Common use of Restrictions on Disposition of Gain Limitation Properties Clause in Contracts

Restrictions on Disposition of Gain Limitation Properties. The Operating Partnership agrees for the benefit of each Protected Partner, for the term beginning as of the date hereof and ending on the earlier of the sale or transfer of all or substantially all of the assets of the Operating Partnership or the liquidation of the Operating Partnership in which the Protected Partners receive solely cash or marketable securities, without restriction, for their respective interests in the Operating Partnership (the “Tax Protection Period”), not to directly or indirectly sell, exchange, transfer, or otherwise dispose of a Gain Limitation Property or any interest therein, without regard to whether such disposition is voluntary or involuntary, in a transaction that causes the Protected Partners to recognize any Protected Gain. Without limiting the foregoing, the term “sale, exchange, transfer or disposition” by the Operating Partnership shall be deemed to include, and the prohibition shall extend to: (a) any direct or indirect disposition by the Operating Partnership of any Gain Limitation Property (or any direct or indirect interest therein) that is subject to Section 704(c)(l)(B) of the Code and the Treasury Regulations thereunder; and (b) any distribution by the Operating Partnership to a Protected Partner that is subject to Section 737 of the Code and the Treasury Regulations thereunder. Notwithstanding the foregoing, this Section 2.1 shall not apply to a merger or consolidation of the Operating Partnership pursuant to which (1) the Protected Partner is offered as consideration for the Protected Partner’s OP Units either (A) cash or property treated as cash pursuant to Section 731 of the Code (“Cash Consideration”) or (B) partnership interests that are substantially equivalent (including value and profit and loss sharing) to the OP Units disposed of, and the receipt of such partnership interests would not result in the recognition of gain for federal, state, or local income tax purposes by the Protected Partner (“Operating Partnership Interest Consideration”); (2) the Protected Partner has the right to elect to receive solely Operating Partnership Interest Consideration in exchange for his OP Units and the continuing partnership has agreed in writing to assume the obligations of the Operating Partnership under this Agreement; (3) no Protected Gain is recognized by the Operating Partnership as a result of any partner of the Operating Partnership other than the Protected Partner receiving Cash Consideration; and (4) the Protected Partner elects or is deemed to elect to receive Cash Consideration. Furthermore, notwithstanding the restriction set forth in this Section 2.1, the Operating Partnership may dispose of any Gain Limitation Property (or any interest therein) if such disposition qualifies as a “like-kind exchange” under Section 1031 of the Code, or an involuntary conversion under Section 1033 of the Code, or other transaction (including, but not limited to, a contribution of property to any entity that qualifies for the non-recognition of gain under Section 721 or Section 351 of the Code, or a merger or consolidation of the Partnership with or into another entity that qualifies for taxation as a “partnership” for federal income tax purposes) that, as to each of the foregoing, does not result in the recognition of any taxable income or gain to any Protected Partner with respect to any of the OP Units; provided, however, that in the case of a “like-kind exchange” under Section 1031 of the Code, if such exchange is with a “related party” within the meaning of Section 1031(f)(3) of the Code, any direct or indirect disposition by such related party of the Gain Limitation Property or any other transaction prior to the expiration of the two (2) year period following such exchange that would cause Section 1031(f)(1) of the Code to apply with respect to such Gain Limitation Property (including by reason of the application of Section 1031(f)(4) of the Code) shall be considered a violation of this Section 2.1 by the Partnership.

Restrictions on Disposition of Gain Limitation Properties. (a) The Operating Partnership agrees for the benefit of each Protected Partner, for the term beginning as of the date hereof and ending on the earlier of the sale or transfer of all or substantially all of the assets of the Operating Partnership or the liquidation of the Operating Partnership in which the Protected Partners receive solely cash or marketable securities, without restriction, for their respective interests in the Operating Partnership (the “Tax Protection Period”), not to directly or indirectly sell, exchange, transfer, or otherwise dispose of a Gain Limitation Property or any interest therein, without regard to whether such disposition is voluntary or involuntary, in a transaction that causes the would cause any Protected Partners Partner to recognize any Protected Gain. Without limiting the foregoing, the term “sale, exchange, transfer or disposition” by the Operating Partnership shall be deemed to include, and the prohibition shall extend to: (ai) any direct or indirect disposition by any direct or indirect Subsidiary of any Gain Limitation Property or any interest therein; (ii) any direct or indirect disposition by the Operating Partnership or Subsidiary of any Gain Limitation Property (or any direct or indirect interest therein) that is subject to Section 704(c)(l)(B704(c)(1)(B) of the Code and the Treasury Regulations thereunder; (iii) any direct or indirect disposition by the Partnership or any Subsidiary of all or any portion of its interest in any Subsidiary that owns a direct or indirect interest in the Gain Limitation Property (or any direct or indirect interest therein); and (biv) any distribution by the Operating Partnership to a Protected Partner that is subject to Section 737 of the Code and the Treasury Regulations thereunder. Without limiting the foregoing, a disposition shall include any transfer, voluntary or involuntary, by the Partnership or any Subsidiary in a foreclosure proceeding, pursuant to a deed in lieu of foreclosure, or in a bankruptcy proceeding. A disposition shall not include any direct or indirect redemption or other transfer by a Protected Partner of its OP Units. Notwithstanding the foregoing, this Section 2.1 shall not apply to a voluntary, actual disposition by a Protected Partner of OP Units in connection with a merger or consolidation of the Operating Partnership pursuant to which (1) the Protected Partner is offered as consideration for the Protected Partner’s OP Units either (A) cash or property treated as cash pursuant to Section 731 of the Code (“Cash Consideration”) or (B) partnership interests that are substantially equivalent (including value and profit and loss sharing) to the OP Units disposed of, and the receipt of such partnership interests would not result in the recognition of gain for federal, state, or local federal income tax purposes by the Protected Partner (“Operating Partnership Interest Consideration”); (2) the Protected Partner has the right to elect to receive solely Operating Partnership Interest Consideration in exchange for his OP Units Units, and the continuing partnership has agreed in writing to assume the obligations of the Operating Partnership under this Agreement; (3) no Protected Gain is recognized by the Operating Partnership as a result of any partner of the Operating Partnership other than the Protected Partner receiving Cash Consideration; and (4) the Protected Partner elects or is deemed to elect to receive any Cash Consideration. Furthermore, notwithstanding . (b) Notwithstanding the restriction set forth in this Section 2.1, the Operating Partnership and any Subsidiary may dispose of any Gain Limitation Property (or any interest therein) if such disposition qualifies as a “like-kind exchange” under Section 1031 of the Code, or an involuntary conversion under Section 1033 of the Code, or other transaction (including, but not limited to, a contribution of property to any entity that qualifies for the non-recognition of gain under Section 721 or Section 351 of the Code, or a merger or consolidation of the Partnership with or into another entity that qualifies for taxation as a “partnership” for federal income tax purposespurposes (a “Successor Partnership”)) that, as to each of the foregoing, does not result in the recognition of any taxable income or gain to any Protected Partner with respect to any of the OP Units; provided, however, that (i) in the event of a disposition under Section 1031 or Section 1033 of the Code, any property that is acquired in exchange for or as a replacement for the Gain Limitation Property shall thereafter be considered the Gain Limitation Property, and such replacement property will be held by the Subsidiary that undertakes such exchange for a period of at least two years (or by the Partnership, if the Partnership directly owns the Gain Limitation Property prior to such exchange); (ii) in the case of a “like-kind exchange” under Section 1031 of the Code, if such exchange is with a “related party” within the meaning of Section 1031(f)(3) of the Code, any direct or indirect disposition by such related party of the Gain Limitation Property or any other transaction prior to the expiration of the two (2) year period following such exchange that would cause Section 1031(f)(1) of the Code to apply with respect to such Gain Limitation Property (including by reason of the application of Section 1031(f)(4) of the Code) shall be considered a violation of this Section 2.1 by the Partnership; (iii) if the Gain Limitation Property is transferred to another entity in a transaction in which gain or loss is not recognized, the entity and any intervening entities shall be considered Subsidiaries, and if the acquiring entity’s disposition of the Gain Limitation Property would cause Contributor to recognize gain or loss as a result thereof, the Gain Limitation Property shall still be subject to this Agreement; or (iv) if the Partnership directly or indirectly receives any property that is in whole or in part a “substituted basis property” as defined in Section 7701(a)(42) of the Code with respect to the Gain Limitation Property, such substituted basis property shall thereafter be considered part of the Gain Limitation Property.

Restrictions on Disposition of Gain Limitation Properties. (a) The Operating Partnership agrees for the benefit of each Protected Partner, for the term beginning as of the date hereof and ending on the earlier of the sale or transfer of all or substantially all of the assets of the Operating Partnership or the liquidation of the Operating Partnership in which the Protected Partners receive solely cash or marketable securities, without restriction, for their respective interests in the Operating Partnership (the “Tax Protection Period”), not to directly or indirectly sell, exchange, transfer, or otherwise dispose of a Gain Limitation Property or any interest therein, without regard to whether such disposition is voluntary or involuntary, in a transaction that causes would cause the Protected Partners or the Indirect Owners to recognize any Protected Gain. Without limiting the foregoing, the term “sale, exchange, transfer or disposition” by the Operating Partnership shall be deemed to include, and the prohibition shall extend to: (ai) any direct or indirect disposition by any direct or indirect Subsidiary of any Gain Limitation Property or any interest therein; (ii) any direct or indirect disposition by the Operating Partnership of any Gain Limitation Property (or any direct or indirect interest therein) that is subject to Section 704(c)(l)(B704(c)(1)(B) of the Code and the Treasury Regulations thereunder; and (biii) any distribution by the Operating Partnership to a Protected Partner that is subject to Section 737 of the Code and the Treasury Regulations thereunder. Without limiting the foregoing, a disposition shall include any transfer, voluntary or involuntary, by the Partnership or any Subsidiary in a foreclosure proceeding, pursuant to a deed in lieu of foreclosure, or in a bankruptcy proceeding. Notwithstanding the foregoing, this Section 2.1 shall not apply to a voluntary, actual disposition by a Protected Partner of Units in connection with a merger or consolidation of the Operating Partnership pursuant to which (1) the Protected Partner is offered as consideration for the Protected Partner’s OP Units either (A) cash or property treated as cash pursuant to Section 731 of the Code (“Cash Consideration”) or (B) partnership interests that are substantially equivalent (including value and profit and loss sharing) to the OP Units disposed of, and the receipt of such partnership interests would not result in the recognition of gain for federal, state, or local income tax purposes by the Protected Partner (“Operating Partnership Interest Consideration”); (2) the Protected Partner has the right to elect to receive solely Operating Partnership Interest Consideration in exchange for his OP Units and the continuing partnership has agreed in writing to assume the obligations of the Operating Partnership under this Agreement; (3) no Protected Gain is recognized by the Operating Partnership as a result of any partner of the Operating Partnership other than the Protected Partner receiving Cash Consideration; and (4) the Protected Partner elects or is deemed to elect to receive Cash Consideration. Furthermore, notwithstanding the restriction set forth in this Section 2.1, the Operating Partnership may dispose of any Gain Limitation Property (or any interest therein) if such disposition qualifies as a “like-kind exchange” under Section 1031 of the Code, or an involuntary conversion under Section 1033 of the Code, or other transaction (including, but not limited to, a contribution of property to any entity that qualifies for the non-recognition of gain under Section 721 or Section 351 of the Code, or a merger or consolidation of the Partnership with or into another entity that qualifies for taxation as a “partnership” for federal income tax purposes) that, as to each of the foregoing, does not result in the recognition of any taxable income or gain to any Protected Partner with respect to any of the OP Units; provided, however, that in the case of a “like-kind exchange” under Section 1031 of the Code, if such exchange is with a “related party” within the meaning of Section 1031(f)(3) of the Code, any direct or indirect disposition by such related party of the Gain Limitation Property or any other transaction prior to the expiration of the two (2) year period following such exchange that would cause Section 1031(f)(1) of the Code to apply with respect to such Gain Limitation Property (including by reason of the application of Section 1031(f)(4) of the Code) shall be considered a violation of this Section 2.1 by the Partnership.this