Common use of Code Section 7704 Safe Harbor Clause in Contracts

Code Section 7704 Safe Harbor. In order to permit the LLC to qualify for the benefit of a “safe harbor” under Code Section 7704, notwithstanding anything to the contrary in this Agreement, no Transfer of any Unit or economic interest shall be permitted or recognized by the LLC or the Board (within the meaning of Treasury Regulation Section 1.7704-1(d)) if and to the extent that such Transfer would cause the LLC to have more than 100 partners (within the meaning of Treasury Regulation Section 1.7704-1(h), including the look-through rule in Treasury Regulation Section 1.7704-1(h)(3)). Further, no Transfer of any Unit or economic interest shall be permitted if such Transfer would create, in the Board’s discretion, a risk that the LLC would be treated as a publicly-traded partnership within the meaning of Code Section 7704.

Code Section 7704 Safe Harbor. In order to permit the Holdings LLC to qualify for the benefit of a “safe harbor” under Code Section 7704, notwithstanding anything to the contrary in this Agreement, no Transfer of any Unit or economic interest shall be permitted or recognized by the Holdings LLC or the Board (within the meaning of Treasury Regulation Section 1.7704-1(d)) if and to the extent that such Transfer would cause the Holdings LLC to have more than 100 partners (within the meaning of Treasury Regulation Section 1.7704-1(h), including the look-through rule in Treasury Regulation Section 1.7704-1(h)(3)). Further, no Transfer of any Unit or economic interest shall be permitted if such Transfer would create, in the Board’s discretion, a risk that the LLC would be treated as a publicly-traded partnership within the meaning of Code Section 7704.

Code Section 7704 Safe Harbor. In order to permit the Holdings LLC to qualify for the benefit of a “safe harbor” under Code Section 7704, notwithstanding anything to the contrary in this Agreement, no Transfer of any Unit or economic interest shall be permitted or recognized by the Holdings LLC or the Board (within the meaning of Treasury Regulation Regulations Section 1.7704-1(d)) if and to the extent that such Transfer would cause the (or create substantial risk of causing) Holdings LLC to have more than 100 partners (within the meaning of Treasury Regulation Regulations Section 1.7704-1(h), including the look-through rule in Treasury Regulation Regulations Section 1.7704-1(h)(31 (h)(3)). Further, no Transfer of any Unit or economic interest shall be permitted if such Transfer would create, in the Board’s discretion, a risk that the LLC would be treated as a publicly-traded partnership within the meaning of Code Section 7704.