Common use of Special Allocation of Liabilities Clause in Contracts

Special Allocation of Liabilities. (i) The parties acknowledge that, at the closing of the Merger, the BRE Existing Credit Facilities (as defined in the Merger Agreement) will become the debt of the Operating Company and that, in connection with the Merger, each Protected Member will provide a personal guarantee of a portion of the BRE Existing Credit Facilities corresponding to such Protected Member’s Minimum Liability Amount. (ii) Subject to any pre-existing obligations to any of the other Members of the Operating Company, at any time after the maturity or repayment of the BRE Existing Credit Facilities, the Operating Company shall allocate Non-Recourse Indebtedness to Protected Members by applying Treasury Regulation Section 1.752-3(a)(3) to allocate Non-Recourse Indebtedness attributable to the Protected Property (for purposes of Treasury Regulation Section 1.752-3) to such Protected Member up to the amount by which the “built-in Section 704(c) gain” with respect to the Protected Property exceeds the amount of the Non-Recourse Indebtedness considered secured by the Protected Property and allocated to such Protected Member under Treasury Regulation Section 1.752-3(a)(2). (iii) If the amount of Non-Recourse Indebtedness allocated to a Protected Member pursuant to Section 2.2(b)(ii) hereof would be less than such Protected Member’s Minimum Liability Amount, the Operating Company shall offer to such Protected Member the opportunity to enter into a guarantee, reimbursement, indemnification, or capital contribution obligation agreement pursuant to which such Protected Member would enter into a written obligation to guarantee, reimburse, indemnify, or contribute capital upon the occurrence of certain events in such an amount that, when combined with any allocation of Non-Recourse Indebtedness of the Operating Company pursuant to Section 2.2(b)(ii) hereof, is sufficient, in the reasonable judgment of the Protected Member, to cause such Protected Member to be allocated indebtedness of the Operating Company equal to such Protected Member’s Minimum Liability Amount; provided, however, that the Operating Company shall not be required to allocate any amount of indebtedness to a Protected Member unless an Accounting Firm is of the view that such allocation is more likely than not permissible under Section 752 of the Code and the Treasury Regulations thereunder. If the Operating Company satisfies its obligations under Sections 2.2(b)(ii) & (iii) hereof and such Protected Member elects not to enter into such a guarantee, reimbursement, indemnification, or capital contribution obligation agreement, then the Operating Company shall have no liability for monetary damages under Article 3 or otherwise for any taxes incurred by such Protected Member as a result of such election.

Special Allocation of Liabilities. If the Partnership is required to provide notice to a Protected Partner pursuant to clause (2) of Section 2.1.3(b), the Partnership shall cooperate with the Protected Partner to arrange a special allocation of liabilities of the Partnership to the Protected Partner in such amount or amounts so as to increase the amount of partnership liabilities allocated to such Protected Partner for purposes of Section 752 of the Code by an amount necessary to prevent the Protected Partner from recognizing gain or loss for federal income tax purposes as a result of the intended repayment, retirement, refinancing or other reduction (other than scheduled amortization) in the amount of liabilities with respect to a Gain Limitation Property. The Partnership shall first provide the Protected Partner with Qualified Debt so as to provide allocations of Qualified Debt to a Protected Partner pursuant to the provisions of Treasury Regulation Section 1.752-3(a)(2) or 1.752-3(a)(3) and Section 465 of the Code and the Partnership shall also offer to the Protected Partner the opportunity either (i) The parties acknowledge to enter into a “bottom dollar guarantee” meeting the requirements of Section 2.1.3(d) of certain liabilities of the Partnership (substantially in the form set forth in Schedule 2.1(e)) (a “Bottom Dollar Guarantee”) in an amount such that, at when added to amounts to be allocated pursuant to the closing preceding portions of this sentence, totals not less than the Merger, the BRE Existing Credit Facilities (as defined in the Merger Agreement) will become the debt of the Operating Company and that, in connection with the Merger, each Protected Member will provide a personal guarantee of a portion of the BRE Existing Credit Facilities corresponding to such Protected Member’s Minimum Liability Amount. . Such Bottom Dollar Guarantee shall provide that the lender of the guaranteed liability is required to pursue all other collateral and security for the guaranteed liability (other than any Bottom Dollar Guarantees) prior to seeking to collect on such a guarantee, and the lender shall have recourse against the guarantee only if, and solely to the extent that, the total amount recovered by the lender with respect to the guaranteed liability after the lender has exhausted its remedies is less than the aggregate of the guaranteed amounts with respect to such liability, and the maximum aggregate liability of each Protected Partner for all guaranteed liabilities shall be limited to the amount actually guaranteed by such Protected Partner and/or (ii) Subject to any pre-existing obligations enter into a “deficit restoration obligation” pursuant to any which the Protected Partner would enter into a written obligation to restore part or all of its deficit capital account in the Partnership upon the occurrence of certain events (which written obligation may provide for an indemnity in favor of the other Members REIT as general partner of the Operating Company, at any time after Partnership). In order to minimize the maturity or repayment need to specially allocate liabilities of the BRE Existing Credit FacilitiesPartnership pursuant to the preceding sentence, the Operating Company shall allocate Non-Recourse Indebtedness to Protected Members by applying Partnership will use the additional method under Treasury Regulation Regulations Section 1.752-3(a)(3) to allocate Non-Recourse Indebtedness attributable to the Protected a Gain Limitation Property (for purposes of Treasury Regulation Regulations Section 1.752-3) to such the Protected Member up Partner to the amount by which extent that the “built-in Section 704(c) gain” with respect to the Protected Property those properties exceeds the amount of the Non-Recourse Indebtedness considered secured by the Protected such Gain Limitation Property and allocated to such the Protected Member Partner under Treasury Regulation Regulations Section 1.752-3(a)(2). (iii) If . For the amount avoidance of Non-Recourse Indebtedness allocated to a Protected Member pursuant to Section 2.2(b)(ii) hereof would be less than such Protected Member’s Minimum Liability Amountdoubt, if the Operating Company shall offer to such Protected Member the opportunity to enter into a guarantee, reimbursement, indemnification, or capital contribution obligation agreement pursuant to which such Protected Member would enter into a written obligation to guarantee, reimburse, indemnify, or contribute capital upon the occurrence of certain events in such an amount that, when combined with any allocation of Non-Recourse Indebtedness of the Operating Company pursuant to Section 2.2(b)(ii) hereof, is sufficient, in the reasonable judgment of the Protected Member, to cause such Protected Member to be allocated indebtedness of the Operating Company equal to such Protected Member’s Minimum Liability Amount; provided, however, that the Operating Company shall not be required to allocate any amount of indebtedness to a Protected Member unless an Accounting Firm is of the view that such allocation is more likely than not permissible under Section 752 of the Code and the Treasury Regulations thereunder. If the Operating Company Partnership satisfies its obligations under Sections 2.2(b)(iiSection 2.3(b) & and Section 2.3(c) and either (iiii) hereof and such the Protected Member Partner elects not to enter into such a guarantee, reimbursement, indemnification, Bottom Dollar Guarantee or capital contribution deficit restoration obligation agreementor (ii) there is a Final Determination that the Bottom Dollar Guarantee or deficit restoration obligation did not cause a special allocation of liabilities for federal income tax purposes to the Protected Partner in the full amount intended, then the Operating Company Partnership shall have no liability for monetary damages under Article 3 or otherwise Section 3.1 for any taxes incurred Taxes recognized by such the Protected Member Partner as a result of such electionelection or Final Determination.

Special Allocation of Liabilities. If the Partnership provides notice to a Protected Partner pursuant to Section 2.1, the Partnership shall cooperate with the Protected Partner to arrange a special allocation of liabilities of the Partnership to the Protected Partner in such amount or amounts so as to increase the amount of partnership liabilities allocated to such Protected Partner for purposes of Section 752 of the Code by an amount necessary to prevent the Protected Partner from recognizing gain or loss for federal income tax purposes as a result of the intended repayment, retirement, refinancing or other reduction (other than scheduled amortization) in the amount of liabilities with respect to a Gain Limitation Property, including, without limitation, offering to the Protected Partner the opportunity either (i) The parties acknowledge to enter into a “bottom dollar guarantee” of certain liabilities of the Partnership (substantially in the form set forth in Schedule 2.2(b)) in the amount of the Minimum Liability Amount (determined as of the Closing Date) pursuant to which the lender for the guaranteed liability is required to pursue all other collateral and security for the guaranteed liability (other than any “bottom dollar guarantees”) prior to seeking to collect on such a guarantee, and the lender shall have recourse against the guarantee only if, and solely to the extent that, at the closing total amount recovered by the lender with respect to the guaranteed liability after the lender has exhausted its remedies is less than the aggregate of the Merger, the BRE Existing Credit Facilities (as defined in the Merger Agreement) will become the debt of the Operating Company and that, in connection guaranteed amounts with the Merger, each Protected Member will provide a personal guarantee of a portion of the BRE Existing Credit Facilities corresponding respect to such Protected Member’s Minimum Liability Amount. liability, and the maximum aggregate liability of each partner for all guaranteed liabilities shall be limited to the amount actually guaranteed by such partner or (ii) Subject to any pre-existing obligations enter into a “deficit restoration obligation” pursuant to any which the Protected Partner would enter into a written obligation to restore part or all of its deficit capital account in the Partnership upon the occurrence of certain events (which written obligation may provide for an indemnity in favor of the other Members REIT as general partner of the Operating Company, at any time after Partnership). In order to minimize the maturity or repayment need to specially allocate liabilities of the BRE Existing Credit FacilitiesPartnership pursuant to the preceding sentence, the Operating Company shall allocate Non-Recourse Indebtedness to Protected Members by applying Partnership will use the additional method under Treasury Regulation Regulations Section 1.752-3(a)(3) to allocate Non-Recourse Indebtedness attributable Nonrecourse Liabilities considered secured by a Gain Limitation Property to the Protected Property (for purposes of Treasury Regulation Section 1.752-3) to such Protected Member up Partner to the amount by which extent that the “built-in Section 704(c) gain” with respect to the Protected Property those properties exceeds the amount of the Non-Recourse Indebtedness Nonrecourse Liabilities considered secured by the Protected such Gain Limitation Property and allocated to such the Protected Member Partner under Treasury Regulation Regulations Section 1.752-3(a)(2). (iii) If the amount of Non-Recourse Indebtedness allocated to a Protected Member pursuant to Section 2.2(b)(ii) hereof would be less than such Protected Member’s Minimum Liability Amount, the Operating Company shall offer to such Protected Member the opportunity to enter into a guarantee, reimbursement, indemnification, or capital contribution obligation agreement pursuant to which such Protected Member would enter into a written obligation to guarantee, reimburse, indemnify, or contribute capital upon the occurrence of certain events in such an amount that, when combined with any allocation of Non-Recourse Indebtedness of the Operating Company pursuant to Section 2.2(b)(ii) hereof, is sufficient, in the reasonable judgment of the Protected Member, to cause such Protected Member to be allocated indebtedness of the Operating Company equal to such Protected Member’s Minimum Liability Amount; provided, however, that the Operating Company shall not be required to allocate any amount of indebtedness to a Protected Member unless an Accounting Firm is of the view that such allocation is more likely than not permissible under Section 752 of the Code and the Treasury Regulations thereunder. If the Operating Company satisfies its obligations under Sections 2.2(b)(ii) & (iii) hereof and such Protected Member elects not to enter into such a guarantee, reimbursement, indemnification, or capital contribution obligation agreement, then the Operating Company shall have no liability for monetary damages under Article 3 or otherwise for any taxes incurred by such Protected Member as a result of such election.

Special Allocation of Liabilities. If the Partnership provides notice to a Protected Partner pursuant to Section 3.1, the Partnership shall cooperate with the Protected Partner to arrange a special allocation of liabilities of the Partnership to the Protected Partner in such amount or amounts so as to increase the amount of partnership liabilities allocated to such Protected Partner for purposes of Section 752 of the Code by an amount necessary to prevent the Protected Partner from recognizing gain or loss for federal income tax purposes as a result of the intended repayment, retirement, refinancing or other reduction (other than scheduled amortization) in the amount of liabilities with respect to a Gain Limitation Property, including, without limitation, offering to the Protected Partner the opportunity either (i) The parties acknowledge to enter into a “bottom dollar guarantee” of certain liabilities of the Partnership (substantially in the form set forth in Schedule 3.2(b)) in the amount of the Minimum Liability Amount (determined as of the Closing Date) pursuant to which the lender for the guaranteed liability is required to pursue all other collateral and security for the guaranteed liability (other than any “bottom dollar guarantees”) prior to seeking to collect on such a guarantee, and the lender shall have recourse against the guarantee only if, and solely to the extent that, at the closing total amount recovered by the lender with respect to the guaranteed liability after the lender has exhausted its remedies is less than the aggregate of the Merger, the BRE Existing Credit Facilities (as defined in the Merger Agreement) will become the debt of the Operating Company and that, in connection guaranteed amounts with the Merger, each Protected Member will provide a personal guarantee of a portion of the BRE Existing Credit Facilities corresponding respect to such Protected Member’s Minimum Liability Amount. liability, and the maximum aggregate liability of each partner for all guaranteed liabilities shall be limited to the amount actually guaranteed by such partner or (ii) Subject to any pre-existing obligations enter into a “deficit restoration obligation” pursuant to any which the Protected Partner would enter into a written obligation to restore part or all of its deficit capital account in the Partnership upon the occurrence of certain events (which written obligation may provide for an indemnity in favor of the other Members REIT as general partner of the Operating Company, at any time after Partnership). In order to minimize the maturity or repayment need to specially allocate liabilities of the BRE Existing Credit FacilitiesPartnership pursuant to the preceding sentence, the Operating Company shall allocate Non-Recourse Indebtedness to Protected Members by applying Partnership will use the additional method under Treasury Regulation Regulations Section 1.752-3(a)(3) to allocate Non-Recourse Indebtedness attributable Nonrecourse Liabilities considered secured by a Gain Limitation Property to the Protected Property (for purposes of Treasury Regulation Section 1.752-3) to such Protected Member up Partner to the amount by which extent that the “built-in Section 704(c) gain” with respect to the Protected Property those properties exceeds the amount of the Non-Recourse Indebtedness Nonrecourse Liabilities considered secured by the Protected such Gain Limitation Property and allocated to such the Protected Member Partner under Treasury Regulation Regulations Section 1.752-3(a)(2). (iii) If the amount of Non-Recourse Indebtedness allocated to a Protected Member pursuant to Section 2.2(b)(ii) hereof would be less than such Protected Member’s Minimum Liability Amount, the Operating Company shall offer to such Protected Member the opportunity to enter into a guarantee, reimbursement, indemnification, or capital contribution obligation agreement pursuant to which such Protected Member would enter into a written obligation to guarantee, reimburse, indemnify, or contribute capital upon the occurrence of certain events in such an amount that, when combined with any allocation of Non-Recourse Indebtedness of the Operating Company pursuant to Section 2.2(b)(ii) hereof, is sufficient, in the reasonable judgment of the Protected Member, to cause such Protected Member to be allocated indebtedness of the Operating Company equal to such Protected Member’s Minimum Liability Amount; provided, however, that the Operating Company shall not be required to allocate any amount of indebtedness to a Protected Member unless an Accounting Firm is of the view that such allocation is more likely than not permissible under Section 752 of the Code and the Treasury Regulations thereunder. If the Operating Company satisfies its obligations under Sections 2.2(b)(ii) & (iii) hereof and such Protected Member elects not to enter into such a guarantee, reimbursement, indemnification, or capital contribution obligation agreement, then the Operating Company shall have no liability for monetary damages under Article 3 or otherwise for any taxes incurred by such Protected Member as a result of such election.

Special Allocation of Liabilities. If the Partnership provides notice to a Protected Partner pursuant to Section 3.1, the Partnership shall cooperate with the Protected Partner to arrange a special allocation of liabilities of the Partnership to the Protected Partner in such amount or amounts so as to increase the amount of partnership liabilities allocated to such Protected Partner for purposes of Section 752 of the Code by an amount necessary to prevent the Protected Partner from recognizing gain or loss for federal income tax purposes as a result of the intended repayment, retirement, refinancing or other reduction (other than scheduled amortization) in the amount of certain liabilities with respect to a Gain Limitation Property, including, without limitation, offering to the Protected Partner the opportunity either (i) The parties acknowledge to enter into a “bottom dollar guarantee” of liabilities of the Partnership (substantially in the form set forth in Schedule 3.2(b)) in the amount of the Minimum Liability Amount (determined as of the Closing Date) pursuant to which the lender for the guaranteed liability is required to pursue all other collateral and security for the guaranteed liability (other than any “bottom dollar guarantees”) prior to seeking to collect on such a guarantee, and the lender shall have recourse against the guarantee only if, and solely to the extent that, at the closing total amount recovered by the lender with respect to the guaranteed liability after the lender has exhausted its remedies is less than the aggregate of the Merger, the BRE Existing Credit Facilities (as defined in the Merger Agreement) will become the debt of the Operating Company and that, in connection guaranteed amounts with the Merger, each Protected Member will provide a personal guarantee of a portion of the BRE Existing Credit Facilities corresponding respect to such Protected Member’s Minimum Liability Amount. liability, and the maximum aggregate liability of each partner for all guaranteed liabilities shall be limited to the amount actually guaranteed by such partner or (ii) Subject to any pre-existing obligations enter into a “deficit restoration obligation” pursuant to any which the Protected Partner would enter into a written obligation to restore part or all of its deficit capital account in the Partnership upon the occurrence of certain events (which written obligation may provide for an indemnity in favor of the other Members REIT as general partner of the Operating Company, at any time after Partnership). In order to minimize the maturity or repayment need to specially allocate liabilities of the BRE Existing Credit FacilitiesPartnership pursuant to the preceding sentence, the Operating Company shall allocate Non-Recourse Indebtedness to Protected Members by applying Partnership will use the additional method under Treasury Regulation Regulations Section 1.752-3(a)(3) to allocate Non-Recourse Indebtedness attributable Nonrecourse Liabilities considered secured by a Gain Limitation Property to the Protected Property (for purposes of Treasury Regulation Section 1.752-3) to such Protected Member up Partner to the amount by which extent that the “built-in Section 704(c) gain” with respect to the Protected Property those properties exceeds the amount of the Non-Recourse Indebtedness Nonrecourse Liabilities considered secured by the Protected such Gain Limitation Property and allocated to such the Protected Member Partner under Treasury Regulation Regulations Section 1.752-3(a)(2). (iii) If the amount of Non-Recourse Indebtedness allocated to a Protected Member pursuant to Section 2.2(b)(ii) hereof would be less than such Protected Member’s Minimum Liability Amount, the Operating Company shall offer to such Protected Member the opportunity to enter into a guarantee, reimbursement, indemnification, or capital contribution obligation agreement pursuant to which such Protected Member would enter into a written obligation to guarantee, reimburse, indemnify, or contribute capital upon the occurrence of certain events in such an amount that, when combined with any allocation of Non-Recourse Indebtedness of the Operating Company pursuant to Section 2.2(b)(ii) hereof, is sufficient, in the reasonable judgment of the Protected Member, to cause such Protected Member to be allocated indebtedness of the Operating Company equal to such Protected Member’s Minimum Liability Amount; provided, however, that the Operating Company shall not be required to allocate any amount of indebtedness to a Protected Member unless an Accounting Firm is of the view that such allocation is more likely than not permissible under Section 752 of the Code and the Treasury Regulations thereunder. If the Operating Company satisfies its obligations under Sections 2.2(b)(ii) & (iii) hereof and such Protected Member elects not to enter into such a guarantee, reimbursement, indemnification, or capital contribution obligation agreement, then the Operating Company shall have no liability for monetary damages under Article 3 or otherwise for any taxes incurred by such Protected Member as a result of such election.

Special Allocation of Liabilities. If the Partnership is required to provide notice to a Protected Partner pursuant to clause (ii) of Section 2.1(c)(ii)(B), the Partnership shall cooperate with the Protected Partner to arrange a special allocation of liabilities of the Partnership to the Protected Partner in such amount or amounts so as to increase the amount of partnership liabilities allocated to such Protected Partner for purposes of Section 752 of the Code by an amount necessary to prevent the Protected Partner from recognizing gain or loss for federal income tax purposes as a result of the intended repayment, retirement, refinancing or other reduction (other than scheduled amortization) in the amount of liabilities with respect to a Gain Limitation Property. The Partnership shall first provide the Protected Partner with Qualified Debt so as to provide allocations of Qualified Debt to a Protected Partner pursuant to the provisions of Treasury Regulation Section 1.752-3(a)(2) or 1.752-3(a)(3) and Section 465 of the Code and the Partnership shall also offer to the Protected Partner the opportunity either (i) The parties acknowledge to enter into a “bottom dollar guarantee” meeting the requirements of Section 2.1(c)(iv) of certain liabilities of the Partnership (substantially in the form set forth in Schedule 2.1(e)) (a “Bottom Dollar Guarantee”) in an amount such that, at when added to amounts to be allocated pursuant to the closing preceding portions of this sentence, totals not less than the Merger, the BRE Existing Credit Facilities (as defined in the Merger Agreement) will become the debt of the Operating Company and that, in connection with the Merger, each Protected Member will provide a personal guarantee of a portion of the BRE Existing Credit Facilities corresponding to such Protected Member’s Minimum Liability Amount. . Such Bottom Dollar Guarantee shall provide that the lender of the guaranteed liability is required to pursue all other collateral and security for the guaranteed liability (other than any Bottom Dollar Guarantees) prior to seeking to collect on such a guarantee, and the lender shall have recourse against the guarantee only if; and solely to the extent that, the total amount recovered by the lender with respect to the guaranteed liability after the lender has exhausted its remedies is less than the aggregate of the guaranteed amounts with respect to such liability, and the maximum aggregate liability of each Protected Partner for all guaranteed liabilities shall be limited to the amount actually guaranteed by such Protected Partner and/or (ii) Subject to any pre-existing obligations enter into a “deficit restoration obligation” pursuant to any which the Protected Partner would enter into a written obligation to restore part or all of its deficit capital account in the Partnership upon the occurrence of certain events (which written obligation may provide for an indemnity in favor of the other Members REIT as general partner of the Operating Company, at any time after Partnership). In order to minimize the maturity or repayment need to specially allocate liabilities of the BRE Existing Credit FacilitiesPartnership pursuant to the preceding sentence, the Operating Company shall allocate Non-Recourse Indebtedness to Protected Members by applying Partnership will use the additional method under Treasury Regulation Regulations Section 1.752-3(a)(3) to allocate Non-Recourse Indebtedness attributable to the Protected a Gain Limitation Property (for purposes of Treasury Regulation Regulations Section 1.752-3) to such the Protected Member up Partner to the amount by which extent that the “built-in Section 704(c) gain” with respect to the Protected Property those properties exceeds the amount of the Non-Recourse Indebtedness considered secured by the Protected such Gain Limitation Property and allocated to such the Protected Member Partner under Treasury Regulation Regulations Section 1.752-3(a)(2). (iii) If . For the amount avoidance of Non-Recourse Indebtedness allocated to a Protected Member pursuant to Section 2.2(b)(ii) hereof would be less than such Protected Member’s Minimum Liability Amountdoubt, if the Operating Company shall offer to such Protected Member the opportunity to enter into a guarantee, reimbursement, indemnification, or capital contribution obligation agreement pursuant to which such Protected Member would enter into a written obligation to guarantee, reimburse, indemnify, or contribute capital upon the occurrence of certain events in such an amount that, when combined with any allocation of Non-Recourse Indebtedness of the Operating Company pursuant to Section 2.2(b)(ii) hereof, is sufficient, in the reasonable judgment of the Protected Member, to cause such Protected Member to be allocated indebtedness of the Operating Company equal to such Protected Member’s Minimum Liability Amount; provided, however, that the Operating Company shall not be required to allocate any amount of indebtedness to a Protected Member unless an Accounting Firm is of the view that such allocation is more likely than not permissible under Section 752 of the Code and the Treasury Regulations thereunder. If the Operating Company Partnership satisfies its obligations under Sections 2.2(b)(iiSection 2.1(c)(ii) & or Section 2.1(c)(iii) and either (iiii) hereof and such the Protected Member Partner elects not to enter into such a guarantee, reimbursement, indemnification, Bottom Dollar Guarantee or capital contribution deficit restoration obligation agreementor (ii) there is a Final Determination that the Bottom Dollar Guarantee or deficit restoration obligation did not cause a special allocation of liabilities for federal income tax purposes to the Protected Partner in the full amount intended, then the Operating Company Partnership shall have no liability for monetary damages under Article 3 or otherwise Section 3.1 for any taxes incurred Taxes recognized by such the Protected Member Partner as a result of such electionelection or Final Determination.