Acquisition of Additional Properties. A. The Members anticipate expanding the business of the Company by acquiring one or more Additional Properties (through Additional Property Owner Entities) and causing the Additional Properties to be developed, redeveloped or refurbished. Either Member may identify potential Additional Properties for acquisition and development by the Company and shall notify the other Member of any such identification and provide the other Member with the opportunity to comment thereon. Cordish shall have the right and authority, subject to the provisions of Section 6.1.D applicable to Cordish pursuant to Section 6.2 hereof, to supervise and coordinate all aspects of the acquisition, financing, development and/or redevelopment of each Additional Property, shall keep Manager informed with respect to all such activity and shall have the duties and obligations set forth in Section 6.1.C and elsewhere in this Agreement with respect to the Additional Properties, to the extent applicable; PROVIDED, HOWEVER, that any such Additional Property may only be acquired by an Additional Property Owner Entity and only if (i) such Additional Property and the related Development Plan for such Additional Property has been approved by Cordish, (ii) all available environmental reports and similar reports for such Additional Property have been submitted to the Manager and the Manager has approved the environmental and similar condition of such Additional Property, (iii) the Manager determines that the acquisition of such Additional Properties would not impose additional liabilities or obligations on the Company (other than to the extent that such liabilities or obligations would remain liabilities and obligations solely of the applicable Additional Property Owner Entity) and (iv) the Manager determines that the acquisition of such Additional Properties would not adversely affect the continued qualification of Inland as a REIT and would not cause the imposition of additional taxes under the REIT Rules on Inland. B. Unless otherwise agreed by the Members in writing, each Additional Property shall be acquired by an Additional Property Owner Entity which shall be a single-purpose limited liability company similar in form and structure to the Owner Entity. Each Additional Property Owner Entity shall be owned solely by the Company. C. Unless otherwise agreed by the Members in writing, Cordish may utilize cash then held in the Operations Reserve to fund the costs relating to any Additional Property in addition to incurring (or causing an Additional Property Owner Entity to incur) financing for the acquisition, development and/or redevelopment of the Additional Property (subject to the limitations set forth in this Agreement). Unless otherwise agreed by the Members in writing, and notwithstanding any authority granted to Cordish under this Agreement (specifically including, but not limited to, Section 6.2 hereof), the Company shall not utilize any Company cash other than the cash in the Operations Reserve in connection with the acquisition of, financing of, operation of, and other costs relating to, the Additional Properties and the Additional Property Owner Entities. X. Xxxxxxx shall cause the Additional Property Owner Entity to arrange and maintain property, casualty and liability insurance with respect to the Additional Properties in amounts and on terms that are consistent with the customary practices of Cordish and its Affiliates with respect to similar properties and taking into account all relevant factors including the nature and location of the Additional Properties; PROVIDED, HOWEVER, Cordish shall cause (i) any improvements on the Additional Properties to be insured against damage by fire and the other hazards covered by a standard extended coverage and all-risk insurance policy or a builders risk insurance policy, as applicable, for the full insurable value thereof (without reduction for depreciation or co-insurance) and with a reasonable deductible, (ii) each Additional Property with completed improvements to be covered by use and occupancy insurance covering, as applicable, rental income or business interruption, with coverage in an amount not less than twelve (12)-months anticipated gross rental income or gross business earnings, as applicable, attributable to such Additional Property; and (iii) each Additional Property Owner Entity to maintain commercial general liability and umbrella liability insurance with respect to each Additional Property providing for combined limits of liability of not less than $25 million for both injury to or death of a person and for property damage per occurrence; The Company, Inland, and the Owner Entity shall be named as additional insureds. Upon the request of Inland, Cordish shall deliver to Inland copies of such insurance policies and other documents and information necessary in order to verify its compliance with the provisions of this Section 6.5.D. E. Subject to the terms of Section 6.2.B(i) hereof, Cordish shall have the right and authority to arrange the original financing for each Additional Property on behalf of the Additional Property Owner Entity in accordance with Section 6.2.B(i) without the need to obtain the consent or approval of the Manager, and to utilize the funds (including interest thereon) in the Operations Reserve in connection with the acquisition, development and/or redevelopment of Additional Properties. F. If any Additional Property Owner Entity has a need for funds in connection with the acquisition, development and/or redevelopment of an Additional Property, or if the Company requires additional funds in connection with the acquisition of an equity interest in an Additional Property Owner Entity, or if an Additional Property Owner Entity does not have sufficient cash flow to fund the Cordish Preferred Return that year to the Company, and in either case such amount exceeds the amount available from the Operations Reserve and the proceeds of any financing arranged by Cordish pursuant to Section 6.5.E hereof, then Cordish shall have the right to provide written notice of the need for such funds ("REQUIRED DEVELOPMENT FUNDS") to the Members (a "DEVELOPMENT FUNDS NOTICE"). Upon receipt of the Development Funds Notice, the Members may upon mutual consent (in their sole and absolute discretion) elect to (a) make an Additional Capital Contribution in proportion to their respective Percentage Interests, or (b) make loans ("DEVELOPMENT LOANS") to the Additional Property Owner Entity in the amount of the Required Development Funds described in the Development Funds Notice in proportion to the Members' respective Percentage Interests on the same terms and form as a Cash Shortfall Loan made with respect to the Additional Property as set forth in Section 3.4.C hereof. The Members hereby covenant and agree to structure any Development Loans made pursuant to the terms hereof so that such loans satisfy the "Straight Debt Safe Harbor" under Code Section 856(c)(7) and the Treasury Regulations promulgated thereunder. If the Members do not agree to make such Additional Capital Contributions or Development Loans, Cordish shall promptly make (or cause an Affiliate or other Person selected by it to make) a Development Loan to the Additional Property Owner Entity in the amount of the Required Development Funds in accordance with Section 6.2.B(i) and on the same terms applicable to a Cash Shortfall Loan made with respect to the Additional Property as set forth in Section 3.4.C hereof. If Cordish does not promptly make or cause an Affiliate or other Person selected by it to make a Development Loan pursuant to this Section 6.5.F, Inland shall have the right, but not the obligation, in its sole and absolute discretion, to fund the amount of such Development Loan, which shall constitute a Default Loan by Inland to Cordish in the same manner as set forth in Section 3.4.B hereof. If Inland does not elect (in its sole discretion and with no duty or obligation to do so) to make such a Development Loan or Default Loan and if such Additional Property Owner Entity will become insolvent or will be in default under any of its financing obligations then Inland shall have the unilateral right at any time to cause the Company to distribute the entire ownership interest in such Additional Property Owner Entity to Cordish (notwithstanding any other provisions of this Agreement to the contrary) on the terms provided in Section 9.6.B and the Adjusted Capital Balance of Cordish shall be reduced by an amount equal to the portion of the Operations Reserve theretofore contributed to such Additional Property Owner Entity. G. Notwithstanding anything to the contrary otherwise contained herein and in addition to the obligations and conditions set forth herein, in the event Cordish desires that an Additional Property Owner Entity acquire a direct interest in real property (as opposed to an indirect interest, such as a partnership interest or limited liability company interest in another entity that owns real property), before such Additional Property Owner Entity acquires title to such Additional Property, Cordish shall provide Inland with a copy of a Phase I environmental report that does not recommend that any further studies, tests or remediation be conducted with respect to such property. H. Prior to the acquisition of an Additional Property and in addition to the obligations and conditions set forth herein, Cordish shall deliver to the Manager a proposed Development Plan for such Additional Property. The Manager shall have the right to review and comment on each Development Plan so submitted by Cordish. Within ten (10) business days after the delivery of the proposed Development Plan for an Additional Property, the Manager shall provide Cordish with its comments thereon (including whether or not the Manager believes at such time that the Additional Property will comply with the requirements in Section 6.6 below, provided, however, that the Manager's initial belief as set forth in this sentence shall not be deemed to be a waiver of the Manager's or Inland's rights hereunder), if any, which Cordish shall take into consideration. X. Xxxxxxx shall cause the development, redevelopment, construction and improvement of each Additional Property to be completed substantially in accordance with the Development Plan therefor.
Appears in 1 contract
Samples: Contribution Agreement (Inland Western Retail Real Estate Trust Inc)
Acquisition of Additional Properties. A. The Members anticipate expanding the business of the Company by acquiring one or more Additional Properties (through Additional Property Owner Entities) and causing the Additional Properties to be developed, redeveloped or refurbished. Either Member may identify potential Additional Properties for acquisition and development by the Company and shall notify the other Member of any such identification and provide the other Member with the opportunity to comment thereon. Cordish shall have the right and authority, subject to the provisions of Section 6.1.D applicable to Cordish pursuant to Section 6.2 hereof, to supervise and coordinate all aspects of the acquisition, financing, development and/or redevelopment of each Additional Property, shall keep Manager informed with respect to all such activity and shall have the duties and obligations set forth in Section 6.1.C and elsewhere in this Agreement with respect to the Additional Properties, to the extent applicable; PROVIDED, HOWEVER, that any such Additional Property may only be acquired by an Additional Property Owner Entity and only if (i) such Additional Property and the related Development Plan for such Additional Property has been approved by Cordish, (ii) all available environmental reports and similar reports for such Additional Property have been submitted to the Manager and the Manager has approved the environmental and similar condition of such Additional Property, (iii) the Manager determines that the acquisition of such Additional Properties would not impose additional liabilities or obligations on the Company (other than to the extent that such liabilities or obligations would remain liabilities and obligations solely of the applicable Additional Property Owner Entity) and (iv) the Manager determines that the acquisition of such Additional Properties would not adversely affect the continued qualification of Inland as a REIT and would not cause the imposition of additional taxes under the REIT Rules on Inland.
B. Unless otherwise agreed by the Members in writing, each Additional Property shall be acquired by an Additional Property Owner Entity which shall be a single-purpose limited liability company similar in form and structure to the Owner Entity. Each Additional Property Owner Entity shall be owned solely by the Company.
C. Unless otherwise agreed by the Members in writing, Cordish may utilize cash then held in the Operations Reserve to fund the costs relating to any Additional Property in addition to incurring (or causing an Additional Property Owner Entity to incur) financing for the acquisition, development and/or redevelopment of the Additional Property (subject to the limitations set forth in this Agreement). Unless otherwise agreed by the Members in writing, and notwithstanding any authority granted to Cordish under this Agreement (specifically including, but not limited to, Section 6.2 hereof), the Company shall not utilize any Company cash other than the cash in the Operations Reserve in connection with the acquisition of, financing of, operation of, and other costs relating to, the Additional Properties and the Additional Property Owner Entities.
X. Xxxxxxx shall cause the Additional Property Owner Entity to arrange and maintain property, casualty and liability insurance with respect to the Additional Properties in amounts and on terms that are consistent with the customary practices of Cordish and its Affiliates with respect to similar properties and taking into account all relevant factors including the nature and location of the Additional Properties; PROVIDED, HOWEVER, Cordish shall cause (i) any improvements on the Additional Properties to be insured against damage by fire and the other hazards covered by a standard extended coverage and all-risk insurance policy or a builders risk insurance policy, as applicable, for the full insurable value thereof (without reduction for depreciation or co-insurance) and with a reasonable deductible, (ii) each Additional Property with completed improvements to be covered by use and occupancy insurance covering, as applicable, rental income or business interruption, with coverage in an amount not less than twelve (12)-months anticipated gross rental income or gross business earnings, as applicable, attributable to such Additional Property; and (iii) each Additional Property Owner Entity to maintain commercial general liability and umbrella liability insurance with respect to each Additional Property providing for combined limits of liability of not less than $25 million for both injury to or death of a person and for property damage per occurrence; The Company, Inland, and the Owner Entity shall be named as additional insureds. Upon the request of Inland, Cordish shall deliver to Inland copies of such insurance policies and other documents and information necessary in order to verify its compliance with the provisions of this Section 6.5.D.
E. Subject to the terms of Section 6.2.B(i) hereof, Cordish shall have the right and authority to arrange the original financing for each Additional Property on behalf of the Additional Property Owner Entity in accordance with Section 6.2.B(i) without the need to obtain the consent or approval of the Manager, and to utilize the funds (including interest thereon) in the Operations Reserve in connection with the acquisition, development and/or redevelopment of Additional Properties.
F. If any Additional Property Owner Entity has a need for funds in connection with the acquisition, development and/or redevelopment of an Additional Property, or if the Company requires additional funds in connection with the acquisition of an equity interest in an Additional Property Owner Entity, or if an Additional Property Owner Entity does not have sufficient cash flow to fund the Cordish Preferred Return that year to the Company, and in either case such amount exceeds the amount available from the Operations Reserve and the proceeds of any financing arranged by Cordish pursuant to Section 6.5.E hereof, then Cordish shall have the right to provide written notice of the need for such funds ("REQUIRED DEVELOPMENT FUNDS") to the Members (a "DEVELOPMENT FUNDS NOTICE"). Upon receipt of the Development Funds Notice, the Members may upon mutual consent (in their sole and absolute discretion) elect to (a) make an Additional Capital Contribution in proportion to their respective Percentage Interests, or (b) make loans ("DEVELOPMENT LOANS") to the Additional Property Owner Entity in the amount of the Required Development Funds described in the Development Funds Notice in proportion to the Members' respective Percentage Interests on the same terms and form as a Cash Shortfall Loan made with respect to the Additional Property as set forth in Section 3.4.C hereof. The Members hereby covenant and agree to structure any Development Loans made pursuant to the terms hereof so that such loans satisfy the "Straight Debt Safe Harbor" under Code Section 856(c)(7) and the Treasury Regulations promulgated thereunder. If the Members do not agree to make such Additional Capital Contributions or Development Loans, Cordish shall promptly make (or cause an Affiliate or other Person selected by it to make) a Development Loan to the Additional Property Owner Entity in the amount of the Required Development Funds in accordance with Section 6.2.B(i) and on the same terms applicable to a Cash Shortfall Loan made with respect to the Additional Property as set forth in Section 3.4.C hereof. If Cordish does not promptly make or cause an Affiliate or other Person selected by it to make a Development Loan pursuant to this Section 6.5.F, Inland shall have the right, but not the obligation, in its sole and absolute discretion, to fund the amount of such Development Loan, which shall constitute a Default Loan by Inland to Cordish in the same manner as set forth in Section 3.4.B hereof. If Inland does not elect (in its sole discretion and with no duty or obligation to do so) to make such a Development Loan or Default Loan and if such Additional Property Owner Entity will become insolvent or will be in default under any of its financing obligations then Inland shall have the unilateral right at any time to cause the Company to distribute the entire ownership interest in such Additional Property Owner Entity to Cordish (notwithstanding any other provisions of this Agreement to the contrary) on the terms provided in Section 9.6.B and the Adjusted Capital Balance of Cordish shall be reduced by an amount equal to the portion of the Operations Reserve theretofore contributed to such Additional Property Owner Entity.
G. Notwithstanding anything to the contrary otherwise contained herein and in addition to the obligations and conditions set forth herein, in the event Cordish desires that an Additional Property Owner Entity acquire a direct interest in real property (as opposed to an indirect interest, such as a partnership interest or limited liability company interest in another entity that owns real property), before such Additional Property Owner Entity acquires title to such Additional Property, Cordish shall provide Inland with a copy of a Phase I environmental report that does not recommend that any further studies, tests or remediation be conducted with respect to such property.
H. Prior to the acquisition of an Additional Property and in addition to the obligations and conditions set forth herein, Cordish shall deliver to the Manager a proposed Development Plan for such Additional Property. The Manager shall have the right to review and comment on each Development Plan so submitted by Cordish. Within ten (10) business days after the delivery of the proposed Development Plan for an Additional Property, the Manager shall provide Cordish with its comments thereon (including whether or not the Manager believes at such time that the Additional Property will comply with the requirements in Section 6.6 below, provided, however, that the Manager's initial belief as set forth in this sentence shall not be deemed to be a waiver of the Manager's or Inland's rights hereunder), if any, which Cordish shall take into consideration.
X. Xxxxxxx shall cause the development, redevelopment, construction and improvement of each Additional Property to be completed substantially in accordance with the Development Plan therefor.-38-
Appears in 1 contract
Samples: Contribution Agreement (Inland Western Retail Real Estate Trust Inc)
Acquisition of Additional Properties. A. The Members anticipate expanding the business of the Company by acquiring one or more Additional Properties (through Additional Property Owner Entities) and causing the Additional Properties to be developed, redeveloped or refurbished. Either The Members intend and agree that Cordish shall organize and manage Cordish Managed Entities and CRC shall organize and manage CRC Managed Entities. Any Associate Member may identify potential Additional Properties for acquisition and development by the Company and shall notify the other Member Members of any such identification and provide the other Member Members with the opportunity to comment thereon. Cordish Each Associate Member shall have the right and authority, subject to the provisions of Section 6.1.D 6.x.X applicable to Cordish the Associate Members pursuant to Section 6.2 6.2.A hereof, to supervise and coordinate all aspects of the acquisition, financing, development and/or redevelopment of each Additional Property, shall keep Manager informed with respect to all such activity and shall have the duties and obligations set forth in Section 6.1.C and elsewhere in this Agreement with respect to the Additional Properties, to the extent applicable; PROVIDED, HOWEVER, that any such Additional Property may only be acquired by an Additional Property Owner Entity and only if (i) such Additional Property and the related Development Plan for such Additional Property has been approved by Cordishthe Associate Member who will manage such Additional Property, (ii) all available environmental reports and similar reports for such Additional Property have been submitted to the Manager and the Manager has approved the environmental and similar condition of such Additional Property, (iii) the Manager determines that the acquisition of such Additional Properties would not impose additional liabilities or obligations on the Company (other than to the extent that such liabilities or obligations would remain liabilities and obligations solely of the applicable Additional Property Owner Entity) and (iv) the Manager determines that the acquisition of such Additional Properties would not adversely affect the continued qualification of Inland as a REIT and would not cause the imposition of additional taxes under the REIT Rules on Inland.
B. Unless otherwise agreed by the Members in writing, each Additional Property shall be acquired by an Additional Property Owner Entity which shall be a single-purpose limited liability company similar in form and structure to the each Owner Entity. Each Additional Property Owner Entity shall be owned solely by the Company.
C. Unless otherwise agreed by the Members in writing, Cordish the Associate Members may utilize cash then held in the Operations Reserve and the Capital Reserve to fund the costs relating to any Additional Property in addition to incurring (or causing an Additional Property Owner Entity to incur) financing for the acquisition, development and/or redevelopment of the Additional Property (subject to the limitations set forth in this Agreement). Unless otherwise agreed by the Members in writing, and notwithstanding any authority granted to Cordish the Associate Members under this Agreement (specifically including, but not limited to, Section 6.2 hereof), - 37 - the Company shall not utilize any Company cash other than the cash in the Operations Reserve or the Capital Reserve in connection with the acquisition of, financing of, operation of, and other costs relating to, the Additional Properties and the Additional Property Owner Entities.
X. Xxxxxxx D. Each of the Associate Members shall cause the Company and each Additional Property Owner Entity to arrange and maintain property, casualty and liability insurance with respect to the Additional Properties it manages in amounts and on terms that are consistent with the customary practices of Cordish the Associate Members and its their Affiliates with respect to similar properties and taking into account all relevant factors including the nature and location of the Additional Properties; PROVIDED, HOWEVER, Cordish with respect to each Additional Property managed by an Associate Member, such Associate Member shall cause (i) any improvements on the Additional Properties to be insured against damage by fire and the other hazards covered by a standard extended coverage and all-risk insurance policy or a builders risk insurance policy, as applicable, for the full insurable value thereof (without reduction for depreciation or co-co- insurance) and with a reasonable deductible, (ii) each Additional Property with completed improvements to be covered by use and occupancy insurance covering, as applicable, rental income or business interruption, with coverage in an amount not less than twelve (12)-months anticipated gross rental income or gross business earnings, as applicable, attributable to such Additional Property; and (iii) each Additional Property Owner Entity to maintain commercial general liability and umbrella liability insurance with respect to each Additional Property providing for combined limits of liability of not less than $25 million for both injury to or death of a person and for property damage per occurrence; The Company, Inland, Inland and the each Owner Entity shall be named as additional insureds. Upon the request of Inland, Cordish an Associate Member shall deliver to Inland copies of such insurance policies and other documents and information necessary in order to verify its compliance with the provisions of this Section 6.5.D.6.5.D for the Additional Property it manages.
E. Subject to the terms of Section 6.2.B(i) hereof, Cordish the Associate Members shall have the right and authority to arrange the original financing for each Additional Property on behalf of the Additional Property Owner Entity in accordance with Section 6.2.B(i) without the need to obtain the consent or approval of the ManagerManager or other Members, and to utilize the funds (including interest thereon) in the Operations Reserve and Capital Reserve in connection with the acquisition, development and/or redevelopment of Additional Properties.
F. If any Additional Property Owner Entity has a need for funds in connection with the acquisition, development and/or redevelopment of an Additional Property, or if the Company requires additional funds in connection with the acquisition of an equity interest in an Additional Property Owner Entity, or if an the Additional Property Owner Entity does Entities do not have sufficient cash flow to fund the Cordish Preferred Return and the CRC Preferred Return that year to the Company, and in either case such amount exceeds the amount available in the sole discretion of Cordish as to a Cordish Managed Entity or CRC as to a CRC Managed Entity from the Operations Reserve, the Capital Reserve and the proceeds of any financing arranged by Cordish the respective Associate Member pursuant to Section 6.5.E hereof, then Cordish the Associate Member managing the particular Additional Property Owner Entity shall have the right to provide written notice of the need for such funds ("REQUIRED DEVELOPMENT FUNDS") to the Members (a "DEVELOPMENT FUNDS NOTICE"). Upon receipt of the Development Funds Notice, the Members may upon mutual consent (in their sole and absolute discretion) elect to (a) make an Additional Capital Contribution in proportion to their respective Percentage Interests, or (b) make loans ("DEVELOPMENT LOANS") to the Additional Property Owner Entity in the amount of the Required - 38 - Development Funds described in the Development Funds Notice in proportion to the Members' respective Percentage Interests on the same terms and form as a Cash Shortfall Loan made with respect to the Additional Property as set forth in Section 3.4.C hereof. The Members hereby covenant and agree to structure any Development Loans made pursuant to the terms hereof so that such loans satisfy the "Straight Debt Safe Harbor" under Code Section 856(c)(7) and the Treasury Regulations promulgated thereunder. If the Members do not agree to make such Additional Capital Contributions or Development Loans, Cordish the Associate Member who manages the applicable Additional Property shall promptly make (or cause an Affiliate or other Person selected by it to make) a Development Loan to the Additional Property Owner Entity in the amount of the Required Development Funds in accordance with Section 6.2.B(i) and on the same terms applicable to a Cash Shortfall Loan made with respect to the Additional Property as set forth in Section 3.4.C hereof. If Cordish such Associate Member does not promptly make or cause an Affiliate or other Person selected by it to make a Development Loan pursuant to this Section 6.5.F6.5.E, Inland shall have the right, but not the obligation, in its sole and absolute discretion, to fund the amount of such Development Loan, which shall constitute a Default Loan by Inland to Cordish such Associate Member in the same manner as set forth in Section 3.4.B hereof. If Inland does not elect (in its sole discretion and with no duty or obligation to do so) to make such a Development Loan or Default Loan and if such Additional Property Owner Entity will become insolvent or will be in default under any of its financing obligations obligations, then Inland shall have the unilateral right at any time to cause the Company to distribute the entire ownership interest in such Additional Property Owner Entity to Cordish the Associate Member who managed such Additional Property (notwithstanding any other provisions of this Agreement to the contrary) on the terms provided in Section 9.6.B or Section 9.9.B., as the case may be, and the Adjusted Capital Balance of Cordish the Associate Member who managed such Additional Property shall be reduced by an amount equal to the portion of the Operations Reserve or Capital Reserve, as the case may be, theretofore contributed to such Additional Property Owner Entity.
G. Notwithstanding anything to the contrary otherwise contained herein herein, and in addition to the obligations and conditions set forth herein, in the event Cordish an Associate Member desires that an Additional Property Owner Entity managed by it acquire a direct interest in real property (as opposed to an indirect interest, such as a partnership interest or limited liability company interest in another entity that owns real property), before such Additional Property Owner Entity acquires title to such Additional Property, Cordish such Associate Member shall provide Inland with a copy of a Phase I environmental report that does not recommend that any further studies, tests or remediation be conducted with respect to such property.
H. Prior to the acquisition of an Additional Property Property, and in addition to the obligations and conditions set forth herein, Cordish the Associate Member who will manage such Additional Property or Additional Property Owner Entity shall deliver to the Manager a proposed Development Plan for such Additional Property. The Manager shall have the right to review and comment on each Development Plan so submitted by Cordishsuch Associate Member. Within ten (10) business days after the delivery of the proposed Development Plan for an Additional Property, the Manager shall provide Cordish such Associate Member with its comments thereon (including whether or not the Manager believes at such time that the Additional Property will comply with the requirements in Section 6.6 6.6, below, provided, however, that the Manager's initial belief as set forth in this sentence shall not be deemed to be a waiver of the Manager's or Inland's rights hereunder), if any, which Cordish such Associate Member shall take into consideration.
X. Xxxxxxx I. The Associate Member who will manage such Additional Property shall cause the development, redevelopment, construction and improvement of each Additional Property to be completed substantially in accordance with the Development Plan therefor.
Appears in 1 contract
Samples: Contribution Agreement (Inland Western Retail Real Estate Trust Inc)
Acquisition of Additional Properties. A. The Members anticipate expanding the business of the Company by acquiring one or more Additional Properties (through Additional Property Owner Entities) and causing the Additional Properties to be developed, redeveloped or refurbished. Either Member may identify potential Additional Properties for acquisition and development by the Company and shall notify the other Member of any such identification and provide the other Member with the opportunity to comment thereon. Cordish shall have the right and authority, subject to the provisions of Section 6.1.D applicable to Cordish pursuant to Section 6.2 hereof, to supervise and coordinate all aspects of the acquisition, financing, development and/or redevelopment of each Additional Property, shall keep Manager informed with respect to all such activity and shall have the duties and obligations set forth in Section 6.1.C and elsewhere in this Agreement with respect to the Additional Properties, to the extent applicable; PROVIDED, HOWEVER, that any such Additional Property may only be acquired by an Additional Property Owner Entity and only if (i) such Additional Property and the related Development Plan for such Additional Property has been approved by Cordish, (ii) all available environmental reports and similar reports for such Additional Property have been submitted to the Manager and the Manager has approved the environmental and similar condition of such Additional Property, (iii) the Manager determines that the acquisition of such Additional Properties would not impose additional liabilities or obligations on the Company (other than to the extent that such liabilities or obligations would remain liabilities and obligations solely of the applicable Additional Property Owner Entity) and (iv) the Manager determines that the acquisition of such Additional Properties would not adversely affect the continued qualification of Inland as a REIT and would not cause the imposition of additional taxes under the REIT Rules on Inland.
B. Unless otherwise agreed by the Members in writing, each Additional Property shall be acquired by an Additional Property Owner Entity which shall be a single-purpose limited liability company similar in form and structure to the Owner Entity. Each Additional Property Owner Entity shall be owned solely by the Company.
C. Unless otherwise agreed by the Members in writing, Cordish may utilize cash then held in the Operations Reserve to fund the costs relating to any Additional Property in addition to incurring (or causing an Additional Property Owner Entity to incur) financing for the acquisition, development and/or redevelopment of the Additional Property (subject to the limitations set forth in this Agreement). Unless otherwise agreed by the Members in writing, and notwithstanding any authority granted to Cordish under this Agreement (specifically including, but not limited to, to Section 6.2 hereof), the Company shall not utilize any Company cash other than the cash in the Operations Reserve in connection with the acquisition of, financing of, operation of, and other costs relating to, the Additional Properties and the Additional Property Owner Entities.
X. Xxxxxxx shall cause the Additional Property Owner Entity to arrange and maintain property, casualty and liability insurance with respect to the Additional Properties in amounts - 38 - and on terms that are consistent with the customary practices of Cordish and its Affiliates with respect to similar properties and taking into account all relevant factors including the nature and location of the Additional Properties; PROVIDED, HOWEVER, Cordish shall cause (i) any improvements on the Additional Properties to be insured against damage by fire and the other hazards covered by a standard extended coverage and all-risk insurance policy or a builders risk insurance policy, as applicable, for the full insurable value thereof (without reduction for depreciation or co-insurance) and with a reasonable deductible, (ii) each Additional Property with completed improvements to be covered by use and occupancy insurance covering, as applicable, rental income or business interruption, with coverage in an amount not less than twelve (12)-months anticipated gross rental income or gross business earnings, as applicable, attributable to such Additional Property; and (iii) each Additional Property Owner Entity to maintain commercial general liability and umbrella liability insurance with respect to each Additional Property providing for combined limits of liability of not less than $25 million for both injury to or death of a person and for property damage per occurrence; The Company, Inland, and the Owner Entity shall be named as additional insureds. Upon the request of Inland, Cordish shall deliver to Inland copies of such insurance policies and other documents and information necessary in order to verify its compliance with the provisions of this Section 6.5.D.
E. Subject to the terms of Section 6.2.B(i) hereof, Cordish shall have the right and authority to arrange the original financing for each Additional Property on behalf of the Additional Property Owner Entity in accordance with Section 6.2.B(i) without the need to obtain the consent or approval of the Manager, and to utilize the funds (including interest thereon) in the Operations Reserve in connection with the acquisition, development and/or redevelopment of Additional Properties.
F. If any Additional Property Owner Entity has a need for funds in connection with the acquisition, development and/or redevelopment of an Additional Property, or if the Company requires additional funds in connection with the acquisition of an equity interest in an Additional Property Owner Entity, or if an Additional Property Owner Entity does not have sufficient cash flow to fund the Cordish Preferred Return that year to the Company, and in either case such amount exceeds the amount available from the Operations Reserve and the proceeds of any financing arranged by Cordish pursuant to Section 6.5.E hereof, then Cordish shall have the right to provide written notice of the need for such funds ("REQUIRED DEVELOPMENT FUNDS") to the Members (a "DEVELOPMENT FUNDS NOTICE"). Upon receipt of the Development Funds Notice, the Members may upon mutual consent (in their sole and absolute discretion) elect to (a) make an Additional Capital Contribution in proportion to their respective Percentage Interests, or (b) make loans ("DEVELOPMENT LOANS") to the Additional Property Owner Entity in the amount of the Required Development Funds described in the Development Funds Notice in proportion to the Members' respective Percentage Interests on the same terms and form as a Cash Shortfall Loan made with respect to the Additional Property as set forth in Section 3.4.C hereof. The Members hereby covenant and agree to structure any Development Loans made pursuant to the terms hereof so that such loans satisfy the "Straight Debt Safe Harbor" under Code Section 856(c)(7S56(c)(7) and the Treasury Regulations promulgated thereunder. If the Members do not agree to make such Additional Capital Contributions or Development Loans, Cordish shall promptly make (or cause an Affiliate or other Person selected by it to make) a Development Loan to the Additional Property Owner Entity in the amount of the Required Development Funds in accordance with Section 6.2.B(i) and on the same terms applicable to a Cash Shortfall Loan made with respect to the Additional Property as set forth in Section 3.4.C hereof. If Cordish does not promptly make or cause an Affiliate or other Person selected by it to make a Development Loan pursuant to this Section 6.5.F, Inland shall have the right, but not the obligation, in its sole and absolute discretion, to fund the amount of such Development Loan, which shall constitute a Default Loan by Inland to Cordish in the same manner as set forth in Section 3.4.B hereof. If Inland does not elect (in its sole discretion and with no duty or obligation to do so) to make such a Development Loan or Default Loan and if such Additional Property Owner Entity will become insolvent or will be in default under any of its financing obligations then Inland shall have the unilateral right at any time to cause the Company to distribute the entire ownership interest in such Additional Property Owner Entity to Cordish (notwithstanding any other provisions of this Agreement to the contrary) on the terms provided in Section 9.6.B and the Adjusted Capital Balance of Cordish shall be reduced by an amount equal to the portion of the Operations Reserve theretofore contributed to such Additional Property Owner Entity.
G. Notwithstanding anything to the contrary otherwise contained herein and in addition to the obligations and conditions set forth herein, in the event Cordish desires that an Additional Property Owner Entity acquire a direct interest in real property (as opposed to an indirect interest, such as a partnership interest or limited liability company interest in another entity that owns real property), before such Additional Property Owner Entity acquires title to such Additional Property, Cordish shall provide Inland with a copy of a Phase I environmental report that does not recommend that any further studies, tests or remediation be conducted with respect to such property.
H. Prior to the acquisition of an Additional Property and in addition to the obligations and conditions set forth herein, Cordish shall deliver to the Manager a proposed Development Plan for such Additional Property. The Manager shall have the right to review and comment on each Development Plan so submitted by Cordish. Within ten (10) business days after the delivery of the proposed Development Plan for an Additional Property, the Manager shall provide Cordish with its comments thereon (including whether or not the Manager believes at such time that the Additional Property will comply with the requirements in Section 6.6 below, provided, however, that the Manager's initial belief as set forth in this sentence shall not be deemed to be a waiver of the Manager's or Inland's rights hereunder), if any, which Cordish shall take into consideration.
X. Xxxxxxx shall cause the development, redevelopment, construction and improvement of each Additional Property to be completed substantially in accordance with the Development Plan therefor.
Appears in 1 contract
Samples: Contribution Agreement (Inland Western Retail Real Estate Trust Inc)
