Common use of Withholding of Tax on Certain Company Distributions Clause in Contracts

Withholding of Tax on Certain Company Distributions. (a) Unless treated as a Tax Payment Loan, any amount paid by the Company for or with respect to any Partner on account of any withholding tax or other tax payable with respect to the income, profits or distributions of the Company pursuant to the Code, the Regulations or any state or local statute, regulation or ordinance requiring such payment (a “Withholding Tax Act”) shall be treated as a distribution to such Partner for all purposes of this Agreement, consistent with the character or source of the income, profits or cash that 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 Partner, unless and to the extent that funds shall have been provided by such Partner pursuant to the last sentence of this Section 6.11(a), the excess shall constitute a loan from the Company to such Partner (a “Tax Payment Loan”). Any such Tax Payment Loan 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) the Prime Rate plus two percentage points per annum, or (ii) the highest rate permitted by applicable law, compounded monthly (but in no event higher than the highest interest rate permitted by applicable law). During such time as any Tax Payment Loan to any Partner (or the interest thereon) remains unpaid, all future distributions otherwise to be made to such Partner under this Agreement shall be distributed for such Partner’s account by applying the amount of any such distributions first to the payment of any unpaid interest on such Tax Payment Loan and then to the repayment of the principal thereof, and no such future distributions shall be paid to such Partner until all of such principal and interest has been paid in full, but all such amounts shall, for purposes of this Agreement, be treated as a distribution to such Partner. If the amount required to be remitted by the Company under the Withholding Tax Act exceeds the amount then otherwise distributable to a Partner, the Company shall notify such Partner at least five (5) Business Days in advance of the date upon which the Company would be required to make a Tax Payment Loan under this Section 6.11(a) (the “Tax Payment Loan Date”) and provide such Partner the opportunity to pay to the Company on or before the Tax Payment Loan Date, all or a portion of such deficit. If any Tax Payment Loan is not fully repaid before the earlier of (a) removal of the Partner receiving the Tax Payment Loan, or (b) liquidation of the Company, such Partner shall remit any remaining portion of the principal and interests payable on the Tax Payment Loan to the Company. (b) The General Partner shall have the authority to take all actions necessary to enable the Company to comply with the provisions of any Withholding Tax Act applicable to the Company and to carry out the provisions of this Section 6.11. Nothing in this Section 6.11 shall create any obligation on the General Partner to advance funds to the Company or to borrow funds from third parties in order to make any payments on account of any liability of the Company under a Withholding Tax Act.

Withholding of Tax on Certain Company Distributions. (a) Unless treated as a Tax Payment Loan, any amount paid by the Company for or with respect to any Partner Member on account of any withholding tax or other tax payable with respect to the income, profits or distributions of the Company pursuant to the Code, the Regulations or any state or local statute, regulation or ordinance requiring such payment (a “Withholding Tax Act”) shall be treated as a distribution to such Partner Member for all purposes of this Agreement, consistent with the character or source of the income, profits or cash that 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 PartnerMember, unless and to the extent that funds shall have been provided by such Partner Member pursuant to the last sentence of this Section 6.11(a7.07(a), the excess shall constitute a loan from the Company to such Partner Member (a “Tax Payment Loan”). Any such Tax Payment Loan 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) the Prime Rate plus two (2) percentage points per annum, or (ii) the highest rate permitted by applicable law, compounded monthly (but in no event higher than the highest interest rate permitted by applicable law). During such time as any Tax Payment Loan to any Partner Member (or the interest thereon) remains unpaid, all the Company shall make future distributions otherwise to be made due to such Partner Member under this Agreement shall be distributed for such Partner’s account by applying the amount of any such distributions first to the payment of any unpaid interest on such Tax Payment Loan and then to the repayment of the principal thereof, and no such future distributions shall be paid to such Partner Member until all of such principal and interest has been paid in full, but all such amounts shall, for purposes of this Agreement, be treated as a distribution to such Partner. If the amount required to be remitted by the Company under the Withholding Tax Act exceeds the amount then otherwise distributable to a PartnerMember, the Company shall notify such Partner Member at least five (5) Business Days in advance of the date upon which the Company would be required to make a Tax Payment Loan under this Section 6.11(a7.07(a) (the “Tax Payment Loan Date”) and provide such Partner Member the opportunity to pay to the Company on or before the Tax Payment Loan Date, all or a portion of such deficit. If any Tax Payment Loan is not fully repaid before the earlier of (a) removal of the Partner receiving the Tax Payment Loan, or (b) liquidation of the Company, such Partner shall remit any remaining portion of the principal and interests payable on the Tax Payment Loan to the Company. (b) The General Partner Managing Member shall have the authority to take all actions necessary to enable the Company to comply with the provisions of any Withholding Tax Act applicable to the Company and to carry out the provisions of this Section 6.117.07. Nothing in this Section 6.11 7.07 shall create any obligation on the General Partner Managing Member to advance funds to the Company or to borrow funds from third parties in order to make any payments on account of any liability of the Company under a Withholding Tax Act.