and no amounts any outstanding balance following dissolution of the Company shall be immediately due and payable by the Failing Member. A Member Loan may be distributed to the Defaulting Member pursuant to this Agreement (and shall instead be distributed to the Electing Contributing Member and applied against the Member Loan) until the Member Loan and all accrued interest thereon is paid in full. If the Member Loan is not repaid in full on or prior to the Member Loan Maturity Date, then the Electing Contributing Member shall have the irrevocable right, exercisable prepaid at any time after the Member Loan Maturity Date, or from time to convert the Member Loan into time by a Capital Contribution of the Electing Contributing Failing Member. On the last day of the Election Period and, in the event that a Contributing Member makes a Member Loan, upon the conversion of such Member Loan:.

Failure to Fund Capital Contributions. If a Member (a “Defaulting Member”) does not fully fund its Interest Percentage of shall fail to timely make any required Capital Contribution within the Funding Period, then the required pursuant to this Section 2.2 (such Member funding its Interest Percentage of such required Capital Contribution (being hereinafter referred to as a “Contributing Member”) may within twenty (20) business days after expiration of the Funding Period (the “Election Period”) deliver notice to the Defaulting Member that such Contributing Member has elected to lend all or a portion of the amount to be contributed by the Defaulting Member (the “Failed Contribution Amount”) to the Defaulting Member and shall delivering an amount equal to the Failed Contribution Amount directly to the Company within ten (10) business days of delivery of such notice (a Contributing Member that elects to make a Member Loan shall be referred to herein as an “Electing Non-Contributing Member”). The , the Managing Member shall give the other Members notice of the amount equal not funded by the Non-Contributing Member (such amount being hereinafter referred to as the “Failed Contribution”), and if one or more of such other Members shall have funded its ratable share of the Capital Contribution in question (each a “Contributing Member” and collectively, the “Contributing Members”), each Contributing Member shall have the right to fund its pro rata portion of such Failed Contribution (such amount of all or any part of a Failed Contribution funded by such Contributing Member, the “Funded Amount”), and elect, at its sole election, to (i) treat the Funded Amount as an unsecured loan to the Failed Contribution Amount shall be treated as a loan Company (a “Member Loan”), repayable solely out of available cash, and bearing interest at the rate of 15% per annum, compounded monthly as of the end of each calendar month, or (ii) treat such Funded Amount as a Capital Contribution by such Contributing Member, in which event (A) such Contributing Member’s Capital Contribution and Capital Account shall be increased by 115% of such Contributing Member’s Funded Amount, and (B) the Electing Percentage Interest of such Contributing Member to shall be increased by such Funded Amount (valued in accordance with the Defaulting value of Percentage Interests as of the date hereof) and the Percentage Interest of the Non-Contributing Member and a capital contribution by the Defaulting Member to the Companyshall be correspondingly decreased. Such Any Member Loan shall (abe secured by a lien in favor of the Contributing Member(s) bear interest at fifteen (l5%) percent per annum, (b) be payable in full eighteen (18) months after on the date interests of issuance (the Non-Contributing Member that owes such l8-month anniversary, the “obligations. Any Contributing Member or Members electing to treat its Funded Amount as a Member Loan Maturity Date”) and (c) be repaid, both principal and interest, by the Defaulting Member and by the Company on behalf of the Defaulting Member shall receive all distributions payable to the Electing Non-Contributing Member (and any such payment shall be treated for purposes of Article VI as having been distributed to the Defaulting Member) from all funds otherwise distributable to the Defaulting Member pursuant to this AgreementSection 7.1 below until such time as the Member Loan shall be paid in full (including all interest thereon); provided that if more than one Contributing Member has made a Member Loan in respect of such Non-Contributing Member’s Failed Contribution, each such Contributing Member shall receive its proportionate share of all such distributions based on such Contributing Member’s Member Loan as compared to all Member Loans made in respect of such Failed Contribution. In the event that one or more Contributing Members elect to treat their respective Funded Amounts as capital contributions and no amounts may the Non-Contributing Member subsequently contributes all or any portion of the Failed Contribution amount to the Company pursuant to the 15-day cure period in Section 3.6(a) below, (x) such contributed amount shall be distributed to the Defaulting Member pursuant to this Agreement Contributing Member(s) pro rata in accordance with their respective Funded Amounts, and (y)(I) the Contributing Members’ Percentage Interests shall be decreased by such distribution in respect of its Funded Amount and shall instead be distributed to (II) the Electing Contributing Member and applied against the Member Loan) until the Member Loan and all accrued interest thereon is paid in full. If the Member Loan is not repaid in full on or prior to the Member Loan Maturity Date, then the Electing Contributing Member shall have the irrevocable right, exercisable at any time after the Member Loan Maturity Date, to convert the Member Loan into a Capital Contribution of the Electing Non-Contributing Member. On the last day of the Election Period and, in the event that a Contributing Member makes a Member Loan, upon the conversion of such Member Loan:’s Percentage Interest shall be correspondingly increased.

Failure to Fund Capital Contributions. If any Member shall fail to make all or any portion of any Capital Contribution required pursuant to Section 6.2 in the amount and within the time period specified therein (such Member is hereinafter referred to as a “Non-Contributing Member”), the Board of Managers shall give prompt notice to the Members of such failure and the amount of the Capital Contribution not funded by the Non-Contributing Member (a any such amount not so funded is hereinafter referred to as the “Defaulting MemberFailed Contribution”), and any Member or Members that is or are (as the case may be) does not fully in default with respect to the Failed Contribution or any contribution required to be made by such Member in connection with such Capital Call may fund its Interest Percentage of any required Capital Contribution within the Funding Period, then the Member funding its Interest Percentage all or part of such required Capital Failed Contribution (each such funding Member is hereinafter referred to as a “Contributing Member”) may within twenty (20) business days after expiration ). If more than one Member desires to be a Contributing Member and such Contributing Members desire to fund together more than the aggregate amount of the Funding Period Failed Contribution, each such Contributing Member shall have the right to fund the amount the Non-Contributing Member failed to fund pro rata in proportion to the relative Percentage Interests of such Contributing Members. If, after giving effect to the preceding sentence, any amount of such Failed Contribution remains unfunded, (i) in the event more than one Contributing Member elects to fund any additional amount of such Failed Contribution, such Contributing Members may elect to fund any such remaining amount of such Failed Contribution on a pro rata basis or (ii) in the event only one Contributing Member is willing to fund any portion of the remaining unfunded Failed Contribution, such Contributing Member may fund the entire remaining amount of such Failed Contribution. The provisions of the preceding sentence shall continue to apply until either (i) the entire Failed Contribution has been funded by Contributing Members or (ii) in the event the entire amount of such Failed Contribution has not been funded, no Contributing Member is willing to fund any further amount of such Failed Contribution. The portion (the “Election PeriodFunded Portion”) deliver notice to of the Defaulting Member that Failed Contribution funded by such Contributing Member has elected to lend all or a portion of the amount to be contributed by the Defaulting Member (the “Failed Contribution Amount”) to the Defaulting Member and shall delivering an amount equal to the Failed Contribution Amount directly to the Company within ten (10) business days of delivery of such notice (a Contributing Member that elects to make a Member Loan shall be referred to herein as an “Electing Contributing Member”). The amount equal to the Failed Contribution Amount shall be treated as a loan (Capital Contribution by any such Contributing Member. Any such failure by a “Member Loan”) by the Electing Non-Contributing Member to the Defaulting Member and a capital contribution by the Defaulting Member to the Company. Such Member Loan shall (a) bear interest at fifteen (l5%) percent per annum, (b) be payable in full eighteen (18) months after the date of issuance (such l8-month anniversary, the “Member Loan Maturity Date”) and (c) be repaid, both principal and interest, by the Defaulting Member and by the Company on behalf of the Defaulting Member to the Electing Contributing Member (and any such payment shall be treated for purposes of Article VI as having been distributed to the Defaulting Member) from all funds otherwise distributable to the Defaulting Member pursuant to this Agreement, and no amounts may be distributed to the Defaulting Member pursuant to this Agreement (and shall instead be distributed to the Electing Contributing Member and applied against the Member Loan) until the Member Loan and all accrued interest thereon is paid in full. If the Member Loan is not repaid in full on or prior to the Member Loan Maturity Date, then the Electing Contributing Member shall have the irrevocable right, exercisable at any time after the Member Loan Maturity Date, to convert the Member Loan into make a Capital Contribution shall result in the dilution of the Electing Percentage Interest of such Non-Contributing MemberMember as provided for in Section 6.4 below. On Notwithstanding anything to the last day contrary contained herein, any failure by a Non-Contributing Member to make a Capital Contribution shall not be a breach of this Agreement and the dilution provided in Section 6.4 shall be the sole and exclusive remedy of the Election Period and, in Company and the event that other Members against a Non-Contributing Member makes with respect to the failure by a Non-Contributing Member Loan, upon to make a Regulatory Capital Call or Additional Capital Call and the conversion of such Member Loan:Non-Contributing Members shall have no other or further obligations to the Company in connection with any Failed Contribution.

Failure to Fund Capital Contributions. If a Member (a “Defaulting Member”) does not fully fund its Interest Percentage of any required Capital Contribution within the Funding Period, then the Member funding its Interest Percentage of such required Capital Contribution (hereinafter referred fails to as a “Contributing Member”) may within twenty (20) business days after expiration of the Funding Period (the “Election Period”) deliver notice to the Defaulting Member that such Contributing Member has elected to lend all or a portion of the amount to be contributed by the Defaulting Member (the “Failed Contribution Amount”) to the Defaulting Member and shall delivering contribute an amount equal to the Failed Contribution Amount directly entire amount required to be contributed by it within the applicable period specified above after the Capital Call Notice (the “Failing Member”), and if the other Member (the “Non Failing Member”) makes its proportionate contribution within such applicable period and so notifies the Failing Member, and the Failing Member fails fully to remedy its failure to contribute within five (5) days after the giving of a notice by the Non Failing Member with respect to a failure under this Section 5.4 (the “Notice of Intention”), then one or more of the following may occur, at the option and election of the Non Failing Member, which election shall be specified in the Notice of Intention: (i) the Non Failing Member may require the Company to repay immediately to the Non Failing Member the contribution it made pursuant to the applicable Capital Call Notice, together with interest actually earned thereon by the Company until repayment, if any; (ii) the Non Failing Member may, but need not, make an additional contribution to the Company within ten not in excess of the amount the Failing Member failed to contribute pursuant to Section 5.3, in which case the Percentage Interests of the Members shall be adjusted as provided below in this Section 5.4 (10the “Contribution Option”), (iii) business days the Non Failing Member may, but need not, make an additional contribution to the Company not in excess of delivery of such notice the amount the Failing Member failed to contribute pursuant to Section 5.3 as default capital (a Contributing Member that elects to make a Member Loan shall be referred to herein as an “Electing Contributing MemberDefault Capital Contribution”). The , or (iv) the Non Failing Member may elect to advance to the Company, as a loan to the Failing Member, an amount equal to the Failed Contribution Amount amount the Failing Member failed to contribute pursuant to Section 5.3, which loan shall be treated as a loan bear interest at an annual rate (compounded semi annually) equal to the highest rate permitted by applicable law in no event to exceed eighteen percent (18%) (a “Member Loan”) by ). During the Electing Contributing Member Term, notwithstanding anything to the Defaulting Member and contrary, a capital contribution by the Defaulting Member to the Company. Such Member Loan shall (a) bear interest at fifteen (l5%) percent per annum, (b) be payable in full eighteen (18) months after the date of issuance (such l8-month anniversary, the “Member Loan Maturity Date”) and (c) be repaid, both principal and interest, by the Defaulting Member and repaid with amounts otherwise distributable by the Company on behalf of the Defaulting Member to the Electing Contributing Failing Member being delivered directly by the Company to the Non Failing Member until such Member Loan and all interest thereon is repaid (which payments will be applied first to accrued interest on the outstanding principal balance of such loan and then outstanding principal balance of such loan) and any such payment amounts so applied shall be treated for purposes of Article VI under this Agreement as having been distributed to the Defaulting Failing Member) from all funds otherwise distributable . Any such loan shall be recourse to the Defaulting Failing Member pursuant to this Agreement, and no amounts any outstanding balance following dissolution of the Company shall be immediately due and payable by the Failing Member. A Member Loan may be distributed to the Defaulting Member pursuant to this Agreement (and shall instead be distributed to the Electing Contributing Member and applied against the Member Loan) until the Member Loan and all accrued interest thereon is paid in full. If the Member Loan is not repaid in full on or prior to the Member Loan Maturity Date, then the Electing Contributing Member shall have the irrevocable right, exercisable prepaid at any time after or from time to time by a Failing Member. If requested by the Non Failing Member, any Member Loan Maturity Dateshall be structured (i) to qualify as a “real estate asset” under Code § 856(c)(5)(B) or, to convert the if such Member Loan into cannot so qualify, it (A) shall be structured in such manner as the Non Failing Member determines may be necessary or appropriate to prevent any such Member Loan from giving rise to a Capital Contribution violation of the Electing Contributing Member. On requirements of Code § 856(c)(4) with respect to the last day of the Election Period and, PRISA III REIT (in the event that the PRISA III is the Non Failing Member) or Ashford (in the event Ashford is the Non Failing Member) or (B) may be transferred to a Contributing taxable REIT subsidiary with respect to the PRISA III REIT or Ashford (as applicable), (ii) to generate income qualified under Code §§ 856(c)(2) and 856(c)(3), and (iii) to contain such terms as the Non Failing Member makes a Member Loan, upon the conversion of shall reasonably request to cause such Member LoanLoan to be properly treated as indebtedness for federal income tax purposes, and the Failing Member shall cooperate in such structuring and execute all documents reasonably required in connection therewith. If a Non Failing member elects the Contribution Option above, the Percentage Interests of the Members shall be subject to adjustment, as follows: