Common use of Structure to Defer Recognizing Income or Gain Clause in Contracts

Structure to Defer Recognizing Income or Gain. (a) Notwithstanding anything to the contrary contained in this Agreement, but subject to paragraph (b) hereof, until July 12, 2015, the Company and the Company Subsidiaries shall not sell or otherwise dispose of any Legacy Peach Assets in a Restricted Transaction without the prior written consent of PGHI (for so long as PGHI holds Interests) if (i) any income or gain recognized by the Company would be allocated to PGHI under Code Section 704(c) (net of any loss or deduction so recognized and allocated to PGHI under Code Section 704(c)) in respect of such Restricted Transaction and (ii) the Covered 704(c) Gain is greater than zero. (b) The Company and the Company Subsidiaries may sell or otherwise dispose of Legacy Peach Assets in a Restricted Transaction without the prior written consent of PGHI if the following conditions are satisfied: (i) Either: (1) the sum of all cash Distributions previously made to PGHI under this Agreement as of the end of each Estimated Tax Period in the calendar year in which such Restricted Transaction occurs equals or exceeds the product of (x) the sum of (A) the Covered 704(c) Gain plus (B) all other income and gain recognized by the Company for such taxable year that has been or will be allocated to PGHI as of the end of each such quarter multiplied by (y) the Tax Rate, or (2) PGHI receives a priority non-pro rata Distribution from the Company no later than thirty (30) days after the last day of the Estimated Tax Period of the calendar year in which the income or gain of the Company that is allocated to PGHI under Code Section 704(c) in respect of the Restricted Transaction is required to be recognized, equal to the difference between (x) the product of (A) the Covered 704(c) Gain multiplied by (B) the Tax Rate and (y) the sum of all cash Distributions or Tax Distributions previously made to PGHI under this Agreement as of the end of the relevant Estimated Tax Period minus the product of (A) all other income and gain recognized by the Company as of the end of such Estimated Tax Period that has been or will be allocated to PGHI multiplied by (B) the Tax Rate. (ii) Regardless of whether or not the Covered 704(c) Gain is greater than zero at the end of a relevant Estimated Tax Period, a priority non-pro rata Distribution shall be made to PGHI in order to permit the payment of state and local taxes, and United States federal “alternative minimum taxes,” attributable to any income or gain recognized by the Company and allocated to PGHI under Code Section 704(c) (net of any loss or deduction so recognized and allocated to PGHI under Code Section 704(c)) in respect of Restricted Transactions, taking into account any net operating loss carryforwards of PGHI with respect to such taxes, but subject to any applicable limitations in respect of such net operating loss carryforwards; provided, however, that income or gain shall be excluded from this Section 7.7(b)(ii) to the extent that Distributions, Tax Distributions or Distributions under Section 7.7(b)(i)(2) have been made on account of such income or gain sufficient to satisfy the applicable state and local taxes and United States federal “alternative minimum taxes” in respect of such income or gain. Any amounts distributed to PGHI pursuant to this Section 7.7(b)(i)(2) and Section 7.7(b)(ii) shall be treated as an advance of, and shall reduce the amount of, any distributions PGHI is otherwise entitled to receive under this Agreement (other than pursuant to Section 6.4(b) and this Section 7.7).

Structure to Defer Recognizing Income or Gain. (a) Notwithstanding anything to the contrary contained in this Agreement, but subject to paragraph (b) hereof, until July 12, 2015the fourth anniversary of the Effective Time (as defined in the Peach Merger Agreement), the Company and the Company Subsidiaries shall not sell or otherwise dispose of any Legacy Peach Assets in a Restricted Transaction without the prior written consent of PGHI Peach (for so long as PGHI Peach holds Interests) if (i) any income or gain recognized by the Company would be allocated to PGHI Peach under Code Section 704(c) (net of any loss or deduction so recognized and allocated to PGHI Peach under Code Section 704(c)) ) in respect of such Restricted Transaction and (ii) the Covered 704(c) Gain is greater than zero. (b) The Company and the Company Subsidiaries may sell or otherwise dispose of Legacy Peach Assets in a Restricted Transaction without the prior written consent of PGHI Peach if the following conditions are satisfied: (i) Either: (1) the sum of all cash Distributions previously made to PGHI Peach under this Agreement as of the end of each Estimated Tax Period in the calendar year in which such Restricted Transaction occurs equals or exceeds the product of (x) the sum of (A) the Covered 704(c) Gain plus (B) all other income and gain recognized by the Company for such taxable year that has been or will be allocated to PGHI the Peach member as of the end of each such quarter multiplied by (y) the Tax Rate, or (2) PGHI Peach receives a priority non-pro rata Distribution from the Company no later than thirty (30) days after the last day of the Estimated Tax Period of the calendar year in which the income or gain of the Company that is allocated to PGHI Peach under Code Section 704(c) in respect of the Restricted Transaction is required to be recognized, equal to the difference between (x) the product of (A) the Covered 704(c) Gain multiplied by (B) the Tax Rate and (y) the sum of all cash Distributions or Tax Distributions previously made to PGHI Peach under this Agreement as of the end of the relevant Estimated Tax Period minus the product of (A) all other income and gain recognized by the Company as of the end of such Estimated Tax Period that has been or will be allocated to PGHI Peach multiplied by (B) the Tax Rate. (ii) Regardless of whether or not the Covered 704(c) Gain is greater than zero at the end of a relevant Estimated Tax Period, a priority non-pro rata Distribution shall be made to PGHI Peach in order to permit the payment of state and local taxesTaxes, and United States U.S. federal “alternative minimum taxes,” attributable to any income or gain recognized by the Company and allocated to PGHI Peach under Code Section 704(c) (net of any loss or deduction so recognized and allocated to PGHI Peach under Code Section 704(c)) in respect of Restricted Transactions, taking into account any net operating loss carryforwards of PGHI Peach with respect to such taxesTaxes, but subject to any applicable limitations in respect of such net operating loss carryforwards; provided, however, that income or gain shall be excluded from this Section 7.7(b)(ii7.8(b)(ii) to the extent that Distributions, Tax Distributions or Distributions under Section 7.7(b)(i)(27.8(b)(i)(2) have been made on account of such income or gain sufficient to satisfy the applicable state and local taxes Taxes and United States U.S. federal “alternative minimum taxes” in respect of such income or gain. Any amounts distributed to PGHI Peach pursuant to this Section 7.7(b)(i)(27.8(b)(i)(2) and Section 7.7(b)(ii7.8(b)(ii) shall be treated as an advance of, and shall reduce the amount of, any distributions PGHI Peach is otherwise entitled to receive under this Agreement (other than pursuant to Section 6.4(b) and this Section 7.77.8).