Tax Protection Provisions. The parties agree and acknowledge that the Stockholder is a beneficiary of the tax protection provisions set forth in Section 6.04 of that certain Agreement and Plan of Merger, dated as of the date hereof, by and among the Company, Paramount Group Inc., a Delaware corporation (“PGI”), the Stockholder and the other stockholders of PGI named therein (the “PGI Merger Agreement”).
Tax Protection Provisions. (a) With respect to the period commencing on, and including, the Effective Time and ending on, and including, December 31, 2014 (the “Covenant Period”), the Company shall not, and shall cause the Operating Partnership to not, both (x) incur, directly or indirectly, any gain from the sale or exchange of a U.S. real property interest (as described in Section 897(c) of the Code) and (y) distribute any such gain or any interest in U.S. real property if the effect thereof would be to cause the Stockholder to be treated for U.S. federal income tax purposes, as recognizing “effectively connected income” as a result of the operation of Section 897 of the Code, solely as a result of such distribution, during a taxable year of the Stockholder ending on or before December 31, 2014, (“Prohibited Event”), provided, however, the Company shall not be deemed to have violated this undertaking to the extent the Prohibited Event was caused by an unaffiliated third party’s actions or exercise of its rights, including, without limitation, a third party’s exercise of buy-sell or forced sale rights, gain incurred by an entity not controlled by the Company or the Operating Partnership where the gain is allocated to the Company or the Operating Partnership as a result of its direct or indirect investment in the entity, or other similar event over which neither the Company nor the Operating Partnership would reasonably be expected to exercise control that results in a Prohibited Event (such covenant being referred to as the “No Gain Covenant”). The parties agree that the sole remedy for a violation of the No Gain Covenant shall be indemnification pursuant to, and subject to the conditions of, this Section 6.04 and, for the avoidance of doubt, not specific performance. Accordingly, for example, the Company may make a distribution in violation of No Gain Covenant to the extent it reasonably determines such distribution is required for the Company to maintain its qualification as a REIT for U.S. federal income tax purposes; provided that, in connection with such distribution, the Company will be required to indemnify the Stockholder pursuant to, and subject to the conditions of, this Section 6.04.
(b) If the Company becomes aware that a gain described in clause (x) of the first sentence of Section 6.04(a) is planned or scheduled to be incurred due to the actions or exercise of rights by an unaffiliated third party, the Company will use, and will cause the Operating Partnership to use,...
Tax Protection Provisions. The Members shall comply with the covenants and agreements set forth in Appendix III.
Tax Protection Provisions. The Mortgage Loan will not cause or result in any consequences to the Company, any General Partner, any Subsidiary or Investor under any tax protection agreement.
Tax Protection Provisions. A. Assignee agrees that, following the Closing: (i) the Partnership will not sell or otherwise dispose of the Property in a transaction in which taxable gain is recognized for a period of two years after the Closing Date (such period following the Closing Date being referred to herein as the "TAX PROTECTION PERIOD"), except that the Partnership may sell the Property in connection with a tax deferred exchange transaction entered into pursuant to Section 1031 of the Code pursuant to which no taxable gain is recognized by any Owner; and (ii) if the Partnership intends to sell or otherwise dispose of the Property in a transaction in which taxable gain is recognized during a period of five years after the expiration of the Tax Protection Period, the Partnership shall use its diligent best efforts to effect such sale pursuant to a tax deferred exchange transaction entered into pursuant to Section 1031 of the Code pursuant to which no taxable gain is recognized by any Owner. In the event the Partnership enters into any such tax deferred exchange transaction during the Tax Protection Period, the provisions of this Section 12 shall apply to the property received by the Partnership in such transaction for the remainder of the Tax Protection Period. Notwithstanding the foregoing, the Partnership may dispose of personal property and fixtures in the ordinary course of business or in connection with any rehabilitation or remodeling of the Premises.
B. Unless otherwise agreed to by all of the Owners who receive OP Units pursuant to this Agreement (such Owners for the purpose of this Section 12B only being herein called "Investors"), the Property Debt (as hereinafter defined) shall, on the last day of each calendar year during the Tax Protection Period, equal or exceed the Required Minimum Amount (as hereinafter defined). All Property Debt shall be allocated among the partners in Purchaser in accordance with Section 752 of the Code. As used herein, "PROPERTY DEBT" shall mean, as to each Investor, the aggregate amount of indebtedness guaranteed by such Investor pursuant to any Debt Guaranties (as hereinafter defined). If, at any time during the Tax Protection Period, any Investors agree to execute guaranties and/or other instruments (each, a "DEBT GUARANTY" and together with any other outstanding Replacement Debt Guaranty, the "DEBT GUARANTIES") directly guarantying an amount of indebtedness (which may be recourse or nonrecourse and may be owing to Purchaser or other entit...
