CODE, BUT IF SUCH
PROTECTED PROPERTY IS IN FACT REPLACED IN A MANNER THAT WOULD ALLOW THE GAIN TO
BE DEFERRED UNDER CODE SECTION 1033, THE COMPANY SHALL ELECT UNDER CODE
SECTION 1033 TO DEFER SUCH GAIN.
(III)
SECTION 2(A) (I) HEREOF SHALL NOT APPLY WITH RESPECT TO THE SALE,
TRANSFER, EXCHANGE OR OTHER DISPOSITION
OF INVENTORY OR OTHER ASSETS IN THE
ORDINARY COURSE OF OPERATING THE BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES,
PROVIDED THAT THE TOTAL AMOUNT OF "RECOGNIZED BUILT-IN GAIN" (WITHIN THE MEANING
OF SECTION 1374(D)(3) OF THE CODE) WITH RESPECT TO SUCH DISPOSITIONS (OTHER THAN
DISPOSITIONS OF INVENTORY) EXCLUDED PURSUANT TO THIS SECTION 2.1(A)(III) SHALL
NOT EXCEED ONE MILLION DOLLARS ($1,000,000) IN ANY TAXABLE YEAR OF THE COMPANY.
(B)
AT ALL TIMES THROUGHOUT THE PROTECTED PERIOD, THE COMPANY AGREES,
FOR THE BENEFIT OF EACH PROTECTED MEMBER AND THE INDIRECT OWNERS OF SUCH
PROTECTED MEMBER, TO MAINTAIN, ON A CONTINUOUS BASIS, AN AMOUNT OF LLC DEBT
EQUAL TO THE MINIMUM DEBT AMOUNT.
3.
INDEMNITY FOR BREACH OF OBLIGATIONS SET FORTH IN SECTION 2
(A)
(I)
IN THE EVENT THAT THE COMPANY BREACHES ITS OBLIGATION SET FORTH
IN SECTION 2 HEREOF TO ANY PROTECTED MEMBER OR AN INDIRECT OWNER THEREOF (A
TRIGGER EVENT"),
3
INDEMNITORS SHALL BE JOINTLY AND SEVERALLY OBLIGATED TO PAY TO SUCH PROTECTED
MEMBER AND INDIRECT OWNER AS DAMAGES AN AMOUNT (THE "BASE AMOUNT") EQUAL TO THE
AGGREGATE FEDERAL, STATE AND LOCAL INCOME TAXES INCURRED BY SUCH PROTECTED
MEMBER OR INDIRECT OWNER THEREOF AS A RESULT OF THE INCOME AND GAIN RECOGNIZED
BY OR ALLOCATED UNDER SECTION 704(C) OF THE CODE (TO THE EXTENT BASED UPON THE
DIFFERENCE BETWEEN FAIR MARKET VALUE AND ADJUSTED BASIS OF THE NEWSDAY ASSETS ON
THE CLOSING DATE, AND WITHOUT REGARD TO INCOME OR GAIN IN EXCESS OF SUCH
BUILT-IN GAIN) TO SUCH PROTECTED MEMBER OR INDIRECT OWNER THEREOF BY REASON OF
SUCH TRIGGER EVENT PLUS AN ADDITIONAL AMOUNT (THE "GROSS-UP AMOUNT") SO THAT,
AFTER THE PAYMENT BY SUCH PROTECTED MEMBER OR INDIRECT OWNER THEREOF OF ALL
TAXES ON AMOUNTS RECEIVED PURSUANT TO THIS SECTION 3(A), SUCH PROTECTED MEMBER
OR INDIRECT OWNER THEREOF RETAINS AN AMOUNT EQUAL TO THE BASE AMOUNT.
IN THE
EVENT THAT INDEMNITORS BECOME AWARE OF A BREACH OF SECTION 2 HEREOF WITH RESPECT
TO THE
PROTECTED MEMBER OR AN INDIRECT OWNER THEREOF, INDEMNITORS SHALL
PROMPTLY NOTIFY SUCH PROTECTED MEMBER IN WRITING OF SUCH TRIGGER EVENT AND OF
THE SALES PRICE OR OTHER AMOUNT REALIZED FOR INCOME TAX PURPOSES IN CONNECTION
THEREWITH, OR THE AMOUNT BY WHICH THE MINIMUM DEBT AMOUNT EXCEEDED THE
OUTSTANDING PRINCIPAL AMOUNT OF LLC DEBT AND SHALL PROVIDE THE PROTECTED MEMBER
WITH COPIES OF ALL OPERATIVE DOCUMENTS RELATING TO THE TRIGGER EVENT AND SUCH
OTHER RELEVANT MATERIALS AS MAY BE REASONABLY REQUESTED BY THE PROTECTED MEMBER.
(II)
UPON RECEIPT OF SUCH NOTICE, THE PROTECTED MEMBER SHALL PROVIDE
INDEMNITORS WITH ANY INFORMATION REASONABLY REQUESTED BY INDEMNITORS OF THE
PROTECTED MEMBER (INCLUDING INFORMATION REGARDING INDIRECT OWNERS THEREOF) TO
ENABLE INDEMNITORS TO VERIFY THE COMPUTATION