Common use of Withholding Obligations Clause in Contracts

Withholding Obligations. 4.10.1 If the Company is required (as determined by the Administrative Manager) to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation of the Company or the Managers to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 by offset to a Distribution to a Member, either (i) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset or (ii) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offset. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (i) above, such retained Property may, in the discretion of the Administrative Manager, either (A) be distributed to the other Members, or (B) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property is sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 1. If and to the extent the Company is required by law, including FATCA, (as determined in good faith by the Administrative Manager) to make a payment payments (“Tax PaymentPayments”) with respect to any Member in amounts required to discharge any legal obligation of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreignstate, state local or local foreign tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, then the amount of any such Tax Payment Payments shall be deemed to be a loan by the Company to such Member, which loan shall shall: (i) be secured by such Member’s interest in the Company, (ii) bear interest at the Prime Rate prime rate determined by the Company’s bank, and (iii) be payable upon demand demand. The Manager may elect to withhold any or by offset all distributions to any Distribution which otherwise would be made to such Member pursuant to Article 7 or Article 10 and offset the principal amount of any such loan and accrued interest thereon against any such distributions withheld. Amounts paid in respect of interest on such loan shall be treated as Profit of the Company and shall not be treated as a capital contribution by such Member. 4.10.2 2. If and to the extent the Company is required to make any Tax Payment Payments with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 by offset to a Distribution distribution to a Member, either (i) such Member’s proportionate share of such Distribution distribution shall be b e reduced by the amount of such Tax Payment or offset Payments ( provided that such Member’s Capital Account shall be adjusted pursuant to the terms of this Agreement for such Member’s full proportionate share of the distribution), or (ii) such Member shall promptly pay to the Company prior to such Distribution distribution an amount of cash equal to such Tax Payment or offsetPayments. In the event a portion of a Distribution distribution in kind is retained by the Company pursuant to clause (i) above), such retained Property Securities may, in the sole discretion of the Administrative Manager, either (A1) be distributed to the other MembersMembers in accordance with the terms of this Agreement, or (B2) be sold by the Company to generate the cash necessary to satisfy such Tax PaymentPayments. If the Property is Securities are sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from on such sale or exchange shall be allocated to the Member to whom the Tax Payment relatesPayments relate. 3. If E ac h Member will, as applicable, take such actions as are required to establish to the Property reasonable satisfaction of the Manager that such Member is sold at a gain(i) not subject to the withholding tax obligations imposed by Section 1471 of the Code and (ii) not subject to withholding tax obligations imposed by Section 1472 of the Code. In addition, each Member will assist the Company and the Manager with any applicable information reporting or other obligation imposed on the Company, the Manager, or their respective Affiliates, pursuant to the FATCA. As used herein, “FATCA” means the Foreign Account Tax Compliance provisions enacted as part of the U.S. Hiring Incentives to Restore Employment Act and codified in Sections 1471 through 1474 of the Code, all rules, regulations and other guidance issued thereunder, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Paymentall administrative and judicial interpretations thereof. 4.10.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 4.12.1 If the Company is required (as determined by the Administrative Manager) to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 4.12.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 4.12.1 by offset to a Distribution to a Member, either (i) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset or (ii) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offset. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (i) above, such retained Property may, in the discretion of the Administrative Manager, either (A) be distributed to the other Members, Members or (B) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property is sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 4.12.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 1. If and to the extent the Company is required by law, including FATCA, (as determined in good faith by the Administrative Manager) to make a payment payments (“Tax PaymentPayments”) with respect to any Member in amounts required to discharge any legal obligation of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreignstate, state local or local foreign tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, then the amount of any such Tax Payment Payments shall be deemed to be a loan by the Company to such Member, which loan shall shall: (i) be secured by such Member’s interest in the Company, (ii) bear interest at the Prime Rate prime rate determined by the Company’s bank, and (iii) be payable upon demand demand. The Manager may elect to withhold any or by offset all distributions to any Distribution which otherwise would be made to such Member pursuant to Article 7 or Article 10 and offset the principal amount of any such loan and accrued interest thereon against any such distributions withheld. Amounts paid in respect of interest on such loan shall be treated as Profit of the Company and shall not be treated as a capital contribution by such Member. 4.10.2 2. If and to the extent the Company is required to make any Tax Payment Payments with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 by offset to a Distribution distribution to a Member, either (i) such Member’s proportionate share of such Distribution distribution shall be b e reduced by the amount of such Tax Payment or offset Payments ( provided that such Member’s Capital Account shall be adjusted pursuant to the terms of this Agreement for such Member’s full proportionate share of the distribution), or (ii) such Member shall promptly pay to the Company prior to such Distribution distribution an amount of cash equal to such Tax Payment or offsetPayments. In the event a portion of a Distribution distribution in kind is retained by the Company pursuant to clause (i) above), such retained Property Securities may, in the sole discretion of the Administrative Manager, either (A1) be distributed to the other MembersMembers in accordance with the terms of this Agreement, or (B2) be sold by the Company to generate the cash necessary to satisfy such Tax PaymentPayments. If the Property is Securities are sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from on such sale or exchange shall be allocated to the Member to whom the Tax Payment relatesPayments relate. 3. If E ach Member will, as applicable, take such actions as are required to establish to the Property reasonable satisfaction of the Manager that such Member is sold at a gain(i) not subject to the withholding tax obligations imposed by Section 1471 of the Code and (ii) not subject to withholding tax obligations imposed by Section 1472 of the Code. In addition, each Member will assist the Company and the Manager with any applicable information reporting or other obligation imposed on the Company, the Manager, or their respective Affiliates, pursuant to the FATCA. As used herein, “FATCA” means the Foreign Account Tax Compliance provisions enacted as part of the U.S. Hiring Incentives to Restore Employment Act and codified in Sections 1471 through 1474 of the Code, all rules, regulations and other guidance issued thereunder, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Paymentall administrative and judicial interpretations thereof. 4.10.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 If 1. I f and to the extent the Company is required by law, including FATCA, (as determined in good faith by the Administrative Manager) to make a payment payments (“Tax PaymentPayments”) with respect to any Member in amounts required to discharge any legal obligation of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreignstate, state local or local foreign tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, then the amount of any such Tax Payment Payments shall be deemed to be a loan by the Company to such Member, which loan shall shall: (i) be secured by such Member’s interest in the Company, (ii) bear interest at t h e prime rate determined by the Prime Rate Company’s bank, and (iii) be payable upon demand demand. The Manager may elect to withhold any or by offset all distributions to any Distribution which otherwise would be made to such Member pursuant to Article 7 or Article 10 and offset the principal amount of any such loan and accrued interest thereon against any such distributions withheld. Amounts paid in respect of interest on such loan shall be treated as Profit of the Company and shall not be treated as a capital contribution by such Member. 4.10.2 2. If and to the extent the Company is required to make any Tax Payment Payments with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 by offset to a Distribution distribution to a Member, either (i) such Member’s proportionate share of such Distribution distribution shall be reduced by the amount of such Tax Payment or offset Payments ( provided that such Member’s Capital Account shall be adjusted pursuant to the terms of this Agreement for such Member’s full proportionate share of the distribution), or (ii) such Member shall promptly pay to the Company prior to such Distribution distribution an amount of cash equal to such Tax Payment or offsetPayments. In the event a portion of a Distribution distribution in kind is retained by the Company pursuant to clause (i) above), such retained Property Securities may, in the sole discretion of the Administrative Manager, either (A1) be distributed to the other MembersMembers in accordance with the terms of this Agreement, or (B2) be sold by the Company to generate the cash necessary to satisfy such Tax PaymentPayments. If the Property is Securities are sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from on such sale or exchange shall be allocated to the Member to whom the Tax Payment relatesPayments relate. 3. If Each Member will, as applicable, take such actions as are required to establish to the Property reasonable satisfaction of the Manager that such Member is sold at a gain(i) not subject to the withholding tax obligations imposed by Section 1471 of the Code and (ii) not subject t o withholding tax obligations imposed by Section 1472 of the Code. In addition, each Member will assist the Company and the Manager with any applicable information reporting or other obligation imposed on the Company, the Manager, or their respective Affiliates, pursuant to the FATCA. As used herein, “FATCA” means the Foreign Account Tax Compliance provisions enacted as part of the U.S. Hiring Incentives to Restore Employment Act and codified in Sections 1471 through 1474 of the Code, all rules, regulations and other guidance issued thereunder, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Paymentall administrative and judicial interpretations thereof. 4.10.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 If the Company is required (as determined in good faith by the Administrative ManagerCottonwood Residential) to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation of the Company or the Managers to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 by offset to a Distribution to a Member, either (i) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset or (ii) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offset. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (i) above, such retained Property may, in the discretion of the Administrative ManagerCottonwood Residential, either (A) be distributed to the other Members, or (B) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property is sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 The Administrative Manager Cottonwood Residential shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager Cottonwood Residential believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager Cottonwood Residential believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 4.11.1 If the Company is required (as determined in good faith by the Administrative Manager) to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 4.11.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 4.12.1 by offset to a Distribution to a Member, either (i) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (ii) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause clause (i) above, such retained Property property may, in the discretion of the Administrative Manager, either (A) be distributed to the other Members, or (B) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property property is sold, then for purposes of income tax allocations only under this the Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 4.11.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 4.6.1 If the Company Partnership is required (as determined in good faith by the Administrative ManagerGeneral Partner) to make a payment (“Tax Payment”) with respect to any Member Limited Partner to discharge any legal obligation on the part of the Company Partnership or the Managers General Partner to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member Limited Partner arising as a result of such MemberLimited Partner’s interest in the CompanyPartnership, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company Partnership to such MemberLimited Partner, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such MemberLimited Partner. 4.10.2 4.6.2 If and to the extent the Company Partnership is required to make any Tax Payment with respect to any MemberLimited Partner, or elects to make payment on any loan described in Section 4.10.1 4.6.1 by offset to a Distribution to a MemberLimited Partner, either (ia) such MemberLimited Partner’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (iib) such Member Limited Partner shall pay to the Company Partnership prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company Partnership pursuant to clause (ia) above, such retained Property property may, in the discretion of the Administrative ManagerGeneral Partner, either (Ai) be distributed to the other MembersLimited Partners, or (Bii) be sold by the Company Partnership to generate the cash necessary to satisfy such Tax Payment. If the Property property is sold, then for purposes of income tax allocations only under this the Agreement, any gain or loss from such sale or exchange shall be allocated to the Member Limited Partner to whom the Tax Payment relates. If the Property property is sold at a gain, and the Company Partnership is required to make any Tax Payment on such gain, the Member Limited Partner to whom the gain is allocated shall pay the Company Partnership prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 4.6.3 The Administrative Manager General Partner shall be entitled to hold back any Distribution to any Member Limited Partner to the extent the Administrative Manager General Partner believes in good faith that a Tax Payment will be required with respect to such Member Limited Partner in the future and the Administrative Manager General Partner believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 If Each of the Company is required (as determined by Buyer and the Administrative Manager) Surviving Corporation shall be entitled to make a payment (“Tax Payment”) with respect deduct and withhold from the consideration otherwise payable pursuant to any Member to discharge any legal obligation of the Company or the Managers to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any Equity Holders such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 If and to the extent the Company amounts as it reasonably determines that it is required to make any Tax Payment deduct and withhold with respect to any Memberthe making of such payment under the Code, or elects any other applicable U.S. or foreign law, rule or regulation. The Buyer or the Surviving Corporation, as the case may be, shall timely pay over such withheld amounts to make payment the appropriate Governmental Entity on any loan described behalf of the Equity Holders from whom such amounts are withheld in Section 4.10.1 accordance with the Code or such other applicable U.S. or foreign law, rule, or regulation. To the extent that amounts are so withheld by offset to a Distribution to a Memberthe Buyer or the Surviving Corporation, either (i) as the case may be, such Member’s proportionate share of such Distribution withheld amounts shall be reduced treated for all purposes of this Agreement as having been paid to the Equity Holders in respect of which such deduction and withholding was made by the amount of such Tax Payment Buyer or offset the Surviving Corporation, as the case may be. The Buyer shall also have the right to collect Forms W-8 or (ii) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offset. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (i) above, such retained Property may, in the discretion of the Administrative Manager, either (A) be distributed to the other MembersW-9, or (B) such other forms relating to United States federal withholding obligations as may be sold by applicable, from the Company to generate the cash necessary to satisfy such Tax PaymentEquity Holders. If the Property is sold, then for purposes of income tax allocations only under this Agreement, any gain or loss Each Equity Holder from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If Buyer or the Property is sold at a gain, and the Company Surviving Corporation is required to withhold shall indemnify and hold harmless the Buyer, the Surviving Corporation and their respective Affiliates from and against any and all Taxes (but, for the purposes of this Section 1.18, the term "Taxes" shall not include any penalty or interest) incurred or suffered by any of them as a result of or relating to the calculation or payment (including without limitation any errors in the calculation or failure to make any Tax Payment on payment) of any amounts required to be withheld from such gain, the Member Equity Holder and/or paid to whom the gain is allocated shall pay the Company prior to the due date any Governmental Entity in respect of payment of the Tax Payment an amount of cash equal Merger Consideration or Management Shares to such Tax Payment. 4.10.3 The Administrative Manager shall be entitled to hold back Equity Holder or in respect of the exercise of any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to Options or Warrants held by such Member in the future Equity Holder and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Paymentpayment of the Option/Warrant Consideration in connection with the Merger.

Withholding Obligations. 4.10.1 If Unless treated as a Tax Payment Loan, any amount paid by the Company is required (as determined by the Administrative Manager) to make a payment (“Tax Payment”) for or with respect to any Member on account of any withholding tax or other tax payable with respect to discharge any legal obligation the income, profits or distributions of the Company pursuant to the Code, the Regulations, or the Managers to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of statute, regulation or ordinance requiring such payment (a “Withholding Tax Act”) shall be treated as a Distribution to such Member arising for all purposes of this Agreement, consistent with the character or source of the income, profits or cash which gave rise to the payment or withholding obligation. To the extent that the amount required to be remitted by the Company under the Withholding Tax Act exceeds the amount then otherwise distributable to such Member (including as a result Tax Distribution), the excess shall constitute a loan from the Company to such Member (a “Tax Payment Loan”), which shall be payable upon demand and shall bear interest, from the date that the Company makes the payment to the relevant taxing authority, at a lesser of (i) a variable rate per annum at all times equal to two hundred (200) basis points in excess of the Prime Rate or (ii) the maximum legal interest rate under applicable law. As long as any Tax Payment Loan or the interest thereon remains unpaid, the Company shall make future Distributions due to such Member’s interest in the Company, then, notwithstanding any other provision of Member under this Agreement to the contrary, by applying the amount of any such Distribution first to the payment of any unpaid interest on all Tax Payment Loans to such Member and then to the repayment of the principal of all Tax Payment Loans of such Member. The Managing Member shall be deemed have the authority to be a loan by take all actions necessary to enable the Company to such Member, which loan comply with the provisions of any Withholding Tax Act applicable to the Company and to carry out the provisions of this Section 8.4. Nothing in this Section 8.4 shall bear interest at create any obligation on any Member to advance funds to the Prime Rate and be payable upon demand Company or by offset to borrow funds from third parties in order to make any Distribution which otherwise would be made payments on account of any liability of the Company under a Withholding Tax Act except for withholding tax liabilities attributable to such Member. 4.10.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 by offset to a Distribution to a Member, either (i) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset or (ii) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offset. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (i) above, such retained Property may, in the discretion of the Administrative Manager, either (A) be distributed to the other Members, or (B) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property is sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 4.11.1 If the Company is required (as determined in good faith by the Administrative Manager) to make a payment (“"Tax Payment”") with respect to any Member to discharge any legal obligation of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s 's interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, if the amount of such withholding is not available from distributions the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 4.11.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 4.11.1 by offset to a Distribution to a Member, either (i) such Member’s 's proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (ii) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (i) above, such retained Property property may, in the discretion of the Administrative Manager, either (A) be distributed to the other Members, or (B) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property property is sold, then for purposes of income tax allocations only under this the Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 4.11.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 4.11.1 If the Company is required (as determined in good faith by the Administrative Manager) to make a payment (“"Tax Payment”") with respect to any Member to discharge any legal obligation of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s 's interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 4.11.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 4.11.1 by offset to a Distribution to a Member, either (ia) such Member’s 's proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (iib) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (ia) above, such retained Property property may, in the discretion of the Administrative Manager, either (Ai) be distributed to the other Members, or (Bii) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property property is sold, then for purposes of income tax allocations only under this the Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 4.11.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 4.12.1 If the Company is required (as determined in good faith by the Administrative Manager) to make a payment (“"Tax Payment”") with respect to any Member to discharge any legal obligation of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s 's interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 4.12.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 4.12.1 by offset to a Distribution to a Member, either (ia) such Member’s 's proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (iib) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (ia) above, such retained Property property may, in the discretion of the Administrative Manager, either (Ai) be distributed to the other Members, or (Bii) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property property is sold, then for purposes of income tax allocations only under this the Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 4.12.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 4.12.1 If the Company is required (as determined in good faith by the Administrative Manager) to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation on the part of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 4.12.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 4.12.1 by offset to a Distribution to a Member, either (i) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (ii) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (i) above, such retained Property property may, in the discretion of the Administrative Manager, either (A) be distributed to the other Members, or (B) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property property is sold, then for purposes of income tax allocations only under this the Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 4.12.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 (a) If the Company is required (as determined in good faith by the Administrative Manager) to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member Member, arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 (b) If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects the Company may elect to make payment on any loan described in Section 4.10.1 Section 4.11.1 by offset to a Distribution to a Member, by either (ia) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (iib) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (ia) above, such retained Property property may, in the discretion of the Administrative Manager, either (Ai) be distributed to the other Members, or (Bii) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property property is sold, then for purposes of income tax allocations only under this the Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 (c) The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 4.11.1 If the Company is required (as determined in good faith by the Administrative Manager) to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 4.11.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 4.11.1 by offset to a Distribution to a Member, either (ia) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (iib) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (ia) above, such retained Property property may, in the discretion of the Administrative Manager, either (Ai) be distributed to the other Members, or (Bii) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property property is sold, then for purposes of income tax allocations only under this the Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 4.11.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 4.11.1 If the Company is required (as determined in good faith by the Administrative Manager) to make a payment (“"Tax Payment”") with respect to any Member to discharge any legal obligation of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s 's interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 4.11.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 4.11.1 by offset to a Distribution to a Member, either (ia) such Member’s 's proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (iib) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (ia) above, such retained Property property may, in the discretion of the Administrative Manager, either (Ai) be distributed to the other Members, or (Bii) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If interests in the Property is Properties are sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property interest in the Properties is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 4.11.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required requited with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 (a) If the Company is required (as determined in good faith by the Administrative Manager) to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation of the Company or the Managers Manager to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member Member, arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 (b) If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects the Company may elect to make payment on any loan described in Section 4.10.1 Section 4.11.1 by offset to a Distribution to a Member, by either (ia) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (iib) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (ia) above, such retained Property property may, in the discretion of the Administrative Manager, either (Ai) be distributed to the other Members, Members or (Bii) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property property is sold, then for purposes of income tax allocations only under this the Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 (c) The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 4.11.1 If the Company Fund is required (as determined by the Administrative Manager) to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation of the Company Fund or the Managers Manager to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s interest in the CompanyFund, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company Fund to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 4.11.2 If and to the extent the Company Fund is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 4.11.1 by offset to a Distribution to a Member, either (i) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (ii) such Member shall pay to the Company Fund prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company Fund pursuant to clause (i) above, such retained Property may, in the discretion of the Administrative Manager, either (A) be distributed to the other Members, or (B) be sold by the Company Fund to generate the cash necessary to satisfy such Tax Payment. If the Property is sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property is sold at a gain, and the Company Fund is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company Fund prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 4.11.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 4.12.1 If the Company is required (as determined by the Administrative Manager) Board of Managers to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation of the Company or the Board of Managers to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 4.12.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 4.12.1 by offset to a Distribution to a Member, either (i) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (ii) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause clause (i) above, such retained Property may, in the discretion of the Administrative ManagerBoard of Managers, either (A) be distributed to the other Members, or (B) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property is sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 4.12.3 The Administrative Manager Board of Managers shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager Board of Managers believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager Board of Managers believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 If the Company is required (as determined in good faith by the Administrative ManagerCottonwood Residential) to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation of the Company or the Managers to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s interest in the Company, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 If and to the extent the Company is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 by offset to a Distribution to a Member, either (i) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset or (ii) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such Tax Payment or offset. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (i) above, such retained Property may, in the discretion of the Administrative ManagerCottonwood Residential, either (A) be distributed to the other Members, or (B) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property is sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment.5 4.10.3 The Administrative Manager Cottonwood Residential shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager Cottonwood Residential believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager Cottonwood Residential believes that there will not be sufficient subsequent Distributions to make such Tax Payment. 5.

Withholding Obligations. 4.10.1 If Unless treated as a Tax Payment Loan (as hereinafter defined), any amount paid by the Company is required (as determined by the Administrative Manager) to make a payment (“Tax Payment”) for or with respect to any Member on account of any withholding tax or other tax payable with respect to discharge any legal obligation the income, profits or distributions of the Company pursuant to the Code, the Treasury Regulations, or the Managers to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of statute, regulation or ordinance requiring such payment (a "Withholding Tax Act") shall be treated as a distribution to such Member arising as a result for all purposes of this Agreement, consistent with the character or source of the income, profits or cash which gave rise to the payment or withholding obligation. To the extent that the amount required to be remitted by the Company under the Withholding Tax Act exceeds the amount then otherwise distributable to such Member’s , the excess shall constitute a loan from the Company to such Member (a "Tax Payment Loan") which shall be payable upon demand and shall bear interest, from the date that the Company makes the payment to the relevant taxing authority, at the lesser of (i) a variable rate per annum at all times equal to two percent (2%) in excess of the prime rate of interest published in THE WALL STREET JOURNAL or (ii) the Companymaximum legal interest rate under applicable law. So long as any Tax Payment Loan or the interest thereon remains unpaid, then, notwithstanding any other provision of the Company shall make future distributions due to such Member under this Agreement to the contrary, by applying the amount of any such distribution first to the payment of any unpaid interest on all Tax Payment Loans of such Member and then to the repayment of the principal of all Tax Payment Loans of such Member. The Board shall be deemed have the authority to be a loan by take all actions necessary to enable the Company to such Member, which loan shall bear interest at comply with the Prime Rate and be payable upon demand or by offset provisions of any Withholding Tax Act applicable to any Distribution which otherwise would be made to such Member. 4.10.2 If the Company and to carry out the extent provisions of this Section. Nothing in this Section shall create any obligation on the Members to advance funds to the Company is required or to borrow funds from third parties in order to make any Tax Payment with respect to payments on account of any Member, or elects to make payment on any loan described in Section 4.10.1 by offset to a Distribution to a Member, either (i) such Member’s proportionate share liability of such Distribution shall be reduced by the amount of such Tax Payment or offset or (ii) such Member shall pay to the Company prior to such Distribution an amount of cash equal to such under a Withholding Tax Payment or offset. In the event a portion of a Distribution in kind is retained by the Company pursuant to clause (i) above, such retained Property may, in the discretion of the Administrative Manager, either (A) be distributed to the other Members, or (B) be sold by the Company to generate the cash necessary to satisfy such Tax Payment. If the Property is sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property is sold at a gain, and the Company is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company prior to the due date of the Tax Payment an amount of cash equal to such Tax PaymentAct. 4.10.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.

Withholding Obligations. 4.10.1 4.12.1 If the Company Fund is required (as determined by the Administrative Manager) to make a payment (“Tax Payment”) with respect to any Member to discharge any legal obligation of the Company Fund or the Managers Manager to make payments to any governmental authority with respect to any federal, foreign, state or local tax liability of such Member arising as a result of such Member’s interest in the CompanyFund, then, notwithstanding any other provision of this Agreement to the contrary, the amount of any such Tax Payment shall be deemed to be a loan by the Company Fund to such Member, which loan shall bear interest at the Prime Rate and be payable upon demand or by offset to any Distribution which otherwise would be made to such Member. 4.10.2 4.12.2 If and to the extent the Company Fund is required to make any Tax Payment with respect to any Member, or elects to make payment on any loan described in Section 4.10.1 4.12.1 by offset to a Distribution to a Member, either (i) such Member’s proportionate share of such Distribution shall be reduced by the amount of such Tax Payment or offset Payment, or (ii) such Member shall pay to the Company Fund prior to such Distribution an amount of cash equal to such Tax Payment or offsetPayment. In the event a portion of a Distribution in kind is retained by the Company Fund pursuant to clause (i) above, such retained Property may, in the discretion of the Administrative Manager, either either (A) be distributed to the other Members, or (B) be sold by the Company Fund to generate the cash necessary to satisfy such Tax Payment. If the Property is sold, then for purposes of income tax allocations only under this Agreement, any gain or loss from such sale or exchange shall be allocated to the Member to whom the Tax Payment relates. If the Property is sold at a gain, and the Company Fund is required to make any Tax Payment on such gain, the Member to whom the gain is allocated shall pay the Company Fund prior to the due date of the Tax Payment an amount of cash equal to such Tax Payment. 4.10.3 4.12.3 The Administrative Manager shall be entitled to hold back any Distribution to any Member to the extent the Administrative Manager believes in good faith that a Tax Payment will be required with respect to such Member in the future and the Administrative Manager believes that there will not be sufficient subsequent Distributions to make such Tax Payment.