(a) Any Member that fails to make its Regulatory Capital Contribution on or before the payment date identified in the Regulatory Call Notice or any Member that elects to be a Participating Member but subsequently fails to make its Voluntary Capital Contribution on or before the payment date identified in the Voluntary Call Notice, as applicable, shall be
considered a “Non-Funding Member” (the amount of any such subscription amount owed to the Company, the “Requested Amount”). The Requested Amount shall bear interest payable to the Company equal to the Default Interest Rate, from and after the payment date identified in the Regulatory Call Notice or the Voluntary Call Notice, as applicable, and until such non-payment has been cured by the Non-Funding Member or the Non-Funded Interest has been purchased by another Member or other Person pursuant to Section 4.5(b). Any interest paid by a Non-Funding Member pursuant to this Section 4.5(a) shall not be treated as a Capital Contribution but shall be treated as interest income of the Company.
(b) In addition to, and not in limitation of, the foregoing, upon thirty (30) days written notice by the Company to any Member that becomes a Non-Funding Member (and provided that such non-payment has not been cured by the Non-Funding Member within such 30-day period), the Board, in its sole discretion, may:
(i) sell to any of the other Members, on a pro rata basis in accordance with their respective Economic Common Interest Percentages, all or any portion of (A) in the case of a Voluntary Capital Call, the Common Interests that the Non-Funding Member would have received had the Requested Amount been paid in full and (B) in the case of a Regulatory Capital Call, the amount of Common Interests corresponding to the Requested Amount (in both cases, the “Non-Funded Interests”); or
(ii) in the event that the entire amount of Non-Funded Interests of the Non- Funding Member is not acquired by the Members pursuant to clause (i) above, so notify the Members and designate one or more Persons (subject to the agreement of such Person(s)), which Person(s) may be Members, to acquire all or any portion of the Non-Funding Member’s Non- Funded Interests not so acquired;
provided that (A) any purchase of such Non-Funded Interests by any Member, in whole or in part, shall be treated as a Transfer to such Member by the Non-Funding Member and shall be subject to Section 11.2(b); (B) any purchase of such Non-Funded Interests by a Person who is not a Member shall be treated as a Transfer by the Non-Funding Member to such Person and shall be subject to Sections 7.3, 10.4, 11.1(c), 11.1(d), 11.2(b) and 11.2(d); (C) the aggregate number of Non-Funded Interests, for purposes of this Section 4.5(b), shall be equal to the quotient of (i) the Requested Amount divided by (ii) the relevant Per Common Interest FMV; (D) with respect to a Regulatory Capital Call, (I) the Capital Account of each Member that is not a Non-Funding Member shall be increased by the sum of (x) its Regulatory Capital Contribution plus (y) the amount of the Regulatory Capital Contribution attributable to the Non-Funded Interests acquired by such Member and (II) each Member that is not a Non-Funding Member shall be entitled to receive a number of new Class A Common Interests or Class B Common Interests, as applicable, equal to the quotient of (i) such Member’s Regulatory Capital Contribution divided by (ii) the applicable Per Common Interest FMV (and such Member’s Voting Common Interest Percentage and Economic Common Interest Percentage shall be increased accordingly); and (E) each Member that acquires Non-Funded Interests shall be entitled to receive a number of new Class A Common Interests or Class B Common Interests, as applicable, in addition to those Common Interests issued to such Member pursuant to Section 4.4(e) or clause (D) above, as applicable, equal to the quotient of (i) that portion of the Requested Amount paid by such Member to acquire Non-Funded Interests divided by (ii) the applicable Per Common Interest FMV (and such Member’s Voting Common Interest Percentage and Economic Common Interest Percentage shall be increased accordingly).
A copy of any notice provided to a Non-Funding Member pursuant to this Section 4.5(b) shall be transmitted promptly to all other Members. In the event that a Non-Funding Member shall pay any overdue Voluntary Capital Contribution or Regulatory Capital Contribution, plus interest in accordance with Section 4.3(a) or Section 4.4(a), as applicable, prior to the expiration of the above-referenced thirty (30)-day notice period, such Member shall cease to be a Non-
Funding Member and the remedies provided in this Section 4.5(b) and in Section 4.5(d) shall not be available with respect thereto.
(c) A Member shall indemnify, hold harmless and reimburse the Company for any and all reasonable out-of-pocket costs and expenses incurred by the Company (including with respect to obtaining any replacement capitalization) as a result of such Member’s failure to pay any Requested Amount.
(d) In addition to, or in lieu of, and not in limitation of any of the foregoing, upon termination of the thirty (30)-day period provided in Section 4.5(b), the Board, in its sole
discretion, may commence proceedings against the Non-Funding Member to collect any due and unpaid portions of the Non-Funding Member’s Requested Amount plus interest in accordance with Section 4.5(a), and the expenses of such collection, including court costs and attorneys’ fees and disbursements.
(e) Any actions taken by the Board or the Company pursuant to Sections 4.5(a) through 4.5(d) shall be in addition to and not in limitation of any other right or remedies that the Company may have against the Non-Funding Member.
4.6 Membership Interests. Interests shall for all purposes be personal property. No