Common use of Security for Member Loan Clause in Contracts

Security for Member Loan. Until such time as a Member Loan has been repaid in full by the Defaulting Member, all Distributions pursuant to this Agreement that would otherwise be paid to the Defaulting Member shall instead be paid directly to the Contributing Member. Such amounts shall be deemed distributed by the Company to the Defaulting Member pursuant to this Agreement and then paid by the Defaulting Member to the Contributing Member and shall be applied first against accrued but unpaid interest owing with respect to the Member Loan and then in reduction of the principal balance thereof. In order to secure the repayment of any and all Member Loans made on behalf of a Defaulting Member, the Defaulting Member hereby grants a security interest in favor of the Contributing Member in and to all Distributions (including, without limitation, liquidation proceeds and any other cash proceeds and interest and principal on any loans made to the Company by the Defaulting Member) to which the Defaulting Member may be entitled under this Agreement, and hereby irrevocably appoints the Contributing Member, and any of the Contributing Member’s representatives, agents, officers or employees, as such Defaulting Member’s attorney(s)-in-fact, with full power to prepare, execute, acknowledge, and deliver, as applicable, all documents, instruments, and/or agreements memorializing and/or securing such Member Loan(s), including, without limitation, such Uniform Commercial Code financing and continuation statements, mortgages, pledge agreements and other security instruments as may be reasonably appropriate to perfect and continue the security interest in favor of such Contributing Member. Upon repayment in full of the Member Loan, any and all documents evidencing such security interest may be discharged or terminated without any action on the part of such Contributing Member or such Contributing Member’s representatives, agents, officers or employees.