Common use of Tax Protection Provisions Clause in Contracts

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.

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 a 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 Stockholders pursuant to, and subject to the conditions of, this Section 6.04.