Common use of Failure to Make Capital Contributions Clause in Contracts

Failure to Make Capital Contributions. In the event that any Member fails to make any portion of its Capital Contribution called pursuant to Section 4.1.4 above by the Cash Needs Date (such Member is referred to herein as the “Non-Contributing Member”, and the unfunded amount, as the “Unfunded Amount”), the other Member (the “Contributing Member”) may, upon notice to the Non-Contributing Member, elect (as its sole remedies): (a) within five (5) days following the Cash Needs Date, to terminate the Cash Needs Notice and immediately receive back from the Company any such additional Capital Contributions tendered by it; (b) to deliver funds to the Company equal to the Unfunded Amount, which delivery shall be deemed a loan from the Contributing Member (a “Member Loan”) to the Non-Contributing Member that is simultaneously contributed by the Non-Contributing Member to the Company, and which shall bear interest at the Member Loan Rate, and shall be repaid in accordance with the provisions of Article V or (c) make an additional Capital Contribution to the Company in an amount equal to the Unfunded Amount (a “Substitute Capital Contribution”). Additionally, at any time prior to the repayment in full of a Member Loan by the applicable Non-Contributing Member, the Contributing Member shall have the additional right, upon five (5) days written notice to the Non-Contributing Member (during which five (5) day period, except as expressly provided below, the Non-Contributing Member may prepay in whole or in part any Member Loan), to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution to the Company made by the Contributing Member in an amount equal to the outstanding Member Loan, in which case (i) the portion of the Capital Contribution (deemed made by the Non-Contributing Member as a result of the Member Loan) that corresponds to the outstanding portion of the Member Loan will be deemed null and void, (ii) the Contributing Member will be deemed to contribute the Substitute Capital Contribution to the Company as of the conversion date, and (iii) the Percentage Interest of each Member shall be adjusted as set forth below. In the event that either Member makes a Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum of (1) the aggregate of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributions, plus (2) one hundred and fifty percent (150%) of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to the contrary, for so long as the Existing Credit Facility is outstanding and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent of the other Member, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital Contribution; provided, however, that simultaneously with the conclusion of the Hypo Period, each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable Non-Contributing Member given on such date, and for the avoidance of doubt such Non-Contributing Member shall not have the right to prepay such Member Loan prior to such conversion.

Failure to Make Capital Contributions. 3.1.2.1. The Company shall be entitled to enforce the obligations of each Member to make Capital Contributions pursuant to Section 3.1.1. and the Company shall have all remedies available at law or in equity in the event any such Capital Contribution is not so made. 3.1.2.2. In the event that any a Member fails shall fail to timely make any portion of his, her or its Capital Contribution called when required pursuant to Section 4.1.4 above by the Cash Needs Date 3.1.1. of this Agreement (each such Member is being thereafter referred to herein as the “a '’Non-Contributing Member”", and such defaulted amount is hereinafter referred to as a "Failed Contributor"), and if a Non-Contributing Member shall not have timely cured his, her, or its Failed Contribution within ten (10) business days of receipt of written notice of such failure from the unfunded amount, as Manager(s) (the “Unfunded AmountCure Period”), then the other Member (Manager(s), on behalf of the “Contributing Member”) mayCompany, upon notice shall have the right to the purchase to all of a Non-Contributing Member, elect (as its sole remedies): (a) within five (5) days following the Cash Needs Date, 's Interest for an amount up to terminate the Cash Needs Notice and immediately receive back from the Company any to 100% of such additional Capital Contributions tendered by it; (b) to deliver funds to the Company equal to the Unfunded Amount, which delivery shall be deemed a loan from the Contributing Member (a “Member Loan”) to the Non-Contributing Member's Capital Account balance at such time. The Manager(s), on behalf of the Company, may exercise this right by providing written notice to such Non- Contributing Member that is simultaneously contributed within thirty (30) from the end of the Cure Period and such written notice shall specify a date within sixty (60) days from the end of such thirty (30) day period when the repurchase shall be consummated. The Company may in its discretion pay all or a portion of the repurchase price for such Non- Contributing Member's Interest by setting off and canceling any indebtedness then owed by the Non-Contributing Member to the Company, and which shall bear interest at the Member Loan Rateit any, and shall be repaid in accordance with the provisions balance of Article V or (c) make an additional Capital Contribution the repurchase price to be paid In cash. If the Company in an amount equal elects to the Unfunded Amount (repurchase a “Substitute Capital Contribution”). Additionally, at any time prior to the repayment in full of a Member Loan by the applicable Non-Contributing Member's Interest, the Contributing Member shall have the additional right, upon five (5) days written notice to the Non-Contributing Member (during which five (5) day period, except as expressly provided below, the Non-Contributing Member may prepay in whole or in part any Member Loan), to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution to the Company made by the Contributing Member in an amount equal to the outstanding Member Loan, in which case (i) the portion of the Capital Contribution (deemed made by the Non-Contributing Member as a result of the Member Loan) that corresponds to the outstanding portion of the Member Loan will be deemed null and void, (ii) the Contributing Member will be deemed to contribute the Substitute Capital Contribution to the Company as of the conversion date, and (iii) the Percentage Interest of each Member shall be adjusted as set forth below. In the event that either Member makes a Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum of (1) the aggregate of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributions, plus (2) one hundred and fifty percent (150%) of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to the contrary, for so long as the Existing Credit Facility is outstanding and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent of the other Member, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital Contribution; provided, however, that simultaneously with the conclusion of the Hypo Period, each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable Non-Contributing Member given on such date, and for the avoidance of doubt such Non-Contributing Member shall not have be treated as resigning from any and all positions with the right Company and shall immediately cause any and all of his or her or its designees or representatives to prepay such Member Loan prior to such conversionresign immediately from any and all positions held with the Company.

Failure to Make Capital Contributions. In (a) If, for any reason, a Member (the event that any Member “Defaulting Member”) fails to make any portion of its a Capital Contribution called pursuant under Section 3.1 (a “Default”), which Default continues for fifteen (15) days after notice from the Manager, the Member who has made, or is prepared to Section 4.1.4 above by the Cash Needs Date make, its contribution of such capital (such Member is referred to herein as the “Non-Contributing Member”, and the unfunded amount, as the “Unfunded Amount”), the other Member (the “Contributing defaulting Member”) may, upon notice but shall not be obligated to, make a Default Loan to the Non-Contributing Member, elect Defaulting Member in accordance with Sections 3.4(b) through (as its sole remedies): (a) within five (5) days following the Cash Needs Date, to terminate the Cash Needs Notice and immediately receive back from the Company any such additional Capital Contributions tendered by it; e). (b) to deliver funds to the Company equal to the Unfunded AmountThe Non-defaulting Member may, which delivery shall be deemed at its election, make a loan from the Contributing Member (a “Member Default Loan”) to the Non-Contributing Defaulting Member of all of the amount that is simultaneously contributed by the Defaulting Member was obligated to contribute to the Venture. The Defaulting Member hereby irrevocably authorizes and directs the Non-Contributing defaulting Member to advance the Companyproceeds of each Default Loan to the Venture. Receipt by the Venture of such proceeds shall constitute a Capital Contribution of, and which shall bear interest at the Member Loan Rate, and shall be repaid in accordance with the provisions of Article V or (c) make an additional Capital Contribution to the Company in an amount equal to the Unfunded Amount (a “Substitute Capital Contribution”). Additionally, at any time prior to the repayment in full of a Member Loan by the applicable Non-Contributing Member, the Contributing Member shall have the additional right, upon five (5) days written notice to the Non-Contributing Member (during which five (5) day period, except as expressly provided below, the Non-Contributing Member may prepay in whole or in part any Member Loan), to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution to the Company made by the Contributing Member in an amount equal to the outstanding Member Loan, in which case (i) the portion of the Capital Contribution (deemed loan made by the Non-Contributing defaulting Member as a result of to, the Member Loan) that corresponds Defaulting Member, and such Default Loan shall be legally enforceable to the same extent and in the same manner, subject to the terms of this Agreement, as if such proceeds were loaned directly to the Defaulting Member and contributed by the Defaulting Member to the Venture. The making of a Default Loan to the Defaulting Member shall not cure the default by the Defaulting Member. (c) Each Default Loan shall bear interest on the unpaid principal amount thereof from time to time outstanding portion from the date advanced until repaid, at the lesser of (i) six percent (6%) per annum plus the Member Loan will prime commercial lending rate that Citibank, N.A., New York announces from time to time to be deemed null in effect and void, (ii) the Contributing Maximum Rate permitted by Applicable Law, and all payments made thereon shall be applied first toward payment of unpaid accrued interest and then (if anything remains) toward payment of principal. Each Default Loan, both principal and interest, shall be due and payable from the Defaulting Member will be deemed to contribute the Substitute Capital Contribution to the Company as Non-defaulting Member who has made such loan upon demand by such Non-defaulting Member, and the Non-defaulting Member shall have and is hereby granted a first and prior lien and security interest upon the Interest of the conversion dateDefaulting Member and all amounts, payments and proceeds becoming distributable or payable by the Venture to such Defaulting Member to secure repayment of the Default Loan. (iiid) the Percentage Interest of each Member In no event shall be adjusted as set forth below. In the event that either Member makes a Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum of (1) the aggregate of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributionsinterest on a Default Loan, plus (2) one hundred and fifty percent (150%) of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to amounts paid in connection with the contraryDefault Loan that under Applicable Law would be deemed “interest,” ever exceed the maximum amount of interest which, for so long as the Existing Credit Facility is outstanding under Applicable Law, could be lawfully charged on such Default Loan. The Defaulting Member and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent of the other Member, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital Contribution; provided, however, that simultaneously with the conclusion of the Hypo Period, each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable Non-Contributing Member given on such date, and for the avoidance of doubt such Non-Contributing Member shall not have the right to prepay such Member Loan prior to such conversion.defaulting

Failure to Make Capital Contributions. 3.1.2.1. The Company shall be entitled to enforce the obligations of each Member to make Capital Contributions pursuant to Section 3.1.1. and the Company shall have all remedies available at law or in equity in the event any such Capital Contribution is not so made. 3.1.2.2. In the event that any a Member fails shall fail to timely make any portion of his, her or its Capital Contribution called when required pursuant to Section 4.1.4 above by the Cash Needs Date 3.1.1. of this Agreement (each such Member is being thereafter referred to herein as the “a '’Non-Contributing Member”", and such defaulted amount is hereinafter referred to as a "Failed Contributor"), and if a Non-Contributing Member shall not have timely cured his, her, or its Failed Contribution within ten (10) business days of receipt of written notice of such failure from the unfunded amount, as Manager(s) (the “Unfunded AmountCure Period”), then the other Member (Manager(s), on behalf of the “Contributing Member”) mayCompany, upon notice shall have the right to the purchase to all of a Non-Contributing Member's Interest for an amount up to to 100% of such Non-Contributing Member's Capital Account balance at such time. The Manager(s), elect (as its sole remedies): (a) within five (5) days following on behalf of the Cash Needs DateCompany, may exercise this right by providing written notice to terminate the Cash Needs Notice and immediately receive back from the Company any such additional Capital Contributions tendered by it; (b) to deliver funds to the Company equal to the Unfunded Amount, which delivery shall be deemed a loan from the Contributing Member (a “Member Loan”) to the Non-Contributing Member that is simultaneously contributed within thirty (30) from the end of the Cure Period and such written notice shall specify a date within sixty (60) days from the end of such thirty (30) day period when the repurchase shall be consummated. The Company may in its discretion pay all or a portion of the repurchase price for such Non-Contributing Member's Interest by setting off and canceling any indebtedness then owed by the Non-Contributing Member to the Company, and which shall bear interest at the Member Loan Rateit any, and shall be repaid in accordance with the provisions balance of Article V or (c) make an additional Capital Contribution the repurchase price to be paid In cash. If the Company in an amount equal elects to the Unfunded Amount (repurchase a “Substitute Capital Contribution”). Additionally, at any time prior to the repayment in full of a Member Loan by the applicable Non-Contributing Member's Interest, the Contributing Member shall have the additional right, upon five (5) days written notice to the Non-Contributing Member (during which five (5) day period, except as expressly provided below, the Non-Contributing Member may prepay in whole or in part any Member Loan), to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution to the Company made by the Contributing Member in an amount equal to the outstanding Member Loan, in which case (i) the portion of the Capital Contribution (deemed made by the Non-Contributing Member as a result of the Member Loan) that corresponds to the outstanding portion of the Member Loan will be deemed null and void, (ii) the Contributing Member will be deemed to contribute the Substitute Capital Contribution to the Company as of the conversion date, and (iii) the Percentage Interest of each Member shall be adjusted as set forth below. In the event that either Member makes a Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum of (1) the aggregate of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributions, plus (2) one hundred and fifty percent (150%) of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to the contrary, for so long as the Existing Credit Facility is outstanding and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent of the other Member, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital Contribution; provided, however, that simultaneously with the conclusion of the Hypo Period, each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable Non-Contributing Member given on such date, and for the avoidance of doubt such Non-Contributing Member shall not have be treated as resigning from any and all positions with the right Company and shall immediately cause any and all of his or her or its designees or representatives to prepay such Member Loan prior to such conversionresign immediately from any and all positions held with the Company.

Failure to Make Capital Contributions. In the event that any Member fails to make any portion of its Capital Contribution called pursuant to Section 4.1.4 above by the Cash Needs Date (such Member is referred to herein as the “Non-Contributing Member”, and the unfunded amount, as the “Unfunded Amount”), the other Member (the “Contributing Member”) may, upon notice to the Non-Contributing Member, elect (as its sole remedies): (a) within five (5) days following the Cash Needs Date, to terminate the Cash Needs Notice and immediately receive back from the Company any such additional Capital Contributions tendered by it; (b) to deliver funds to the Company equal to the Unfunded Amount, which delivery shall be deemed a loan from the Contributing Member (a “Member Loan”) to the Non-Contributing Member that is simultaneously contributed by the Non-Contributing Member to the Company, and which shall bear interest at the Member Loan Rate, and shall be repaid in accordance with the provisions of Article V or (c) make an additional Capital Contribution to the Company in an amount equal to the Unfunded Amount (a “Substitute Capital Contribution”). Additionally, at any time prior to the repayment in full of a Member Loan by the applicable Non-Contributing Member, the Contributing Member shall have the additional right, upon five (5) days written notice to the Non-Contributing Member (during which five (5) day period, except as expressly provided below, the Non-Contributing Member may prepay in whole or in part any Member Loan)Member, to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution to the Company made by the Contributing Member in an amount equal to the outstanding Member Loan, in which case (i) the portion of the Capital Contribution (deemed made by the Non-Contributing Member as a result of the Member Loan) that corresponds to the outstanding portion of the Member Loan will be deemed null and void, (ii) the Contributing Member will be deemed to contribute the Substitute Capital Contribution to the Company as of the conversion date, and (iii) the Percentage Interest of each Member shall be adjusted as set forth below. In the event that either Member makes a Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum of (1) the aggregate of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributions, plus (2) one hundred and fifty percent (150%) of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to the contrary, for so long as the Existing Credit Facility is outstanding and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent of the other Member, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital Contribution; provided, however, that simultaneously with the conclusion of the Hypo Period, each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable Non-Contributing Member given on such date, and for the avoidance of doubt such Non-Contributing Member shall not have the right to prepay such Member Loan prior to such conversion.

Failure to Make Capital Contributions. In the event that (a) If any Member fails to make any portion a contribution of its Additional Capital Contribution called required pursuant to Section 4.1.4 above by 4.2 on or prior to the Cash Needs Date contribution date specified in the applicable contribution notice, then a Member may send an additional notice (the “Default Notice”) to the Member failing to make such Capital Contribution, notifying the non-contributing Member of its failure to make such Capital Contribution, the amount to be contributed, the date such Capital Contribution was due, and requesting that such Capital Contribution be made immediately. If a Member fails to make such Capital Contribution within five Business Days after receiving such a Default Notice, then the Member failing to make such Capital Contribution shall be considered to have committed a default, and such Member shall be subject to the provisions of this Section 4.3(a) (such Member is referred to herein as the “Default Member” and the amount that such Member failed to contribute is referred to as the “Default Amount”) and the Member other than the Default Member (the “Non-Contributing Member”, and the unfunded amount, as the “Unfunded Amount”), the other Member (the “Contributing Defaulting Member”) may, upon notice shall have the right to the Non-Contributing Member, elect (as its sole remedies): (a) within five (5) days following the Cash Needs Date, to terminate the Cash Needs Notice and immediately receive back from the Company any such additional Capital Contributions tendered by it; (b) to deliver funds contribute an amount to the Company equal to the Unfunded Amount, which delivery Default Amount and the Members acknowledge and agree that any such contribution (a “Default Contribution”) made by a Non-Defaulting Member on behalf of a Default Member shall be deemed a loan from the Contributing Member (a “Member Loan”) to the Non-Contributing Member that is simultaneously contributed by the Non-Contributing Member to the Company, and which shall bear interest at the Member Loan Rate, and shall be repaid in accordance with the provisions of Article V or (c) make an additional Capital Contribution made by such Non-Defaulting Member to the Company in an amount equal to and upon making any such Default Contribution the Unfunded Amount (a “Substitute Capital Contribution”). Additionally, at any time prior to the repayment in full of a Member Loan by the applicable Non-Contributing Member, the Contributing Defaulting Member shall have the additional right, upon five (5) days written may elect by notice to the Non-Contributing Member Company to either (during which five (5i) day period, except as expressly provided below, increase the Undistributed Priority Capital of the Non-Contributing Defaulting Member may prepay in whole or in part any Member Loan), to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution to the Company made by the Contributing Member in an amount equal to the outstanding Member Loan, in which case (i) the portion of the Capital Default Contribution (deemed made by the Non-Contributing Member as a result of the Member Loan) that corresponds to the outstanding portion of the Member Loan will be deemed null and voidDefaulting Member, or (ii) adjust the Contributing Distribution Percentages of the Members pursuant to Section 4.3(b). If the Non-Defaulting Member does not give notice to the Company electing either option at the time the Non-Defaulting Member makes such Default Contribution, the Non-Defaulting Member shall be deemed to have elected to increase the Undistributed Priority Capital of the Non-Defaulting Member by the amount of such Default Contribution. (b) If the Non-Defaulting Member elects to adjust the Distribution Percentages of the Non-Defaulting Member and of the Default Member as provided in Section 4.3(a), effective as of the date the Default Contribution is made by the Non-Defaulting Member, the Distribution Percentage of the Default Member will be deemed to contribute the Substitute Capital Contribution to the Company as of the conversion date, and (iii) the Percentage Interest of each Member shall be adjusted as set forth below. In the event that either Member makes a Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted reduced to equal the fraction, represented as a percentage, percentage obtained by multiplying the numerator Capital Contribution Quotient of which is the sum of (1) Default Member by the aggregate of such Default Member’s Capital Contributions made to Distribution Percentage, and the Company other than Substitute Capital Contributions, plus (2) one hundred and fifty percent (150%) Non-Defaulting Member’s Distribution Percentage shall be increased by the amount of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all reduction of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to the contrary, for so long as the Existing Credit Facility is outstanding and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent of the other Default Member, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital Contribution; provided, however, that simultaneously with the conclusion of the Hypo Period, each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable Non-Contributing Member given on such date, and for the avoidance of doubt such Non-Contributing Member shall not have the right to prepay such Member Loan prior to such conversion’s Distribution Percentage.

Failure to Make Capital Contributions. In the event that (a) If, for any reason, a Member fails to make any portion of its Capital Contribution called pursuant to Section 4.1.4 above by the Cash Needs Date (such Member is referred to herein as the “Non-Contributing Funding Member”) (i) does not confirm in writing to the Manager its intent to make an additional Capital Contribution pursuant to Section 3.3 within thirty (30) days after the related Capital Call, or (ii) does not make its additional Capital Contribution within the later of (x) thirty-five (35) days after the related Capital Call (provided the condition described in the final sentence of Section 3.3(a) has been satisfied, if applicable) and (y) five (5) Business Days after such Member has received written notice that BH Redwood has funded its portion of the unfunded amountrequested Capital Contribution (each of the events described in clauses (i) and (ii), as the a “Unfunded AmountFunding Event”), the other Member who has made, or is prepared to make, its contribution of such capital (the “Contributing Funding Member”) may, upon notice at its election (unless the Funding Member has already made a Member Loan, in which case Section 3.3(b) shall govern rather than this sentence), and within thirty (30) days of such Funding Event (A) make a Member Loan to the Non-Contributing Member, elect (as its sole remedies): (a) within five (5) days following the Cash Needs Date, to terminate the Cash Needs Notice and immediately receive back from the Company any such additional Capital Contributions tendered by it; (b) to deliver funds to the Company equal to the Unfunded Amount, which delivery shall be deemed a loan from the Contributing Member (a “Member Loan”) to the Non-Contributing Member that is simultaneously contributed by the Non-Contributing Member to the Company, and which shall bear interest at the Member Loan Rate, and shall be repaid Venture in accordance with the provisions of Article V Section 3.4(b), or (cB) make an additional its Capital Contribution to the Company in an amount equal Venture pursuant to Section 3.3 and contribute additional Substitute Capital to the Unfunded Amount Subsidiary REIT in accordance with Section 3.4(c). (b) Upon the occurrence of a “Substitute Capital Contribution”). AdditionallyFunding Event, at any time prior the Funding Member may make a Member Loan to the Venture of the aggregate amount that each Member was requested to contribute to the Venture pursuant to Section 3.3. Each Member Loan shall be repaid by the Venture on a priority basis from available Net Cash Flow, including Net Cash Flow resulting from any sale or disposition of interests in the Subsidiary REIT or any other asset of the Venture. The Capital Account of the Funding Member shall not be credited with the amount of any Member Loan made by the Funding Member to the Venture, and the repayment in full of a Member Loan by the applicable Non-Contributing Venture shall not constitute a return of Capital Contributions or otherwise reduce the Capital Account of the Funding Member. Each Member Loan shall bear interest on the unpaid principal amount thereof from time to time outstanding from the date advanced until repaid, at six percent (6%) per annum plus the Prime Rate (compounded annually), and all payments made thereon shall be applied first toward payment of unpaid accrued interest and then (if anything remains) toward payment of principal. (c) Upon the occurrence of a Funding Event, the Contributing Funding Member shall have may contribute, or cause one or more of its Affiliates to contribute, the additional right, upon five amount (5the “Substitute Capital”) days written notice to that the Non-Contributing Funding Member (during which five (5) day period, except as expressly provided below, the Non-Contributing Member may prepay in whole or in part any Member Loan), was requested to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution contribute to the Company made by the Contributing Member in an amount equal Venture pursuant to the outstanding Member Loan, in which case (i) the portion of the Capital Contribution (deemed made Section 3.3. Unless otherwise agreed by the Non-Contributing Funding Member, the Funding Member as a result (or one or more of the Member Loanits Affiliates) that corresponds to the outstanding portion of the Member Loan will be deemed null and void, (ii) the Contributing Member will be deemed to shall contribute the Substitute Capital Contribution to the Company as Subsidiary REIT. In consideration of the conversion datecontribution of the Substitute Capital, and the Subsidiary REIT shall issue Shares to the Funding Member (iiior one or more of its Affiliates) contributing the Percentage Interest Substitute Capital based on the value of each Member the outstanding Shares of the Subsidiary REIT determined in accordance with this Section 3.4(c). The number of Shares to be issued by the Subsidiary REIT in consideration of the contribution of Substitute Capital shall equal the amount of such Substitute Capital divided by the value of a Share, which value shall be adjusted as set forth belowdetermined by the net asset value of the Subsidiary REIT, based upon the valuation of the Project specified in this Section 3.4(c) and the Subsidiary REIT’s interest in the Project and taking into account the fair value of any other assets and the liabilities of the Subsidiary REIT and the number of Shares outstanding immediately prior to the contribution of the Substitute Capital. In The value of the event Project shall be determined based on a valuation (or an update of the most recent valuation) that either Member makes a has been prepared within the three months preceding the contribution of the Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum of (1) the aggregate of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributions, plus (2) one hundred Subsidiary REIT and fifty percent (150%) made by an independent third-party appraiser at the cost of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to the contrary, for so long as the Existing Credit Facility is outstanding and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent of the other Member, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital ContributionVenture; provided, however, that simultaneously with if there has been any event that in the conclusion reasonable judgment of the Hypo PeriodManager has had a material effect (whether beneficial or adverse) on the Project since the date of such valuation, each Member a new valuation or an update of the most recent valuation shall be obtained for the valuation of the Project. (d) If the Manager fails to make any required Capital Contribution within the thirty-five (35) day period contemplated in Section 3.3(a) above, the related Capital Call shall be deemed to have been withdrawn, the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon Manager shall deliver prompt written notice to the applicable Non-Contributing Member given on MWP of such datewithdrawal, and for the avoidance any Capital Contributions of doubt such Non-Contributing Member MWP with respect thereto shall not have the right be returned promptly to prepay such Member Loan prior to such conversionMWP.

Failure to Make Capital Contributions. In (a) If, for any reason (other than, for the event that any Member fails avoidance of doubt, failure to make any portion of its Capital Contribution called pursuant to Section 4.1.4 above by satisfy the Cash Needs Date (such Member is referred to herein as the “Non-Contributing Member”, and the unfunded amount, as the “Unfunded Amount”conditions set forth in Sections 3.1 or 3.2), the other a Member (the “Contributing Defaulting Member”) fails to make a Capital Contribution under Section 3.1 (a “Default”), which Default continues for fifteen (15) days after notice from the Manager, the Member who has made, or is prepared to make, its contribution of such capital (the “Non‑defaulting Member”) may, upon notice but shall not be obligated to, make a Default Loan to the Non-Contributing Member, elect Defaulting Member in accordance with Sections 3.4(b) through (as its sole remedies): (a) within five (5) days following the Cash Needs Date, to terminate the Cash Needs Notice and immediately receive back from the Company any such additional Capital Contributions tendered by it; e). (b) to deliver funds to the Company equal to the Unfunded AmountThe Non‑defaulting Member may, which delivery shall be deemed at its election, make a loan from the Contributing Member (a “Member Default Loan”) to the Non-Contributing Defaulting Member of all of the amount that is simultaneously the Defaulting Member was obligated to contribute to the Venture. The Defaulting Member hereby irrevocably authorizes and directs the Non‑defaulting Member to advance the proceeds of each Default Loan to the Venture. Receipt by the Venture of such proceeds shall constitute a Capital Contribution of, and a loan made by the Non‑defaulting Member to, the Defaulting Member, and such Default Loan shall be legally enforceable to the same extent and in the same manner, subject to the terms of this Agreement, as if such proceeds were loaned directly to the Defaulting Member and contributed by the Non-Contributing Defaulting Member to the Company, and which Venture. The making of a Default Loan to the Defaulting Member shall not cure the default by the Defaulting Member. (c) Each Default Loan shall bear interest on the unpaid principal amount thereof from time to time outstanding from the date advanced until repaid, at the Member Loan Rate, and shall be repaid in accordance with the provisions lesser of Article V or (c) make an additional Capital Contribution to the Company in an amount equal to the Unfunded Amount (a “Substitute Capital Contribution”). Additionally, at any time prior to the repayment in full of a Member Loan by the applicable Non-Contributing Member, the Contributing Member shall have the additional right, upon five (5) days written notice to the Non-Contributing Member (during which five (5) day period, except as expressly provided below, the Non-Contributing Member may prepay in whole or in part any Member Loan), to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution to the Company made by the Contributing Member in an amount equal to the outstanding Member Loan, in which case (i) six percent (6%) per annum plus the portion of the Capital Contribution (deemed made by the Non-Contributing Member as a result of the Member Loan) prime commercial lending rate that corresponds Citibank, N.A., New York announces from time to the outstanding portion of the Member Loan will time to be deemed null in effect and void, (ii) the Contributing Maximum Rate permitted by Applicable Law, and all payments made thereon shall be applied first toward payment of unpaid accrued interest and then (if anything remains) toward payment of principal. Each Default Loan, both principal and interest, shall be due and payable from the Defaulting Member will to the Non‑defaulting Member who has made such loan upon demand by such Non‑defaulting Member, and the Non‑defaulting Member shall have and is hereby granted a first and prior lien and security interest upon the Interest of the Defaulting Member and all amounts, payments and proceeds becoming distributable or payable by the Venture to such Defaulting Member to secure repayment of the Default Loan. (d) In no event shall the aggregate of the interest on a Default Loan, plus any other amounts paid in connection with the Default Loan that under Applicable Law would be deemed “interest”, ever exceed the maximum amount of interest which, under Applicable Law, could be lawfully charged on such Default Loan. The Defaulting Member and Non‑defaulting Member making the Default Loan specifically intend and agree to limit contractually the interest payable on each Default Loan to not more than an amount determined as being at the Maximum Rate. Therefore, none of the terms of a Default Loan or any other instruments pertaining to or securing a Default Loan shall ever be construed to create a contract to pay interest at a rate in excess of the Maximum Rate, and neither the Defaulting Member nor any other party liable therefor shall ever be liable for interest in excess of that determined as being at the Maximum Rate. The provisions of this Section 3.4(d) shall control over all provisions of or respecting a Default Loan and of any other instruments pertaining to or securing a Default Loan. If any amount of interest taken or received by the Non‑defaulting Member shall be in excess of the maximum amount of interest that, under Applicable Law, could lawfully have been collected on a Default Loan, then the excess shall be deemed to contribute have been the Substitute Capital Contribution result of a mathematical error by the parties hereto and shall be refunded promptly to the Company as Defaulting Member. All amounts paid or agreed to be paid in connection with the indebtedness evidenced by a Default Loan that would under Applicable Law be deemed “interest” shall, to the extent permitted by Applicable Law, be amortized, prorated, allocated, and spread throughout the full term of such Default Loan. “Applicable Law” means the law in effect from time to time and applicable to a Default Loan that permits the charging and collection of the conversion datehighest permissible lawful nonusurious rate of interest on a Default Loan, and (iii) including laws of the Percentage Interest United States of each Member America and, to the extent applicable to a given Default Loan, laws of the State of Texas. It is intended that Chapter 303 of the Texas Finance Code, as amended, shall be adjusted as set forth below. In included in the event that either Member makes a Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum of (1) the aggregate of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributions, plus (2) one hundred and fifty percent (150%) laws of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon State of Texas in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amountsdetermining Applicable Law; and the denominator of which is the aggregate of all Capital Contributions made by all of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to the contrary, for so long as the Existing Credit Facility is outstanding and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent of the other Member, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital Contribution; provided, however, that simultaneously with the conclusion of the Hypo Period, each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable Non-Contributing Member given on such date, and for the avoidance purpose of doubt such Non-Contributing Member shall not have applying said Chapter 303 to a Default Loan, the right to prepay such Member Loan prior interest ceiling applicable to such conversionDefault Loan under said Chapter 303 shall be the rate determined under Section 303.001, et seq. of the Texas Finance Code. “Maximum Rate” means the maximum lawful nonusurious rate of interest (if any) that under Applicable Law the Non‑defaulting Member is permitted to charge the Defaulting Member on a Default Loan from time to time.

Failure to Make Capital Contributions. In If a Member (the event that any Member "FAILING MEMBER") fails to make any portion contribute on a timely basis its full proportionate share of its a Capital Contribution called pursuant it is required to Section 4.1.4 above by the Cash Needs Date (such Member is referred to herein as the “Non-Contributing Member”make under this Agreement, and the unfunded amount, as the “Unfunded Amount”), if the other Member (the “Contributing "NON-FAILING MEMBER") contributes on a timely basis its full proportionate share of such Capital Contribution, then the Non-Failing Member may provide written notice to the Failing Member of the Failing Member”'s default. If the Failing Member fails to contribute its full proportionate share of such Capital Contribution within ten (10) maydays of such written notice, upon notice then the Non-Failing Member shall have the following rights and options, none of which shall be exclusive of the other or of any other right or remedy available to the Non-Contributing MemberFailing Member hereunder or at law or equity: (i) the Non-Failing Member may, elect (as its sole remedies): (a) within five (5) days following the Cash Needs Datebut need not, to terminate the Cash Needs Notice and immediately receive back from require the Company any such additional Capital Contributions tendered by it; (b) to deliver funds to the Company equal to the Unfunded Amount, which delivery shall be deemed a loan from the Contributing Member (a “Member Loan”) repay immediately to the Non-Contributing Failing Member all or any portion of the amount contributed by 21 the Non-Failing Member that is simultaneously disproportionately (based on the required percentage contribution) in excess of the amount (if any) the Failing Member contributed by to the Company pursuant to the relevant notice, together with actual earnings thereon accruing to the benefit of the Company, if any, until such amount is repaid; (ii) the Non-Contributing Failing Member to the Companymay, and which shall bear interest at the Member Loan Ratebut need not, and shall be repaid in accordance with the provisions of Article V or (c) make an additional Capital Contribution to the Company in an amount equal to the Unfunded Amount (a “Substitute Capital Contribution”)"DELINQUENCY ADVANCE") not in excess of the amount the Failing Member failed to contribute. Additionally, at any time prior to the repayment in full of a Member Loan by the applicable Non-Contributing Member, the Contributing Member shall have the additional right, upon five (5) days written notice to If the Non-Contributing Failing Member (during which five (5) day periodmakes such Delinquency Advance, except as expressly provided below, the amount thereof shall be credited to the Capital Account of the Non-Contributing Failing Member may prepay in whole or in part any Member Loan), to elect to convert the outstanding Member Loan, including any interest accrued thereon, into for all purposes of this Agreement and treated as a Substitute Capital Contribution to the Company made by the Contributing Member in an amount equal to the outstanding Member Loan, in which case (i) the portion for all purposes of the Capital Contribution (deemed made by the Non-Contributing Member as a result of the Member Loan) that corresponds to the outstanding portion of the Member Loan will be deemed null and void, (ii) the Contributing Member will be deemed to contribute the Substitute Capital Contribution to the Company as of the conversion datethis Agreement, and the Members' Percentage Interests shall be recalculated by reference to their relative cumulative Capital Contributions; and (iii) the Percentage Interest of each Member shall be adjusted as set forth below. In the event that either Member makes a Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum of (1) the aggregate of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributions, plus (2) one hundred and fifty percent (150%) of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to the contrary, for so long as the Existing Credit Facility is outstanding and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Failing Member may freely prepay such Member Loan)may, no Member may prepay any Member Loan without the consent of the other Memberbut need not, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital Contribution; provided, however, that simultaneously with the conclusion of the Hypo Period, each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable NonBuy-Contributing Member given on such date, and for the avoidance of doubt such Non-Contributing Member shall not have the right to prepay such Member Loan prior to such conversionSell Offer under Section 20.

Failure to Make Capital Contributions. In the event that (a) If, for any reason, a Member fails to make any portion of its Capital Contribution called pursuant to Section 4.1.4 above by the Cash Needs Date (such Member is referred to herein as the “Non-Contributing Funding Member”) (i) does not confirm in writing to the Manager its intent to make an additional Capital Contribution pursuant to Section 3.3 within thirty (30) days after the related Capital Call, or (ii) does not make its additional Capital Contribution within the later of (x) thirty-five (35) days after the related Capital Call (provided the condition described in the final sentence of Section 3.3(a) has been satisfied, if applicable) and (y) five (5) Business Days after such Member has received written notice that BH Waterford has funded its portion of the unfunded amountrequested Capital Contribution (each of the events described in clauses (i) and (ii), as the a “Unfunded AmountFunding Event”), the other Member who has made, or is prepared to make, its contribution of such capital (the “Contributing Funding Member”) may, upon notice at its election (unless the Funding Member has already made a Member Loan, in which case Section 3.3(b) shall govern rather than this sentence), and within thirty (30) days of such Funding Event make its Capital Contribution to the Venture pursuant to Section 3.3 and (A) make a Member Loan to the Venture in accordance with Section 3.4(b), or (B) contribute additional Substitute Capital to the Subsidiary REIT in accordance with Section 3.4(c). (b) Upon the occurrence of a Funding Event, the Funding Member may make a Member Loan to the Venture in the amount that the Non-Funding Member was requested to contribute to the Venture pursuant to Section 3.3. Each Member Loan shall be repaid by the Venture on a priority basis from available Net Cash Flow that would otherwise be distributed to the Non-Contributing Funding Member, elect (as its sole remedies): (a) within five (5) days following including Net Cash Flow resulting from any sale or disposition of interests in the Cash Needs DateSubsidiary REIT, to terminate any Sub-Sub REIT or any other asset of the Cash Needs Notice and immediately receive back from Venture. The Capital Account of such Funding Member shall not be credited with the Company amount of any Member Loan made by such additional Capital Contributions tendered by it; (b) to deliver funds to the Company equal to the Unfunded Amount, which delivery shall be deemed a loan from the Contributing Member (a “Member Loan”) to the Non-Contributing Member that is simultaneously contributed by the Non-Contributing Funding Member to the CompanyVenture, and which shall bear interest at the Member Loan Rate, and shall be repaid in accordance with the provisions of Article V or (c) make an additional Capital Contribution to the Company in an amount equal to the Unfunded Amount (a “Substitute Capital Contribution”). Additionally, at any time prior to the repayment in full of a Member Loan by the applicable Non-Contributing Venture shall not constitute a return of Capital Contributions or otherwise reduce the Capital Account of such Funding Member. Each Member Loan shall bear interest on the unpaid principal amount thereof from time to time outstanding from the date advanced until repaid, at six percent (6%) per annum plus the Prime Rate (compounded annually), and all payments made thereon shall be applied first toward payment of unpaid accrued interest and then (if anything remains) toward payment of principal. (c) Upon the occurrence of a Funding Event, the Contributing Funding Member shall have may contribute, or cause one or more of its Affiliates to contribute, the additional right, upon five amount (5the “Substitute Capital”) days written notice to that the Non-Contributing Funding Member (during which five (5) day period, except as expressly provided below, the Non-Contributing Member may prepay in whole or in part any Member Loan), was requested to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution contribute to the Company made by the Contributing Member in an amount equal Venture pursuant to the outstanding Member Loan, in which case (i) the portion of the Capital Contribution (deemed made Section 3.3. Unless otherwise agreed by the Non-Contributing Funding Member, the Funding Member as a result (or one or more of the Member Loanits Affiliates) that corresponds to the outstanding portion of the Member Loan will be deemed null and void, (ii) the Contributing Member will be deemed to shall contribute the Substitute Capital Contribution to the Company as Subsidiary REIT. In consideration of the conversion datecontribution of the Substitute Capital, the Subsidiary REIT shall issue Shares to the Funding Member (or one or more of its Affiliates) contributing the Substitute Capital based on the value of the outstanding Shares of the Subsidiary REIT attributable to the Project(s) to which the underlying Funding Event relates as determined in accordance with this Section 3.4(c). The number of Shares to be issued by the Subsidiary REIT in consideration of the contribution of Substitute Capital shall equal the amount of such Substitute Capital divided by the value of a Share of the Subsidiary REIT, which value shall be determined by the net asset value of the Subsidiary REIT, based upon the valuation of such Project specified in this Section 3.4(c) and the Subsidiary REIT’s interest in the Sub-Sub REIT holding such Project and taking into account the fair value of any other assets and the liabilities of the Subsidiary REIT (iiiincluding the other Projects) and the Percentage Interest number of Shares of the Subsidiary REIT outstanding immediately prior to the contribution of the Substitute Capital. The value of each Member Project shall be adjusted as set forth below. In determined based on a valuation (or an update of the event most recent valuation) that either Member makes a has been prepared within the three months preceding the contribution of the Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum of (1) the aggregate of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributions, plus (2) one hundred Subsidiary REIT and fifty percent (150%) made by an independent third-party appraiser at the cost of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all of the Members, including any Substitute Capital Contributions. For purposes of illustration only, Schedule 4.2 contains hypothetical examples of the application of the dilution formula described above. Notwithstanding the foregoing or any other provision hereof to the contrary, for so long as the Existing Credit Facility is outstanding and its terms prohibit the making of a Substitute Capital Contribution or the conversion of a Member Loan into a Substitute Capital Contribution (such period, the “Hypo Period”), (i) except during the five (5) day period following the making of a Member Loan (during which period, for avoidance of doubt, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent of the other Member, and (ii) no Member shall have the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital ContributionVenture; provided, however, that simultaneously with if there has been any event that in the conclusion reasonable judgment of the Hypo PeriodManager has had a material effect (whether beneficial or adverse) on such Project since the date of such valuation, a new valuation or an update of the most recent valuation shall be obtained for the valuation of such Project. (d) If the Manager fails to make any required Capital Contribution within the thirty-five (35) day period contemplated in Section 3.3(a) above, the related Capital Call shall be deemed to have been withdrawn, the Manager shall deliver prompt written notice to each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable Non-Contributing Member given on of such datewithdrawal, and for the avoidance any Capital Contributions of doubt such Non-Contributing Member other Members with respect thereto shall not have the right to prepay such Member Loan prior be returned promptly to such conversionother Members.

Failure to Make Capital Contributions. A. In the event that any Member fails the Members are required to make any portion of its Capital Contribution called Contributions pursuant to Section 4.1.4 this Article II (all of the above by the Cash Needs Date (such Member is being referred to herein as the “Required Capital Contributions”), and in any such case a Member (a “Non-Contributing Member”, and the unfunded amount, as ) has defaulted in its obligation to contribute all or a portion of its share (the “Unfunded Defaulted Amount”)) of such Required Capital Contribution within five (5) Business Days of the date on which such Required Capital Contribution was due, then the other Member (the “Contributing Member”) mayshall have the right, at its election, to either (i) contribute all or a portion of the Defaulted Amount as an additional Capital Contribution (a “Coverage Contribution”), or (ii) elect to withdraw its Capital Contribution (or the appropriate portion thereof if the other Member contributed a portion, but not all, of its Required Capital Contribution) from the Company. Any remedy under clause (i) or (ii) shall be exercised within sixty (60) days after the date on which the Required Capital Contribution giving rise to the Defaulted Amount was due. The remedies specified in this Section 2.4 are the exclusive rights and remedies of the Contributing Member, and shall be in lieu of any rights and remedies which a Contributing Member might otherwise have at law or in equity as to any default by a Member in making a Required Capital Contribution under Section 2.3. B. In the event a Contributing Member makes a Coverage Contribution on account of any Required Capital Contribution which is disproportionate to the amount contributed by the other Member on account of such Required Capital Contribution then, automatically upon notice the making of such Coverage Contribution, a dilution of a portion of the Non-Contributing Member’s Percentage Interest (and a shift to the Contributing Member of said portion of the Percentage Interest of the Non-Contributing Member) shall be effected as follows: the Percentage Interest of the Contributing Member shall be adjusted upwards to an amount, expressed as a percentage, equal to “A” divided by “B”, where “A” equals the then aggregate Capital Contributions of the Contributing Member (including any amounts advanced by the Contributing Member on account of its Percentage Interest of the applicable Required Capital Contribution, but not including the Coverage Contribution then made by such Contributing Member on behalf of the Non-Contributing Member), plus two times the amount of the Coverage Contribution then made by such Contributing Member on behalf of the Non-Contributing Member, elect (as its sole remedies): (a) within five (5) days following and where “B” is the Cash Needs Date, to terminate the Cash Needs Notice and immediately receive back from the Company any such additional total aggregate Capital Contributions tendered of all the Members (including any amounts advanced by it; (b) to deliver funds to the Company equal to the Unfunded Amount, which delivery shall be deemed a loan from the Contributing Member (a “on account of its Percentage Interest of the applicable Required Capital Contribution as well as the Coverage Contribution then made by such Contributing Member Loan”) to on behalf of the Non-Contributing Member). The Percentage Interest of the Non-Contributing Member that shall be reduced by the amount by which the Percentage Interest of the Contributing Member is simultaneously contributed by increased in accordance with the foregoing formula. The aggregate Capital Contributions and Capital Account of the Contributing Member shall be increased, and the aggregate Capital Contributions and Capital Account of the Non-Contributing Member to the Company, and which shall bear interest at the Member Loan Rate, and shall be repaid correspondingly decreased, so as to be in proportion to their respective Percentage Interests (as increased and reduced in accordance with the provisions of Article V or (c) make an additional Capital Contribution to the Company in an amount equal to the Unfunded Amount (a “Substitute Capital Contribution”foregoing). AdditionallyAn example of the application of this paragraph is set forth on Schedule “Dilution Example”. For all purposes of this Section 2.4, at any time prior to “disproportionate to” means the repayment in full excess of a Member Loan by the applicable Non-Contributing Member, the Contributing Member shall have the additional right, upon five (5) days written notice to the Non-Contributing Member (during which five (5) day period, except as expressly provided below, the Non-Contributing Member may prepay in whole or in part any Member Loan), to elect to convert the outstanding Member Loan, including any interest accrued thereon, into a Substitute Capital Contribution to the Company made amounts advanced by the Contributing Member in an amount equal as to any particular Required Capital Contribution over the outstanding Member Loan, in which case (i) the portion product of the Capital Contribution (deemed made amount, if any, advanced by the Non-Contributing Member as a result of the Member Loan) that corresponds to the outstanding portion of the Member Loan will be deemed null and void, (ii) the Contributing Member will be deemed to contribute the Substitute such Required Capital Contribution to the Company as of the conversion date, and (iii) the Percentage Interest of each Member shall be adjusted as set forth below. In the event that either Member makes multiplied by a Substitute Capital Contribution or elects to convert a Member Loan into a Substitute Capital Contribution, the Percentage Interest of each Member shall be adjusted to equal the fraction, represented as a percentage, the numerator of which is the sum then Percentage Interest of (1) the aggregate of such Member’s Capital Contributions made to the Company other than Substitute Capital Contributions, plus (2) one hundred and fifty percent (150%) of the aggregate Substitute Capital Contributions made by such Member (with respect to the current Cash Needs Notice and all previous Cash Needs Notices), minus (3) with respect to all Unfunded Amounts (or applicable portions thereof) that such Member failed to contribute (with respect to the current Cash Needs Notice and all previous Cash Needs Notices) and that were funded by the Contributing Member as Substitute Capital Contributions (including any accrued interest thereon in the case of Member Loans converted into Substitute Capital Contributions), fifty percent (50%) of such Unfunded Amounts; and the denominator of which is the aggregate of all Capital Contributions made by all then Percentage Interest of the MembersNon-Contributing Member. If the above calculation results in a Member’s Percentage Interest being reduced to zero percent (0%) or less, including then such Member shall automatically and without further action cease being a Member and cease having any Substitute Capital Contributionsrights whatsoever pursuant to this Agreement or otherwise as a member. For purposes of illustration only, Schedule 4.2 contains hypothetical examples Any adjustments in Percentage Interests pursuant to this Section 2.4.B. (or the completion of the application of purchase if the dilution formula described above. Notwithstanding the foregoing or any other provision hereof option to purchase pursuant to the contrary, for so long as immediately preceding paragraph is exercised) shall be automatic and without the Existing Credit Facility is outstanding and its terms prohibit necessity of any action beyond the making of a Substitute Capital Coverage Contribution or by a Contributing Member as to any Defaulted Amount. Notwithstanding the conversion foregoing, in the event that the provisions of this Section 2.4.B. apply from the Effective Date and until the Put/Call Outside Date, dilution will be calculated but will not be effective during such period. On the Put/Call Outside Date, in the event that both Beacon Member and ▇▇▇▇▇▇ Member remain as Members, such dilution shall be automatically effective with no further action. C. The Members acknowledge and agree that the remedy provisions provided for in this Section 2.4 could result in a Member Loan into a Substitute completely forfeiting its Interest. Each Member acknowledges and agrees that in the event either Member fails to make its Required Capital Contribution (such periodContributions, the “Hypo Period”)Company and the other Member will suffer substantial damages, (i) except during and the five (5) day period following remedy provisions set forth in this Section 2.4 are fair, just and equitable in all respects and administratively superior to any other method for determining such damages. Each Member hereby agrees that in the making of a Member Loan (during event its Interest is changed as provided in this Section 2.4, it shall execute and deliver such conveyances, agreements, instruments or other documents, and take such additional actions, which periodmay be necessary, for avoidance of doubtin the reasonable, the applicable Non-Contributing Member may freely prepay such Member Loan), no Member may prepay any Member Loan without the consent good faith discretion of the other Member, to confirm and (ii) no Member shall have render fully effective the right to make a Substitute Capital Contribution or deliver notice of its intention to convert any Member Loan into a Substitute Capital Contribution; provided, however, that simultaneously with the conclusion of the Hypo Period, each Member shall have the right to convert any outstanding Member Loan into a Substitute Capital Contribution, upon notice to the applicable Non-Contributing Member given on such date, and for the avoidance of doubt such Non-Contributing Member shall not have the right to prepay such Member Loan prior to such conversionremedy provisions set forth in this Section 2.4.