Common use of Allocation of Withholding Taxes and Certain Other Expenditures Clause in Contracts

Allocation of Withholding Taxes and Certain Other Expenditures. (a) If the Company incurs a withholding tax or other tax obligation (including, for the avoidance of doubt, any tax withheld from the Company or paid over by the Company, in each case, directly or indirectly, with respect to or on behalf of a Member, and interest, penalties and/or any additional amounts with respect thereto, including, without limitation, (i) a tax that is determined based on the status, action or inaction (including the failure of a Member (or a holder of a beneficial interest in such Member) to provide information to eliminate or reduce withholding or other taxes of a Member (or a holder of a beneficial interest in such Member), or (ii) an “imputed underpayment” within the meaning of Section 6225 of the Code and any other similar tax, attributable to a Member (or a holder of a beneficial interest in such Member), as determined by the Manager in its discretion)) with respect to the portion of the income of the Company allocable to any Member or former Member, then the Manager, without limitation of any other rights of the Company or the Manager, shall cause the amount of such obligation to be debited against the Capital Account of such Member as of the close of the Fiscal Period during which the Company pays such obligation. If the amount of such taxes is greater than such Capital Account balance, then such Member or former Member and any successor to such Member’s Interest shall pay to the Company as a contribution to capital, upon demand, the amount of such excess. Any such withholding or other taxes related to specific Members shall be treated as a distribution to such Members and shall not be included as an expense of the Company for purposes of calculating Net Capital Appreciation or Net Capital Depreciation. Furthermore, such taxes will not be deducted as an expense of the Company for the relevant period in which such taxes were incurred for purposes of calculating the Advisory Fee and Incentive Allocation due with respect to such Member. Neither the Manager nor the Company shall be obligated to apply for or obtain a reduction of or exemption from withholding tax on behalf of any Member that may be eligible for such reduction or exemption. This Section 3.5(a) shall survive the withdrawal of any Member or termination of the Company.