Common use of Covenant Not to Withdraw or Dissolve Clause in Contracts

Covenant Not to Withdraw or Dissolve. (a) Notwithstanding any provision of the Delaware Act, each Member hereby agrees that it has entered into this Agreement based on the expectation that all Members will continue as Members and carry out the duties and obligations undertaken by them hereunder. Except as otherwise expressly required or permitted hereby, each Member hereunder covenants and agrees not (i) to take any action to file a certificate of dissolution or its equivalent with respect to itself, (ii) take any action that would cause a Bankruptcy of such Member, (iii) withdraw or attempt to withdraw from the Company, expect as otherwise expressly permitted by this Agreement or the Delaware Act, (iv) exercise any power under the Delaware Act to dissolve the Company, (v) transfer all or any portion of its Interest, except as expressly provided herein, or (vi) demand a return of such Member’s contributions or profits (or a bond or other security for the return of such contribution or profits), in each case without the consent of the other Members. (b) Prior to any Member causing or permitting an interest in itself to be transferred such that, after the transfer, the Company would be considered to have terminated within the meaning of section 708 of the Code “Section 708 Termination”, the transferring Member or its designee must provide written notice and offer to pay to each other Member prior to the transfer in cash the amount (the “Make-Whole Amount”) necessary to hold that other Member harmless against any deferral of state or federal income tax depreciation or other increase in liability for such tax (including any change in the present value of such liability) that such Section 708 Termination would cause. Any such payment shall be due and payable immediately upon the consummation of such transfer. For purposes of calculating the Make-Whole Amount, such other Member(s) will be treated as if they are corporations for federal and state income tax purposes. In the case of any transfer to which this Section 8.6(b) applies, the Make-Whole Amount for each Member entitled to be paid that amount will be computed on a net present value basis using: (i) the Agreed Rate in effect on the date of payment and (ii) the highest marginal applicable state and federal corporate income tax rates for the year of payment. Using those same highest marginal rates, the amount that is determined pursuant to the preceding sentence will be grossed up such that the increased amount reduced by the state and federal income tax that are deemed paid by reason of the receipt thereof is equal to the amount that is determined pursuant to the preceding sentence. If the applicable state income tax is deductible for federal income tax purposes, effect will be given to that deduction in calculating the Make-Whole Amounts.