Common use of Default by Member Clause in Contracts

Default by Member. In the event that a Member fails to make any payment, or any installment thereof, when due, of any contribution or other obligation hereunder or under a Contribution Agreement, the Board of Governors may enforce such obligation in such manner as may be permitted by law. Without limiting the generality of the foregoing, the Board of Governors may, in its sole discretion, (i) bring an action at law or in equity to enforce such obligation, (ii) assess interest on the unpaid amount at the highest rate of interest then being charged to the Company by any lender, (iii) allow the remaining Members to loan funds to the Company in the amount of the deficiency, (iv) retain amounts of Distributions otherwise distributable to the defaulting Member as an offset to the deficiency, and/or (v) allow the remaining Members to contribute the amount of the deficiency, thereby increasing their Membership Interests in relation to the defaulting Member. If the Board allows the remaining Members to contribute the amount of the deficiency pursuant to clause (v) above, each remaining Member shall have the right to contribute an amount in the proportion which each such remaining Member’s Percentage Interest bears to the aggregate Percentage Interests of all remaining Members who desire to participate in such contribution. Upon such contribution by the remaining Members, Schedule A shall be deemed to be appropriately amended. If the Board elects to pursue remedies other than as provided in clause (v) above, the Voting Interest and Percentage Interest of the defaulting Member shall remain unaffected by the default. Each Member agrees that in the event such Member fails to make any payment, or any installment thereof, when due, of any contribution or other obligation hereunder or under a Contribution Agreement, such Member and the voting representatives of such Member and Governors appointed by such Member shall not be permitted in person or by proxy to vote either as a Member or a Governor on the question of what action the Company shall take with respect to such default.