Indemnification Under Section 2 Sample Clauses

Indemnification Under Section 2. 1. (a) In the event that the Partnership has an obligation as set forth in Section 2.1 and disposes of any Gain Limitation Property in a manner that results in the Protected Partner recognizing taxable income or gain, the Protected Partner shall receive from the Partnership as damages an amount equal to (without any gross-up) the aggregate federal, state and local income taxes incurred by such Protected Partner (or incurred by a direct or indirect owner of a Protected Partner (any such person an “Indirect Owner”) who is subject to income taxes on the income of such Protected Partner) as a result of any Protected Gain allocated to such Protected Partner by reason of such disposition . The Partnership shall calculate any required indemnity payment owed to a Protected Partner pursuant to this Section 2.2(a) and make any required payment within ninety (90) days after such triggering event has occurred. For purposes of the preceding sentence, (1) all income arising from a transaction or event that is treated as ordinary income under the applicable provisions of the Code shall be treated as subject to federal, state and local income tax at an effective tax rate imposed on ordinary income of individuals residing in the city and state of residence of such Protected Partner, determined using the maximum federal rate of tax on ordinary income and the maximum state and local rates of tax on ordinary income then in effect in such city and state (2) all income arising from a transaction or event that is treated as “unrecaptured section 1250 gain” within the meaning of Code Section 1(h)(6) with respect to such Protected Partner shall be subject to federal, state and local income tax at the effective tax rate imposed on the unrecaptured section 1250 gain of individuals residing in the city and state of residence of such Protected Partner, (3) all other income arising from the transaction or event shall be subject to federal, state, and local income tax at the effective tax rate imposed on long-term capital gains of individuals residing in the city and state of residence of such Protected Partner, determined using the maximum federal, state and local rates on long-term capital gains then in effect, (4) any amounts giving rise to a payment pursuant to this Section 2.2(a) will be determined assuming that the transaction or event giving rise to the Partnership’s obligation to make a payment was the only transaction or event reported on the Protected Partner’s tax return (i.e...