Common use of Default Loans Clause in Contracts

Default Loans. In the event that a Member fails or refuses for any reason to make any Capital Contributions required of it pursuant to Section 5.2(A) (a “Non-Funding Member”), another Member or one of its Affiliates may make a loan to the Non-Funding Member by transferring directly to the Company, on behalf of such Non-Funding Member, an amount not to exceed the unpaid portion of such Non-Funding Member’s Capital Contribution, and each such loan (each, a “Default Loan”), shall accrue interest as of the date such Default Loan is made at the annual rate of eighteen percent (18%) compounded quarterly. Each Default Loan (together with all accrued, unpaid interest thereon) shall be repaid to such Member (or its Affiliate(s), as the case may be) out of any amounts otherwise distributable to the relevant Non-Funding Member pursuant to Article VI below, prior to making any subsequent distributions to such Non-Funding Member pursuant to Article VI. For purposes of this Agreement, any repayment of all or a portion of any Default Loan pursuant to the immediately preceding sentence shall be deemed to be, and treated as, a distribution to the Non-Funding Member followed by a re-payment by the Non-Funding Member to such other Member or its Affiliate(s). If, at any time during which a Default Loan remains outstanding, the Company receives from the Non-Funding Member all or any portion of such unpaid Capital Contributions (together with all accrued by unpaid interest on such Default Loan or portion thereof), the Company shall promptly deliver all such amounts to the Member who made such loan (or its Affiliates, as the case may be). ​