Common use of Remedies for Failure to Fund Capital Contributions Clause in Contracts

Remedies for Failure to Fund Capital Contributions. (a) If any Member shall fail to timely make a Capital Contribution required pursuant to Section 6.3 in the amount and within the time period specified in the Capital Call notice (such Member is hereinafter referred to as a “Non-Contributing Member”), the Managing Member shall give written notice in accordance with the requirements of Section 13.2 of such failure to all other Members and any other Member or Members may fund all or part of such Capital Contribution on behalf of such Non-Contributing Member (each such funding Member is hereinafter referred to as a “Contributing Member”). Any amounts funded by a Contributing Member on behalf of a Non-Contributing Member shall be made directly to the Company but shall be treated as (a) a recourse demand loan made by the Contributing Member to the Non-Contributing Member (the “Member Loan”), bearing interest at the lower of (i) the rate of return to which the Contributing Member is entitled pursuant to Section 8.1 at the time such Member Loan is made, plus the Member Loan Rate, and (ii) the maximum rate permitted by applicable law, followed by (b) a capital contribution by such Non-Contributing Member to the Company. If and to the extent permitted under the terms of the Loan Documents, the Member Loan will be secured by a UCC security interest in the Non-Contributing Member’s Interest (which the Non-Contributing Member hereby grants) and any transferee of the Non-Contributing Member’s Interest will take that Interest subject to the lien. In addition, the lien of such UCC security interest shall be superior-in-interest to the lien of any pledge or other encumbrance granted by the Non-Contributing Member with respect to its Interest pursuant to and in accordance with Section 9.5 hereof. The Member Loan (to the extent of unpaid principal and interest) shall be payable within thirty (30) days after written demand by the Contributing Member and shall be repaid (x) directly by the Company on behalf of the Non-Contributing Member to the Contributing Member from Net Operating Cash Flow or Capital Proceeds otherwise distributable to the Non-Contributing Member as further provided in Section 8.4, and (y) to the extent outstanding, upon any Transfer of any part of the Non-Contributing Member’s Interest. Any Net Operating Cash Flow or Capital Proceeds used to repay the Member Loan shall be applied first to interest and then to principal. The Member Loan may, at the election of the Contributing Member, be evidenced by a promissory note, and the Contributing Member is hereby granted an irrevocable power of attorney, coupled with an interest, to execute and deliver that promissory note on behalf and in the name of the Non-Contributing Member. The failure of a Contributing Member or Non-Contributing Member to execute the promissory note will not invalidate or otherwise affect the enforceability of, or amounts owing under, any Member Loan.

Remedies for Failure to Fund Capital Contributions. (a) If any Member shall fail to timely make a Capital Contribution required pursuant to Section 6.3 6.2 in the amount and within the time period specified in the Capital Call notice (such Member is hereinafter referred to as a “Non-Contributing Member”), the Managing Member shall give written notice in accordance with the requirements of Section 13.2 of such failure to all other Members and any other Member or Members may fund all or part of such Capital Contribution on behalf of such Non-Contributing Member (each such funding Member is hereinafter referred to as a “Contributing Member”). Any amounts funded by a Contributing Member on behalf of a Non-Contributing Member shall be made directly to the Company but shall be treated as (a) a recourse demand loan made by the Contributing Member to the Non-Contributing Member (the “Member Loan”), bearing interest at the lower of (i) the rate of return to which the Contributing Member is entitled pursuant to Section 8.1 at the time such Member Loan is made, plus the Member Loan Rate, and (ii) the maximum rate permitted by applicable law, followed by (b) a capital contribution by such Non-Contributing Member to the Company. If and to the extent permitted under the terms of the Loan Documents, the Member Loan will be secured by a UCC security interest in the Non-Contributing Member’s Interest (which the Non-Contributing Member hereby grants) and any transferee of the Non-Contributing Member’s Interest will take that Interest subject to the lien. In addition, the lien of such UCC security interest shall be superior-in-interest to the lien of any pledge or other encumbrance granted by the Non-Contributing Member with respect to its Interest pursuant to and in accordance with Section 9.5 hereof. The Member Loan (to the extent of unpaid principal and interest) shall be payable within thirty (30) days after written demand by the Contributing Member and shall be repaid (x) directly by the Company on behalf of the Non-Contributing Member to the Contributing Member from Net Operating Cash Flow or Capital Proceeds otherwise distributable to the Non-Contributing Member as further provided in Section 8.4, and (y) to the extent outstanding, upon any Transfer of any part of the Non-Contributing Member’s Interest. Any Net Operating Cash Flow or Capital Proceeds used to repay the Member Loan shall be applied first to interest and then to principal. The Member Loan may, at the election of the Contributing Member, be evidenced by a promissory note, and the Contributing Member is hereby granted an irrevocable power of attorney, coupled with an interest, to execute and deliver that promissory note on behalf and in the name of the Non-Contributing Member. The failure of a Contributing Member or Non-Contributing Member to execute the promissory note will not invalidate or otherwise affect the enforceability of, or amounts owing under, any Member Loan.