Common use of Governmental Withholding Clause in Contracts

Governmental Withholding. In the event the Company is required to deduct and withhold, pursuant to the Code or any other federal, state or local law, foreign governmental, or other rule or regulation which is currently in effect or which may be promulgated hereafter (“Applicable Law”), any amount from an actual Distribution to a Member or Transferee, the amount so deducted and withheld from such Distribution shall, for all purposes of this Agreement, be treated as a Distribution to such Member or Transferee of the same type as the Distribution giving rise to the obligation. In the event applicable law requires the Company to pay or withhold any amount on behalf of a Member (including any federal, state, local or foreign taxes) measured by a Member’s Distributive Share of the Company’s Net Profits, gain or any other Company item, other than any amount required to be deducted and withheld from actual Distributions to a Member, then the payment or withholding of any such amount shall be considered a loan (“Tax Loan”) by the Company to such Member (the “Borrowing Member”). The Borrowing Member shall repay any such Tax Loan within thirty (30) days after the Managers (or if the Managers fail to do so, any Member) delivers a written demand therefor, together with interest at an annual rate equal to one percent (1%) per annum in excess of the rate announced from time to time in the Wall Street Journal as the “prime rate” from the date such loan was made until the date of the repayment thereof. In addition to any other rights of the Company to enforce its entitlement to receive payment of the Tax Loan, plus any accrued interest thereon, the Company may deduct from any Distribution to be made to a Borrowing Member an amount not greater than the outstanding balance of any Tax Loan, plus any accrued interest thereon, as a payment in total or partial satisfaction thereof.

Governmental Withholding. The Board shall cause the Company to comply with any and all tax withholding obligations to which the Company is subject. In the event the Company is required to deduct and withhold, pursuant to the Code or any other federal, state or local law, foreign governmental, or other rule or regulation which is currently in effect or which may be promulgated hereafter (“Applicable Law”), any amount from an actual Distribution distribution to a Member or TransfereeMember, the amount so deducted and withheld from such Distribution distribution shall, for all purposes of this Agreement, be treated as a Distribution distribution to such Member or Transferee of the same type as the Distribution distribution giving rise to the obligation. In the event applicable law Applicable Law requires the Company to pay or withhold any amount on behalf of a Member (including any federal, state, state or local or foreign taxes) measured by a Member’s Distributive Share distributive share of the Company’s Net Profits, gain Profits or any other items of Company itemincome or gain, other than any amount required to be deducted and withheld from actual Distributions distributions to a Member, then the payment or withholding of any such amount shall be considered a loan (“Tax Loan”) by the Company to such Member (the “Borrowing Member”). The Borrowing Member shall repay any such Tax Loan within thirty (30) days after the Managers Board (or if the Managers fail Board fails to do so, any Member) delivers a written demand therefor, together with interest at an a fluctuating annual rate equal to one percent (1%) per annum in excess the publicly announced prime rate of the rate announced from time to time in the The Wall Street Journal as the “prime rate” plus two (2%) percent, from the date such loan was made until the date of the repayment thereof. In addition to any other rights of the Company to enforce its entitlement to receive payment of the Tax Loan, plus any accrued interest thereon, the Company may deduct from any Distribution distribution to be made to a Borrowing Member an amount not greater than the outstanding balance of any Tax Loan, plus any accrued interest thereon, as a payment in total or partial satisfaction thereof.