Common use of Monetary Damages Clause in Contracts

Monetary Damages. In the event that the Partnership breaches its obligations set forth in Article 2 with respect to a Protected Partner, the Protected Partner’s sole remedy shall be to receive from the Partnership, and the Partnership shall pay to such Protected Partner as damages, an amount equal to the aggregate federal, state and local income taxes incurred by the Protected Partner or an Indirect Owner as a result of the income or gain allocated to, or otherwise recognized by, such Protected Partner with respect to its Units by reason of such breach, plus an amount equal to the aggregate federal, state, and local income taxes payable by the Protected Partner or an Indirect Owner as a result of the receipt of any payment required under this Section 3.1. For the avoidance of doubt, so long as the Partnership provides the opportunities referenced in Sections 2.1 and 2.3 and complies with the notification requirement of Section 2.2, the Partnership shall have no liability pursuant to this Section 3.1 in the event it is determined that a Protected Partner has not been specially allocated for purposes of Section 752 of the Code an amount of partnership liabilities equal to such Protected Partner’s Minimum Liability Amount or is not treated as receiving a special allocation of partnership liabilities for purposes of Section 465 of the Code that increases such Protected Partner’s “at risk” amount by an amount equal to such Protected Partner’s Minimum Liability Amount. Furthermore, the Partnership shall have no liability pursuant to this Section 3.1 if the Partnership merges into another entity treated as a partnership for federal income tax purposes or the Protected Partner accepts an offer to exchange its Units for equity interests in another entity treated as a partnership for federal income tax purposes so long as, in either case, such successor entity assumes or agrees to assume the Partnership’s obligations pursuant to this Agreement. For purposes of computing the amount of federal, state, and local income taxes required to be paid by a Protected Partner (or Indirect Owner), (i) any deduction for state income taxes payable as a result thereof actually allowed in computing federal income taxes shall be taken into account, and (ii) a Protected Partner’s (or Indirect Owner’s) tax liability shall be computed using the highest federal, state and local marginal income tax rates that would be applicable to such Protected Partner’s (or Indirect Owner’s) taxable income (taking into account the character and type of such income or gain) for the year with respect to which the taxes must be paid, without regard to any deductions, losses or credits that may be available to such Protected Partner (or Indirect Owner) that would reduce or offset its actual taxable income or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner (or Indirect Owner) to offset other income, gain or taxes of the Protected Partner (or Indirect Owner), either in the current year, in earlier years, or in later years).

Monetary Damages. In the event that the Partnership breaches its obligations set forth in Article 2 2, with respect to a Protected Partner, the Protected Partner’s sole remedy shall be to receive from the Partnership, and the Partnership shall pay to such Protected Partner as damages, an amount equal to (a) the aggregate federal, state state, and local income taxes incurred by the Protected Partner or an Indirect Owner with respect to the Protected Gain that is allocable to such Protected Partner under the Partnership Agreement as a result of the income or gain allocated to, or otherwise recognized by, such Protected Partner with respect to its Units by reason disposition of such breach, the Gain Limitation Property plus an amount equal to (b) the aggregate federal, state, and local income taxes payable by the Protected Partner or an Indirect Owner as a result of the receipt of any payment required under this Section 3.1. For the avoidance of doubt, so long as the Partnership provides the opportunities referenced in Sections 2.1 and 2.3 and complies with the notification requirement of Section 2.2, the Partnership shall have no liability pursuant to this Section 3.1 in the event it is determined that a Protected Partner has not been specially allocated for purposes of Section 752 of the Code an amount of partnership liabilities equal to such Protected Partner’s Minimum Liability Amount or is not treated as receiving a special allocation of partnership liabilities for purposes of Section 465 of the Code that increases such Protected Partner’s “at risk” amount by an amount equal to such Protected Partner’s Minimum Liability Amount. Furthermore, the Partnership shall have no liability pursuant to this Section 3.1 if the Partnership merges into another entity treated as a partnership for federal income tax purposes or the Protected Partner accepts an offer to exchange its Units for equity interests in another entity treated as a partnership for federal income tax purposes so long as, in either case, such successor entity assumes or agrees to assume the Partnership’s obligations pursuant to this Agreement. For purposes of computing the amount of federal, state, and local income taxes required to be paid by a Protected Partner (or Indirect Owner), (i) any deduction for state income taxes payable as a result thereof actually allowed in computing federal income taxes shall be taken into account, and (ii) a Protected Partner’s (or Indirect Owner’s) tax liability shall be computed using the highest federal, state and local marginal income tax rates that would be applicable to such Protected Partner’s (or Indirect Owner’s) taxable income (taking into account the character and type of such income or gain) for the year with respect to which the taxes must be paid, without regard to any deductions, losses or credits that may be available to such Protected Partner (or Indirect Owner) that would reduce or offset its actual taxable income or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner (or Indirect Owner) to offset other income, gain or taxes of the Protected Partner (or Indirect Owner), either in the current year, in earlier years, or in later years).

Monetary Damages. In the event that the Partnership breaches its obligations set forth in Article 2 with respect to a Protected Partner, Partner the Protected Partner’s sole remedy right shall be to receive from the Partnership, and the Partnership shall pay to such Protected Partner as damages, an amount equal to the aggregate federal, state and local income taxes incurred by the Protected Partner or an Indirect Owner as a result of the income or gain allocated to, or otherwise recognized by, such Protected Partner with respect to its Units by reason of such breach, plus an amount equal to the aggregate federal, state, and local income taxes payable by the Protected Partner or an Indirect Owner as a result of the receipt of any payment required under this Section 3.1. For the avoidance of doubt, so long as the Partnership provides the opportunities referenced opportunity to a Protected Partner to enter into a Bottom Guarantee or Deficit Restoration Obligation pursuant to the forms attached hereto or otherwise agreed to by the parties and the Partnership uses commercially reasonable efforts to maintain outstanding the relevant partnership liabilities in Sections 2.1 and 2.3 and complies accordance with the notification requirement of Section 2.2Article 2, the Partnership shall have no liability pursuant to this Section 3.1 in the event it is determined that a Protected Partner has not been specially allocated for purposes of Section 752 of the Code an amount of partnership liabilities equal to such Protected Partner’s Minimum Liability Amount or is not treated as receiving a special allocation of partnership liabilities for purposes of Section 465 of the Code that increases such Protected Partner’s “at risk” amount by an amount equal to such Protected Partner’s Minimum Liability Amount. Furthermore, the Partnership shall have no liability pursuant to this Section 3.1 if the Partnership merges into another entity treated as a partnership for federal income tax purposes or the Protected Partner accepts an offer to exchange its OP Units for equity interests in another entity treated as a partnership for federal income tax purposes so long as, in either case, such successor entity assumes or agrees to assume the Partnership’s obligations pursuant to this Agreement. For purposes of computing the amount of federal, state, and local income taxes required to be paid by a Protected Partner (or Indirect Owner), (i) any deduction for state income taxes payable as a result thereof actually allowed in computing federal income taxes shall be taken into account, and (ii) a Protected Partner’s (or Indirect Owner’s) tax liability shall be computed using the highest federal, state and local marginal income tax rates that would be applicable to such Protected Partner’s (or Indirect Owner’s) taxable income (taking into account the character and type of such income or gain) for the year with respect to which the taxes must be paid, without regard to any deductions, losses or credits that may be available to such Protected Partner (or Indirect Owner) that would reduce or offset its actual taxable income or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner (or Indirect Owner) to offset other income, gain or taxes of the Protected Partner (or Indirect Owner), either in the current year, in earlier years, or in later years).

Monetary Damages. In the event that the Partnership breaches its obligations set forth in Article 2 2, with respect to a Protected Partner, the Protected Partner’s sole remedy shall be to receive from the Partnership, and the Partnership shall pay to such Protected Partner as damages, an amount equal to to: (a) the aggregate federal, state state, and local income taxes incurred by the Protected Partner or an Indirect Owner with respect to the Protected Gain that is allocable to such Protected Partner under the Partnership Agreement as a result of the income or gain allocated todisposition of the Gain Limitation Property, or otherwise recognized by, such Protected Partner with respect to its Units by reason of such breach, plus plus (b) an amount equal to the aggregate federal, state, and local income taxes payable by the Protected Partner or an Indirect Owner as a result of the receipt of any payment required under this Section 3.1. For the avoidance of doubt, so long as the Partnership provides the opportunities referenced in Sections 2.1 and 2.3 and complies with the notification requirement of Section 2.2, the Partnership shall have no liability pursuant to this Section 3.1 in the event it is determined that a Protected Partner has not been specially allocated for purposes of Section 752 of the Code an amount of partnership liabilities equal to such Protected Partner’s Minimum Liability Amount or is not treated as receiving a special allocation of partnership liabilities for purposes of Section 465 of the Code that increases such Protected Partner’s “at risk” amount by an amount equal to such Protected Partner’s Minimum Liability Amount. Furthermore, the Partnership shall have no liability pursuant to this Section 3.1 if the Partnership merges into another entity treated as a partnership for federal income tax purposes or the Protected Partner accepts an offer to exchange its Units for equity interests in another entity treated as a partnership for federal income tax purposes so long as, in either case, such successor entity assumes or agrees to assume the Partnership’s obligations pursuant to this Agreement. For purposes of computing the amount of federal, state, and local income taxes required to be paid by a Protected Partner (or Indirect Owner), (ib) any deduction for state income taxes payable as a result thereof actually allowed in computing federal income taxes shall be taken into account, and (iic) a Protected Partner’s (or Indirect Owner’s) tax liability shall be computed using the highest federal, state and local marginal income tax rates that would be applicable to such Protected Partner’s (or Indirect Owner’s) taxable income (taking into account the character and type of such income or gain) for the year with respect to which the taxes must be paid, without regard to any deductions, losses or credits that may be available to such Protected Partner (or Indirect Owner) that would reduce or offset its actual taxable income or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner (or Indirect Owner) to offset other income, gain or taxes of the Protected Partner (or Indirect Owner), either in the current year, in earlier years, or in later years).

Monetary Damages. In the event that the Partnership or a Subsidiary engages in a transaction described in Section 2.1, or breaches its obligations set forth in Article 2 or Article 3, with respect to a Protected Partner that results in the recognition of Protected Gain or other tax liability due to the Partnership’s failure to allocate Partnership liabilities to such Protected Partner up to such Protected Partner’s Minimum Liability Amount in violation of Article 3, the Protected Partner’s sole remedy shall be to receive from the Partnership, and the Partnership shall pay to such Protected Partner as damages, an amount equal to: (a) in the case of a transaction described in Section 2.1 or a violation of Article ▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, and local income taxes incurred by the Protected Partner or an Indirect Owner with respect to the Protected Gain that is allocable to such Protected Partner under the Partnership Agreement as a result of the disposition of Gain Limitation Property; provided, however, that the Partnership or a Subsidiary will only have an obligation to the extent that the 704(c) Value of the Properties disposed of in all transactions following the Contribution Date exceeds the Applicable Percentage at such time of the 704(c) Value of all Properties contributed, in which case the amount of income taxes incurred that shall be treated as damages shall be equal to the positive amount of (i) the aggregate federal, state state, and local income taxes incurred by the Protected Partner or an Indirect Owner with respect to the Protected Gain that is allocable to such Protected Partner under the Partnership Agreement as a result of the disposition of Gain Limitation Property during the current fiscal year, minus (ii) the greater of (A)(I) the Damage Limitation Amount determined for the current fiscal year, minus (II) the net amount of the aggregate federal, state, and local income taxes incurred by the Protected Partner or an Indirect Owner with respect to Protected Gain allocated to such Protected Partner under the Partnership Agreement as a result of the disposition of Gain Limitation Property during any prior fiscal year, less the aggregate damages paid by the Partnership for each such prior fiscal year pursuant to this Section 4.1(a), in each case described in this clause (II) as adjusted by any change in ownership percentage of such Protected Partner in the Partnership from such prior fiscal year as compared to the current fiscal year, and (B) zero; and (b) in the case of a violation of Article ▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ and local income taxes incurred by the Protected Partner or an Indirect Owner as a result of the income or gain allocated to, or otherwise recognized by, such Protected Partner with respect to its Units solely due to such breach multiplied by reason of such breach, plus an amount equal to (i) 100% minus (ii) the aggregate federal, state, and local income taxes payable by the Protected Partner or an Indirect Owner as a result of the receipt of any payment required under this Section 3.1Applicable Percentage. For the avoidance of doubt, so long as (i) the Partnership complies with Section 3.1, provides the opportunities referenced in Sections 2.1 and 2.3 Section 3.3, complies with Section 3.4 if applicable, and complies with the notification requirement of Section 2.23.2 or (ii) there is a Final Determination that any Contribution or portion thereof should be treated for federal income tax purposes as a taxable exchange rather than a tax-deferred transaction as long as such Final Determination is not attributable to the Partnership not allocating sufficient Partnership liabilities to the Protected Partner as of the date of the Contribution in violation of Article 3, the Partnership shall have no liability pursuant to this Section 3.1 4.1 in the event it is determined that a Protected Partner has not been specially allocated for purposes of Section 752 of the Code an amount of partnership Partnership liabilities equal to such Protected Partner’s Minimum Liability Amount or is not treated as receiving a special allocation of partnership Partnership liabilities for purposes of Section 465 of the Code that increases such Protected Partner’s “at risk” amount by an amount equal to such Protected Partner’s Minimum Liability Amount. Furthermore, the Partnership shall have no liability pursuant to this Section 3.1 4.1 if the Partnership merges into another entity treated as a partnership for federal income tax purposes or the Protected Partner accepts an offer to exchange its Units for equity interests in another entity treated as a partnership for federal income tax purposes so long as, in either case, such successor entity has a net worth at least equal to that of the Partnership and assumes or agrees to assume the Partnership’s obligations pursuant to this Agreement. For purposes of computing the amount of federal, state, and local income taxes required to be paid by a Protected Partner (or Indirect Owner), (i) any deduction for state income taxes payable as a result thereof actually allowed in computing federal income taxes shall be taken into account, (ii) all dividends paid deductions allowed in computing federal income taxes shall be taken into account other than any portion of a dividends paid deduction of Whitestone REIT due to a special distribution declared by Whitestone REIT solely as a result of a violation of Article 2 or Article 3 by the Partnership or a Subsidiary, and (iiiii) a Protected Partner’s (or Indirect Owner’s) tax liability shall be computed using the highest federal, state and local marginal income tax rates including the net investment income tax under Section 1411 of the Code that would be applicable to such Protected Partner’s (or Indirect Owner’s) taxable income (taking into account the character and type of such income or gain) for the year with respect to which the taxes must be paid, without regard regard, except as otherwise set forth above, to any deductions, losses or credits that may be available to such Protected Partner (or Indirect Owner) that would reduce or offset its actual taxable income or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner (or Indirect Owner) to offset other income, gain or taxes of the Protected Partner (or Indirect Owner), either in the current year, in earlier years, or in later years).

Monetary Damages. In the event that the Partnership or a Subsidiary breaches its obligations set forth in Article 2 or Article 3 with respect to a Protected PartnerPartner (or Indirect Owner), the Protected Partner’s (and Indirect Owner’s) sole remedy right shall be to receive from the Partnership, and the Partnership shall pay to such Protected Partner as damages, an amount equal to to: (i) in the aggregate federalcase of a violation of Article 3, state ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ and local income taxes (including any applicable federal unearned income Medicare contribution under Section 1411 of the Code) incurred by the Protected Partner (or an Indirect Owner Owner) as a result of the income or gain allocated to, or otherwise recognized by, such Protected Partner with respect to its Units (or Indirect Owner) by reason of such breach; and (ii) in the case of a violation of Article 2, plus an amount equal to the aggregate federal▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, state▇▇▇▇▇, and local income taxes payable by (including any applicable federal unearned income Medicare contribution under Section 1411 of the Code) incurred with respect to the Protected Gain incurred with respect to the Protected Property that is allocable to such Protected Partner (or Indirect Owner); plus an additional amount so that, after the payment by such Protected Partner (or Indirect Owner Owner) of all federal, state and local income taxes on amounts received pursuant to this Section 4.1 (including any tax liability incurred as a result of the receipt of any payment required under this Section 3.1. For the avoidance of doubt, so long as the Partnership provides the opportunities referenced in Sections 2.1 and 2.3 and complies with the notification requirement of Section 2.2, the Partnership shall have no liability pursuant to this Section 3.1 in the event it is determined that a Protected Partner has not been specially allocated for purposes of Section 752 of the Code an amount of partnership liabilities equal to such Protected Partner’s Minimum Liability Amount (or is not treated as receiving a special allocation Indirect Owner’s) receipt of partnership liabilities for purposes of Section 465 of the Code that increases such indemnity payment), such Protected Partner’s “at risk” amount by Partner (or Indirect Owner) retains an amount equal to such Protected Partner’s Minimum Liability Amount. Furthermoreits total federal, the Partnership shall have no state and local income tax liability pursuant to this Section 3.1 if the Partnership merges into another entity treated incurred as a partnership for federal income tax purposes or the Protected Partner accepts an offer to exchange its Units for equity interests in another entity treated as a partnership for federal income tax purposes so long as, in either case, result of such successor entity assumes or agrees to assume the Partnership’s obligations pursuant to this Agreementbreach. For purposes of computing the amount of federal, state, and local income taxes required the indemnity payment owed to be paid by a Protected Partner (or Indirect Owner), (i) any deduction for state and local income taxes payable as a result thereof actually allowed in shall be treated as fully deductible for purposes of computing federal income taxes shall be taken (taking into accountaccount any limitation or phaseout of itemized deductions applicable to taxpayers in the highest federal income tax bracket), and (ii) a Protected Partner’s (or Indirect Owner’s) tax liability shall be computed using the highest federal, state and local marginal income tax rates that would be applicable to such Protected Partner’s (or Indirect Owner’s) 's taxable income (taking into account the character and type of such income or gain) for the year with respect to which the taxes must be paid, and, except as described in clause (i), without regard to any deductions, losses or credits that may be available to such Protected Partner (or Indirect Owner) that would reduce or offset its actual taxable income or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner (or Indirect Owner) to offset other income, gain or taxes of the Protected Partner (or Indirect Owner)Partner, either in the current year, in earlier years, or in later years). In the case of a Protected Partner that is a partnership, “S corporation” or a disregarded entity for federal income tax purposes, the preceding sentence shall be applied treating each Indirect Owner of such partnership, “S corporation” or disregarded entity as if it were directly a Protected Partner.

Monetary Damages. In If the event that the Operating Partnership or a Subsidiary breaches its obligations set forth in Article 2 II or Article III with respect to a Protected Partner, the Protected Partner’s sole remedy shall be to receive from the Operating Partnership, and the Operating Partnership shall pay to such Protected Partner as damages, an amount equal to: (i) in the case of a violation of Article II, the aggregate federal, state, and local income taxes (including any applicable federal unearned income Medicare contribution under Section 1411 of the Code) incurred by the Protected Partner or an Indirect Owner with respect to the Protected Gain that is allocable to such Protected Partner under the OP Agreement as a result of the disposition of the Protected Property; and (ii) in the case of a violation of Article III, the aggregate federal, state and local income taxes (including any applicable federal unearned income Medicare contribution under Section 1411 of the Code) incurred by the Protected Partner or an Indirect Owner as a result of the income or gain allocated to, or otherwise recognized by, such Protected Partner with respect to its Units Protected Gain by reason of such breach; plus, plus in either case, an additional amount so that, after the payment by such Protected Partner or Indirect Owner of all federal, state and local income taxes on amounts received pursuant to this Section 4.1 (including any tax liability incurred as a result of such Protected Partner’s receipt of such indemnity payment), such Protected Partner has received an amount equal to the aggregate its total federal, state, state and local income taxes payable by the Protected Partner or an Indirect Owner tax liability incurred as a result of the receipt such breach [plus costs of any payment required under this Section 3.1collection (including reasonable attorneys’ fees and costs)]10. For the avoidance of doubt, so long as the Operating Partnership provides the opportunities referenced in Sections 2.1 3.1, 3.2, 3.3, 3.5 and 2.3 3.6 and complies with the notification requirement of Section 2.23.4, the Operating Partnership shall have no liability pursuant to this Section 3.1 4.1 in the event it is determined that a Protected Partner has not been specially allocated for purposes of Section 752 of the Code an amount of partnership liabilities equal to such Protected Partner’s Minimum Liability Amount or is not treated as receiving a special allocation of partnership liabilities for purposes of Section 465 of the Code that increases such Protected Partner’s “at risk” amount by an amount equal to such Protected Partner’s Minimum Liability Amount. Furthermore, the Operating Partnership shall have no liability pursuant to this Section 3.1 4.1 if the Operating Partnership merges into another entity treated as a partnership for federal income tax purposes or the Protected Partner accepts an offer to exchange its OP Units for equity interests in another entity treated as a partnership for federal income tax purposes so long as, in either case, such successor entity assumes or agrees to assume the Operating Partnership’s obligations pursuant to this Agreement. For purposes of computing the amount of federal, state, and local income taxes required to be paid by a Protected Partner (or Indirect Owner), (i) any deduction for state and local income taxes payable as a result thereof actually allowed in computing federal income taxes shall be taken into account, and (ii) a Protected Partner’s (or Indirect Owner’s) tax liability shall be computed using the highest federal, state and local marginal income tax rates that would be applicable to such Protected Partner’s (or Indirect Owner’s) taxable income (taking into account the character and type of such income or gain) for the year with respect to which the taxes must be paid, without regard to any deductions, losses or credits that may be available to such Protected Partner (or Indirect Owner) that would reduce or offset its actual taxable income or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner (or Indirect Owner) to offset other income, gain or taxes of the Protected Partner (or Indirect Owner), either in the current year, in earlier years, or in later years)10 Business deal point. Not customary.

Monetary Damages. In the event that the Partnership breaches its obligations set forth in Article 2 or Article 3 with respect to a Protected Partner, the Protected Partner’s sole remedy shall be to receive from the Partnership, and the Partnership shall pay to such Protected Partner as damages, an amount equal to: (a) in the case of a violation of Article 2, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, and local income taxes incurred by the Protected Partner or an Indirect Owner with respect to the aggregate federalProtected Gain that is allocable to such Protected Partner under the Partnership Agreement as a result of the disposition of the Gain Limitation Property; and (b) in the case of a violation of Article 3, state ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ and local income taxes incurred by the Protected Partner or an Indirect Owner as a result of the income or gain allocated to, or otherwise recognized by, such Protected Partner with respect to its OP Units by reason of such breach. In addition, plus the Partnership shall pay to the Protected Partner or Indirect Owner an amount equal to the aggregate federal, state, and local income taxes payable by the Protected Partner or an Indirect Owner as a result of the receipt of any payment required under this Section 3.14.1. For the avoidance of doubt, so long as the Partnership provides the opportunities referenced in Sections 2.1 3.2 and 2.3 3.4 and complies with the notification requirement of Section 2.23.3, the Partnership shall have no liability pursuant to this Section 3.1 4.1 in the event it is determined that a Protected Partner has not been specially allocated for purposes of Section 752 of the Code an amount of partnership liabilities equal to such Protected Partner’s Minimum Liability Amount or is not treated as receiving a special allocation of partnership liabilities for purposes of Section 465 of the Code that increases such Protected Partner’s “at risk” amount by an amount equal to such Protected Partner’s Minimum Liability Amount. Furthermore, the Partnership shall have no liability pursuant to this Section 3.1 4.1 if the Partnership merges into another entity treated as a partnership for federal income tax purposes or the Protected Partner accepts an offer to exchange its OP Units for equity interests in another entity treated as a partnership for federal income tax purposes so long as, in either case, such successor entity assumes or agrees to assume the Partnership’s obligations pursuant to this Agreement. For purposes of computing the amount of federal, state, and local income taxes required to be paid by a Protected Partner (or Indirect Owner), (i) any deduction for state income taxes payable as a result thereof actually allowed in computing federal income taxes shall be taken into account, and (ii) a Protected Partner’s (or Indirect Owner’s) tax liability shall be computed using the highest federal, state and local marginal income tax rates (plus the tax rate on net investment income, if applicable) that would be applicable to such Protected Partner’s (or Indirect Owner’s) taxable income (taking into account the character and type of such income or gain) for the year with respect to which the taxes must be paid, without regard to any deductions, losses or credits that may be available to such Protected Partner (or Indirect Owner) that would reduce or offset its actual taxable income or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner (or Indirect Owner) to offset other income, gain or taxes of the Protected Partner (or Indirect Owner), either in the current year, in earlier years, or in later years).

Monetary Damages. In the event that the Partnership breaches its obligations set forth in Article 2 or Article 3, with respect to a Protected Partner, the Protected Partner’s sole remedy right shall be to receive from the Partnership, and the Partnership shall pay to such Protected Partner as damages, an amount equal to: (a) in the case of a violation of Article 2, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, and local income taxes incurred by the Protected Partner or an Indirect Owner with respect to the aggregate federalProtected Gain that is allocable to such Protected Partner under the Partnership Agreement as a result of the disposition of the Gain Limitation Property; and (b) in the case of a violation of Article 3, state ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ and local income taxes incurred by the Protected Partner or an Indirect Owner as a result of the income or gain allocated to, or otherwise recognized by, such Protected Partner with respect to its Units by reason of such breach, plus an amount equal to the aggregate federal, state, and local income taxes payable by the Protected Partner or an Indirect Owner as a result of the receipt of any payment required under this Section 3.1. For the avoidance of doubt, so long as the Partnership provides the opportunities referenced in Sections 2.1 3.1 and 2.3 3.3 and complies with the notification requirement of Section 2.2section 3.2, the Partnership shall have no liability pursuant to this Section 3.1 4.1 in the event it is determined that a Protected Partner has not been specially allocated for purposes of Section 752 of the Code an amount of partnership liabilities equal to such Protected Partner’s Minimum Liability Amount or is not treated as receiving a special allocation of partnership liabilities for purposes of Section 465 of the Code that increases such Protected Partner’s “at risk” amount by an amount equal to such Protected Partner’s Minimum Liability Amount. Furthermore, the Partnership shall have no liability pursuant to this Section 3.1 4.1 if the Partnership merges into another entity treated as a partnership for federal income tax purposes or the Protected Partner accepts an offer to exchange its Units for equity interests in another entity treated as a partnership for federal income tax purposes so long as, in either case, such successor entity assumes or agrees to assume the Partnership’s obligations pursuant to this Agreement. For purposes of computing the amount of federal, state, and local income taxes required to be paid by a Protected Partner (or Indirect Owner), (i) any deduction for state income taxes payable as a result thereof actually allowed in computing federal income taxes shall be taken into account, and (ii) a Protected Partner’s (or Indirect Owner’s) tax liability shall be computed using the highest federal, state and local marginal income tax rates that would be applicable to such Protected Partner’s (or Indirect Owner’s) taxable income (taking into account the character and type of such income or gain) for the year with respect to which the taxes must be paid, without regard to any deductions, losses or credits that may be available to such Protected Partner (or Indirect Owner) that would reduce or offset its actual taxable income or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner (or Indirect Owner) to offset other income, gain or taxes of the Protected Partner (or Indirect Owner), either in the current year, in earlier years, or in later years).

Monetary Damages. In the event that the Partnership breaches its obligations set forth in Article 2 or Article 3 with respect to a Protected Partner, the Protected Partner’s sole remedy shall be to receive from the Partnership, and the Partnership shall pay to such Protected Partner as damages, an amount equal to: (a) in the case of a violation of Article ▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, and local income taxes incurred by the Protected Partner or an Indirect Owner with respect to the aggregate federalProtected Gain that is allocable to such Protected Partner under the Partnership Agreement as a result of the disposition of the Gain Limitation Property; and (b) in the case of a violation of Article ▇, state ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ and local income taxes incurred by the Protected Partner or an Indirect Owner as a result of the income or gain allocated to, or otherwise recognized by, such Protected Partner with respect to its OP Units by reason of such breach. In addition, plus the Partnership shall pay to the Protected Partner or Indirect Owner an amount equal to the aggregate federal, state, and local income taxes payable by the Protected Partner or an Indirect Owner as a result of the receipt of any payment required under this Section 3.14.1. For the avoidance of doubt, so long as the Partnership provides the opportunities referenced in Sections 2.1 3.2 and 2.3 3.4 and complies with the notification requirement of Section 2.23.3, the Partnership shall have no liability pursuant to this Section 3.1 4.1 in the event it is determined that a Protected Partner has not been specially allocated for purposes of Section 752 of the Code an amount of partnership liabilities equal to such Protected Partner’s Minimum Liability Amount or is not treated as receiving a special allocation of partnership liabilities for purposes of Section 465 of the Code that increases such Protected Partner’s “at risk” amount by an amount equal to such Protected Partner’s Minimum Liability Amount. Furthermore, the Partnership shall have no liability pursuant to this Section 3.1 4.1 if the Partnership merges into another entity treated as a partnership for federal income tax purposes or the Protected Partner accepts an offer to exchange its OP Units for equity interests in another entity treated as a partnership for federal income tax purposes so long as, in either case, such successor entity assumes or agrees to assume the Partnership’s obligations pursuant to this Agreement. For purposes of computing the amount of federal, state, and local income taxes required to be paid by a Protected Partner (or Indirect Owner), (i) any deduction for state income taxes payable as a result thereof actually allowed in computing federal income taxes shall be taken into account, and (ii) a Protected Partner’s (or Indirect Owner’s) tax liability shall be computed using the highest federal, state and local marginal income tax rates (plus the tax rate on net investment income, if applicable) that would be applicable to such Protected Partner’s (or Indirect Owner’s) taxable income (taking into account the character and type of such income or gain) for the year with respect to which the taxes must be paid, without regard to any deductions, losses or credits that may be available to such Protected Partner (or Indirect Owner) that would reduce or offset its actual taxable income or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner (or Indirect Owner) to offset other income, gain or taxes of the Protected Partner (or Indirect Owner), either in the current year, in earlier years, or in later years).