Like-Kind Exchanges. Notwithstanding anything in this Agreement to the contrary, an Unencumbered Pool Property Owner shall be permitted to engage in the sale of an Unencumbered Pool Property in a tax-deferred exchange pursuant to Section 1031 of the Code (a “Like Kind Exchange”), provided that the following terms and conditions shall apply to each such Like Kind Exchange: (a) Agent shall have approved (i) the structure and documentation for such Like Kind Exchange and such documentation shall not be modified, amended or terminated without Agent’s reasonable consent (provided, that Agent shall not have any consent or approval rights with respect to (X) the documentation designating the replacement property for such Like Kind Exchange or governing the acquisition of such replacement property from the owner thereof (such as the purchase and sale agreement, deed, xxxx of sale or other conveyance document) or (Y) any ministerial or administrative modifications to the documentation for such Like Kind Exchange (such as changing a notification address or designating a deposit account)), (ii) the qualified intermediary accommodating such Like Kind Exchange, which qualified intermediary shall, at all times during such Like Kind Exchange, satisfy the requirements therefor under the Code (such Person, a “Qualified Intermediary”), all such Agent approvals not to be unreasonably withheld, conditioned or delayed; (b) all or a portion of the proceeds from such sale (as determined by Borrower) shall be deposited with, and held by, a Qualified Intermediary during the pendency of such Like Kind Exchange (such proceeds, the “Exchange Funds”). Promptly after such sale, Borrower shall provide Agent with a written statement from the Qualified Intermediary confirming the receipt of such Exchange Funds by the Qualified Intermediary, the exact amount thereof and that such funds have been deposited into an exchange account held by or on behalf of such Qualified Intermediary. Borrower shall only be permitted to use the Exchange Funds to either (i) effectuate such Like Kind Exchange pursuant to the Code and the terms and conditions hereof, or (ii) prepay the Loans to the extent required by, and in accordance with, §3.2(a) (or, if no such prepayment is required, for any other purpose that does not cause a Default or Event of Default); (c) such Like Kind Exchange shall be completed by Borrower and such Unencumbered Pool Property Owner within the time period which is the shorter of (i) one hundred eighty (180) days following the sale of the Unencumbered Pool Property which is the subject thereof, and (ii) the time period provided under the Code to validly effectuate such Like Kind Exchange; (d) such Unencumbered Pool Property Owner and each other Subsidiary of Borrower which owned a direct or indirect interest in the Unencumbered Pool Property that is the subject of the Like Kind Exchange (and during the pendency of the Like Kind Exchange owns a direct or indirect interest in the Exchange Funds being held by such Qualified Intermediary) shall (i) remain a Subsidiary Guarantor hereunder at all times during the pendency of the Like Kind Exchange if such Person is a Subsidiary Guarantor prior to the sale of such Unencumbered Pool Property, and (ii) become a Subsidiary Guarantor hereunder promptly after such sale (but in any event, no later than ten (10) Business Days after such sale (as such time period may be extended by Agent in its reasonable discretion)) if such Person was not a Subsidiary Guarantor prior to such sale, and such Person shall thereafter remain a Subsidiary Guarantor hereunder at all times during the pendency of the Like Kind Exchange, notwithstanding the existence of any Residual Developer Interests in such Person; (e) so long as (X) no Event of Default shall have occurred and be continuing and Borrower and such Unencumbered Pool Property Owner shall be in compliance with the terms of this §8.15, and (Y) Borrower shall have delivered to Agent a Compliance Certificate in connection with such Like Kind Exchange (calculated after giving effect to the adjustments set forth in clauses (i) and (ii) below), then: (i) the sum of the total amount of such Exchange Funds being held by such Qualified Intermediary, less the amount due in taxes being deferred by such Like Kind Exchange, as determined by Borrower in good faith and reasonably acceptable to the Agent (such amount, the “Net Restricted Proceeds”) shall, during the pendency of the Like Kind Exchange, be deemed to be included in the aggregate Unencumbered Pool Value solely for purposes of determining compliance with §9.1; provided, however, that no more than twenty-five percent (25%) of the aggregate Unencumbered Pool Value shall at any time be deemed to include Net Restricted Proceeds pursuant to this §8.15(e)(i), and any excess shall be excluded from the calculation of aggregate Unencumbered Pool Value for purposes of determining compliance with §9.1; and (ii) during the pendency of the Like Kind Exchange, the Outstanding principal balance of all Loans and Letter of Credit Liabilities shall be deemed reduced by the Net Restricted Proceeds Limit solely for purposes of determining compliance with §9.2; (f) Upon the consummation of the Like Kind Exchange, (i) if such replacement property constitutes Eligible Real Estate and the conditions set forth in this Agreement for such Real Estate to be included as an Unencumbered Pool Property are satisfied (including, without limitation, the delivery of each of the Unencumbered Pool Qualification Documents with respect to such Real Estate, each of which shall be in form and substance reasonably satisfactory to the Agent), or the LKE Required Lenders otherwise consent to the inclusion of such Real Estate as an Unencumbered Pool Property, then such replacement property shall be included as an Unencumbered Pool Property, and (ii) if such replacement property does not constitute Eligible Real Estate and/or the conditions set forth in this Agreement for such Real Estate to be included as an Unencumbered Pool Property are not satisfied, then, (X) notwithstanding anything to the contrary contained in this Agreement, so long as such Real Estate is improved by an income-producing Multifamily Property, the development of which has been substantially completed as evidenced by the issuance of a Certificate of Occupancy and such Real Estate complies with all of the representations set forth in §6.19 and §6.22 of this Agreement concerning such Real Estate, then such Real Estate may be continued to be owned by Borrower or a Wholly-Owned Subsidiary of Borrower, but such Real Estate shall not be included as an Unencumbered Pool Property unless and until such Real Estate constitutes Eligible Real Estate and the conditions set forth in this Agreement for such Real Estate to be included as an Unencumbered Pool Property are satisfied (including, without limitation, the delivery of each of the Unencumbered Pool Qualification Documents with respect to such Real Estate, each of which shall be in form and substance reasonably satisfactory to the Agent), or the LKE Required Lenders otherwise consent to the inclusion of such Real Estate as an Unencumbered Pool Property, or (Y) Borrower shall promptly transfer, or cause to be transferred, such Real Estate (or the Equity Interests of the Person’s which directly or indirectly own such Real Estate), in each case, in accordance with the terms and conditions of this Agreement, such that the replacement property shall no longer be owned, directly or indirectly, by Borrower, any Subsidiary Guarantor or any of their respective Subsidiaries; provided, in each case under this §8.15(f), (I) the Borrower shall at all times remain in compliance with the terms and conditions of this Agreement, including, without limitation, §§3.2(a)), §9.1 and §9.2, (II) the Borrower shall deliver to Agent, within three (3) Business Days’ of the consummation of such Like Kind Exchange, a Compliance Certificate (calculated after giving effect to the consummation of such Like Kind Exchange), and (III) Agent shall release from the Guaranty each Subsidiary Guarantor which owns, directly or indirectly, any Real Estate that is transferred as contemplated in item (Y) above, provided, that any such Subsidiary Guarantor (A) does not own any direct or indirect interest in any Real Estate (or own any Equity Interests of a Person which directly or indirectly owns such Real Estate) other than the Real Estate that is transferred as contemplated in item (Y) above, and (B) is either dissolved or all of the Equity Interests in such Subsidiary Guarantor are transferred or conveyed to a Person other than Borrower, any Subsidiary Guarantor or any of their respective Subsidiaries, such that the Subsidiary Guarantor being released pursuant to this clause (III) shall no longer be a Material Subsidiary at the time of such release. Notwithstanding anything to the contrary contained in this §8.15, not more than one (1) Unencumbered Pool Property Owner (with respect to not more than one (1) Unencumbered Pool Property) shall be permitted to engage in a Like Kind Exchange and obtain the benefit of this §8.15 at any one time. Nothing contained in this §8.15 shall be deemed to modify or limit the covenants, representations, warranties, requirements, terms and conditions contained in this Agreement applicable to Real Estate, Eligible Real Estate and/or Unencumbered Pool Properties, including without limitation, the requirements set forth in the definition of Eligible Real Estate and §7.19(a). Notwithstanding anything to the contrary contained in this Agreement, if any action or inaction by Borrower under this §8.15 results in a violation of the covenants set forth in §9.1 or §9.2, any waiver or modification of such covenants made in order to cure such violation shall require the written consent of the LKE Required Lenders.
Appears in 1 contract
Samples: Credit Agreement (Monogram Residential Trust, Inc.)
Like-Kind Exchanges. Notwithstanding anything The Company and Contributor acknowledge and agree that Contributor may elect no later than five (5) days prior to any Closing Date, to execute and assign to an exchange facilitator, qualified intermediary, exchange accommodation titleholder or similar entity its interest in, a separate agreement of sale with respect to any of the Tranche 2 Properties or the Tranche 3 Properties specified by Contributor (the "Excluded Properties") to facilitate a like-kind exchange of the Excluded Properties in this Agreement a transaction or transactions which are intended to the contrary, an Unencumbered Pool Property Owner shall be permitted to engage in the sale of an Unencumbered Pool Property in qualify for treatment as a tax-deferred like-kind exchange pursuant to the provisions of Section 1031 of the Internal Revenue Code (a “Like Kind "1031 Exchange”"). Each Excluded Property shall no longer be subject to the provisions of this Agreement, and the Tranche 2 or Tranche 3 Consideration and the Tranche 2 or Tranche 3 Cash Portion of the Sales Price shall be reduced by the Contributed Equity Value of each Excluded Property. Subject to Section 19, Contributor's election to proceed with a 1031 Exchange of the Excluded Properties may include transfers of equity interests in entities, the merger and/or consolidation of entities and/or the creation of other entities such as single member limited liability companies. If Contributor so elects, the Company shall cooperate (at no expense or liability to it) in effectuating the 1031 Exchange of the Excluded Properties and in implementing any such assignment and/or execution of any documentation, provided that the following terms and conditions shall apply to each such Like Kind Exchange:
(a) Agent shall have approved (i) Contributor shall indemnify the structure Company for all direct costs and documentation for such Like Kind expenses incurred by the Company in connection with an intended or effectuated 1031 Exchange and such documentation shall not be modified, amended or terminated without Agent’s reasonable consent (provided, that Agent shall not have any consent or approval rights with respect to (X) the documentation designating the replacement property for such Like Kind Exchange or governing the acquisition of such replacement property from the owner thereof (such as the purchase and sale agreement, deed, xxxx of sale or other conveyance document) or (Y) any ministerial or administrative modifications to the documentation for such Like Kind Exchange (such as changing a notification address or designating a deposit account))an Excluded Property, (ii) the qualified intermediary accommodating such Like Kind ExchangeCompany shall not be obligated to take title to any other property, which qualified intermediary shall, at all times during such Like Kind Exchange, satisfy nor shall this Section 18.01 affect in any manner Contributor's obligations or the requirements therefor Company's rights and benefits under the Code this Agreement (such Person, a “Qualified Intermediary”), all such Agent approvals not to be unreasonably withheld, conditioned or delayed;
(b) all or a portion of the proceeds from such sale (as determined by Borrower) shall be deposited with, and held by, a Qualified Intermediary during the pendency of such Like Kind Exchange (such proceeds, the “Exchange Funds”). Promptly after such sale, Borrower shall provide Agent with a written statement from the Qualified Intermediary confirming the receipt of such Exchange Funds by the Qualified Intermediary, the exact amount thereof and that such funds have been deposited into an exchange account held by or on behalf of such Qualified Intermediary. Borrower shall only be permitted to use the Exchange Funds to either (i) effectuate such Like Kind Exchange pursuant to the Code and the terms and conditions hereof, or (ii) prepay the Loans except to the extent required by, and in accordance with, §3.2(a) (or, if no such prepayment is required, for any other purpose that does not cause a Default or Event of Default);
(c) such Like Kind Exchange shall be completed by Borrower and such Unencumbered Pool each Excluded Property Owner within the time period which is the shorter of (i) one hundred eighty (180) days following the sale of the Unencumbered Pool Property which is the subject thereof, and (ii) the time period provided under the Code to validly effectuate such Like Kind Exchange;
(d) such Unencumbered Pool Property Owner and each other Subsidiary of Borrower which owned a direct or indirect interest in the Unencumbered Pool Property that is the subject of the Like Kind Exchange (and during the pendency of the Like Kind Exchange owns a direct or indirect interest in the Exchange Funds being held by such Qualified Intermediary) shall (i) remain a Subsidiary Guarantor hereunder at all times during the pendency of the Like Kind Exchange if such Person is a Subsidiary Guarantor prior to the sale of such Unencumbered Pool Property, and (ii) become a Subsidiary Guarantor hereunder promptly after such sale (but in any event, no later than ten (10) Business Days after such sale (as such time period may be extended by Agent in its reasonable discretion)) if such Person was not a Subsidiary Guarantor prior to such sale, and such Person shall thereafter remain a Subsidiary Guarantor hereunder at all times during the pendency of the Like Kind Exchange, notwithstanding the existence of any Residual Developer Interests in such Person;
(e) so long as (X) no Event of Default shall have occurred and be continuing and Borrower and such Unencumbered Pool Property Owner shall be in compliance with the terms of this §8.15, and (Y) Borrower shall have delivered to Agent a Compliance Certificate in connection with such Like Kind Exchange (calculated after giving effect to the adjustments set forth in clauses (i) and (ii) below), then:
(i) the sum of the total amount of such Exchange Funds being held by such Qualified Intermediary, less the amount due in taxes being deferred by such Like Kind Exchange, as determined by Borrower in good faith and reasonably acceptable to the Agent (such amount, the “Net Restricted Proceeds”) shall, during the pendency of the Like Kind Exchange, be deemed to be included in the aggregate Unencumbered Pool Value solely for purposes of determining compliance with §9.1; provided, however, that no more than twenty-five percent (25%) of the aggregate Unencumbered Pool Value shall at any time be deemed to include Net Restricted Proceeds pursuant to this §8.15(e)(i), and any excess shall be excluded from the calculation of aggregate Unencumbered Pool Value for purposes of determining compliance with §9.1; and
(ii) during the pendency of the Like Kind Exchange, the Outstanding principal balance of all Loans and Letter of Credit Liabilities shall be deemed reduced by the Net Restricted Proceeds Limit solely for purposes of determining compliance with §9.2;
(f) Upon the consummation of the Like Kind Exchange, (i) if such replacement property constitutes Eligible Real Estate and the conditions set forth in this Agreement for such Real Estate to be included as an Unencumbered Pool Property are satisfied (including, without limitation, the delivery of each of the Unencumbered Pool Qualification Documents with respect to such Real Estate, each of which shall be in form and substance reasonably satisfactory to the Agent), or the LKE Required Lenders otherwise consent to the inclusion of such Real Estate as an Unencumbered Pool Property, then such replacement property shall be included as an Unencumbered Pool Property, and (ii) if such replacement property does not constitute Eligible Real Estate and/or the conditions set forth in this Agreement for such Real Estate to be included as an Unencumbered Pool Property are not satisfied, then, (X) notwithstanding anything to the contrary contained in this Agreement, so long as such Real Estate is improved by an income-producing Multifamily Property, the development of which has been substantially completed as evidenced by the issuance of a Certificate of Occupancy and such Real Estate complies with all of the representations set forth in §6.19 and §6.22 of this Agreement concerning such Real Estate, then such Real Estate may be continued to be owned by Borrower or a Wholly-Owned Subsidiary of Borrower, but such Real Estate shall not be included as an Unencumbered Pool Property unless and until such Real Estate constitutes Eligible Real Estate and the conditions set forth in this Agreement for such Real Estate to be included as an Unencumbered Pool Property are satisfied (including, without limitation, the delivery of each of the Unencumbered Pool Qualification Documents with respect to such Real Estate, each of which shall be in form and substance reasonably satisfactory to the Agent), or the LKE Required Lenders otherwise consent to the inclusion of such Real Estate as an Unencumbered Pool Property, or (Y) Borrower shall promptly transfer, or cause to be transferred, such Real Estate (or the Equity Interests of the Person’s which directly or indirectly own such Real Estate), in each case, in accordance with the terms and conditions of this Agreement, such that the replacement property shall no longer be owned, directly or indirectly, by Borrower, any Subsidiary Guarantor or any of their respective Subsidiaries; provided, in each case under this §8.15(f), (I) subject to the Borrower shall at all times remain in compliance with the terms and conditions provisions of this Agreement, including, without limitation, §§3.2(a)), §9.1 and §9.2, (II) the Borrower shall deliver to Agent, within three (3) Business Days’ of the consummation of such Like Kind Exchange, a Compliance Certificate (calculated after giving effect to the consummation of such Like Kind Exchange), and (IIIiii) Agent shall release from the Guaranty each Subsidiary Guarantor which owns, directly or indirectly, any Real Estate that it is transferred as contemplated in item (Y) above, provided, that any such Subsidiary Guarantor (A) does not own any direct or indirect interest in any Real Estate (or own any Equity Interests of a Person which directly or indirectly owns such Real Estate) other than the Real Estate that is transferred as contemplated in item (Y) above, and (B) is either dissolved or all of the Equity Interests in such Subsidiary Guarantor are transferred or conveyed to a Person other than Borrower, any Subsidiary Guarantor or any of their respective Subsidiaries, such expressly understood that the Subsidiary Guarantor being released pursuant to this clause (III) shall no longer be a Material Subsidiary at consummation by Contributor or the time of such release. Notwithstanding anything to the contrary contained in this §8.15, not more than one (1) Unencumbered Pool Property Owner (with respect to not more than one (1) Unencumbered Pool Property) shall be permitted to engage in a Like Kind Exchange and obtain the benefit of this §8.15 at any one time. Nothing contained in this §8.15 shall be deemed to modify or limit the covenants, representations, warranties, requirements, terms and conditions contained in this Agreement applicable to Real Estate, Eligible Real Estate and/or Unencumbered Pool Properties, including without limitation, the requirements set forth in the definition of Eligible Real Estate and §7.19(a). Notwithstanding anything to the contrary contained in this Agreement, if any action or inaction ability by Borrower under this §8.15 results in a violation of the covenants set forth in §9.1 or §9.2, any waiver or modification of such covenants made in order to cure such violation shall require the written consent of the LKE Required Lenders.the
Appears in 1 contract
Samples: Contribution Agreement (Reckson Operating Partnership Lp)
Like-Kind Exchanges. Notwithstanding anything The Company and Seller acknowledge and agree that Seller may elect no later than five (5) days prior to the Closing Date, to execute and assign to an exchange facilitator, qualified intermediary, exchange accommodation titleholder or similar entity its interest in this Agreement with respect to any of the contrary, an Unencumbered Pool Property Owner shall be permitted Properties specified by Seller (the "Excluded Properties") to engage facilitate a like-kind exchange of the Excluded Properties in the sale of an Unencumbered Pool Property in a transaction or transactions which are intended to qualify for treatment as a tax-deferred like-kind exchange pursuant to the provisions of Section 1031 of the Internal Revenue Code (a “Like Kind "1031 Exchange”"). Subject to Section 19, Seller's election to proceed with a 1031 Exchange of such Properties may include transfers of equity interests in entities, the merger and/or consolidation of entities and/or the creation of other entities such as single member limited liability companies. If Seller so elects, the Company shall cooperate (at no expense or liability to it) in effectuating the 1031 Exchange of the such Properties and in implementing any such assignment and/or execution of any documentation, provided that the following terms and conditions shall apply to each such Like Kind Exchange:
(a) Agent shall have approved (i) Seller shall indemnify the structure Company for all direct costs and documentation for such Like Kind expenses incurred by the Company in connection with an intended or effectuated 1031 Exchange and such documentation shall not be modified, amended or terminated without Agent’s reasonable consent (provided, that Agent shall not have any consent or approval rights with respect to (X) the documentation designating the replacement property for such Like Kind Exchange or governing the acquisition of such replacement property from the owner thereof (such as the purchase and sale agreement, deed, xxxx of sale or other conveyance document) or (Y) any ministerial or administrative modifications to the documentation for such Like Kind Exchange (such as changing a notification address or designating a deposit account))Properties, (ii) the qualified intermediary accommodating such Like Kind ExchangeCompany shall not be obligated to take title to any other property, which qualified intermediary shall, at all times during such Like Kind Exchange, satisfy nor shall this Section 18.01 affect in any manner Seller's obligations or the requirements therefor Company's rights and benefits under the Code this Agreement (such Person, a “Qualified Intermediary”), all such Agent approvals not to be unreasonably withheld, conditioned or delayed;
(b) all or a portion of the proceeds from such sale (as determined by Borrower) shall be deposited with, and held by, a Qualified Intermediary during the pendency of such Like Kind Exchange (such proceeds, the “Exchange Funds”). Promptly after such sale, Borrower shall provide Agent with a written statement from the Qualified Intermediary confirming the receipt of such Exchange Funds by the Qualified Intermediary, the exact amount thereof and that such funds have been deposited into an exchange account held by or on behalf of such Qualified Intermediary. Borrower shall only be permitted to use the Exchange Funds to either (i) effectuate such Like Kind Exchange pursuant to the Code and the terms and conditions hereof, or (ii) prepay the Loans except to the extent required by, and in accordance with, §3.2(a) (or, if no that each such prepayment is required, for any other purpose that does not cause a Default or Event of Default);
(c) such Like Kind Exchange shall be completed by Borrower and such Unencumbered Pool Property Owner within the time period which is the shorter of (i) one hundred eighty (180) days following the sale of the Unencumbered Pool Property which is the subject thereof, and (ii) the time period provided under the Code to validly effectuate such Like Kind Exchange;
(d) such Unencumbered Pool Property Owner and each other Subsidiary of Borrower which owned a direct or indirect interest in the Unencumbered Pool Property that is the subject of the Like Kind Exchange (and during the pendency of the Like Kind Exchange owns a direct or indirect interest in the Exchange Funds being held by such Qualified Intermediary) shall (i) remain a Subsidiary Guarantor hereunder at all times during the pendency of the Like Kind Exchange if such Person is a Subsidiary Guarantor prior to the sale of such Unencumbered Pool Property, and (ii) become a Subsidiary Guarantor hereunder promptly after such sale (but in any event, no later than ten (10) Business Days after such sale (as such time period may be extended by Agent in its reasonable discretion)) if such Person was not a Subsidiary Guarantor prior to such sale, and such Person shall thereafter remain a Subsidiary Guarantor hereunder at all times during the pendency of the Like Kind Exchange, notwithstanding the existence of any Residual Developer Interests in such Person;
(e) so long as (X) no Event of Default shall have occurred and be continuing and Borrower and such Unencumbered Pool Property Owner shall be in compliance with the terms of this §8.15, and (Y) Borrower shall have delivered to Agent a Compliance Certificate in connection with such Like Kind Exchange (calculated after giving effect to the adjustments set forth in clauses (i) and (ii) below), then:
(i) the sum of the total amount of such Exchange Funds being held by such Qualified Intermediary, less the amount due in taxes being deferred by such Like Kind Exchange, as determined by Borrower in good faith and reasonably acceptable to the Agent (such amount, the “Net Restricted Proceeds”) shall, during the pendency of the Like Kind Exchange, be deemed to be included in the aggregate Unencumbered Pool Value solely for purposes of determining compliance with §9.1; provided, however, that no more than twenty-five percent (25%) of the aggregate Unencumbered Pool Value shall at any time be deemed to include Net Restricted Proceeds pursuant to this §8.15(e)(i), and any excess shall be excluded from the calculation of aggregate Unencumbered Pool Value for purposes of determining compliance with §9.1; and
(ii) during the pendency of the Like Kind Exchange, the Outstanding principal balance of all Loans and Letter of Credit Liabilities shall be deemed reduced by the Net Restricted Proceeds Limit solely for purposes of determining compliance with §9.2;
(f) Upon the consummation of the Like Kind Exchange, (i) if such replacement property constitutes Eligible Real Estate and the conditions set forth in this Agreement for such Real Estate to be included as an Unencumbered Pool Property are satisfied (including, without limitation, the delivery of each of the Unencumbered Pool Qualification Documents with respect to such Real Estate, each of which shall be in form and substance reasonably satisfactory to the Agent), or the LKE Required Lenders otherwise consent to the inclusion of such Real Estate as an Unencumbered Pool Property, then such replacement property shall be included as an Unencumbered Pool Property, and (ii) if such replacement property does not constitute Eligible Real Estate and/or the conditions set forth in this Agreement for such Real Estate to be included as an Unencumbered Pool Property are not satisfied, then, (X) notwithstanding anything to the contrary contained in this Agreement, so long as such Real Estate is improved by an income-producing Multifamily Property, the development of which has been substantially completed as evidenced by the issuance of a Certificate of Occupancy and such Real Estate complies with all of the representations set forth in §6.19 and §6.22 of this Agreement concerning such Real Estate, then such Real Estate may be continued to be owned by Borrower or a Wholly-Owned Subsidiary of Borrower, but such Real Estate shall not be included as an Unencumbered Pool Property unless and until such Real Estate constitutes Eligible Real Estate and the conditions set forth in this Agreement for such Real Estate to be included as an Unencumbered Pool Property are satisfied (including, without limitation, the delivery of each of the Unencumbered Pool Qualification Documents with respect to such Real Estate, each of which shall be in form and substance reasonably satisfactory to the Agent), or the LKE Required Lenders otherwise consent to the inclusion of such Real Estate as an Unencumbered Pool Property, or (Y) Borrower shall promptly transfer, or cause to be transferred, such Real Estate (or the Equity Interests of the Person’s which directly or indirectly own such Real Estate), in each case, in accordance with the terms and conditions of this Agreement, such that the replacement property shall no longer be owned, directly or indirectly, by Borrower, any Subsidiary Guarantor or any of their respective Subsidiaries; provided, in each case under this §8.15(f), (I) subject to the Borrower shall at all times remain in compliance with the terms and conditions provisions of this Agreement, including, without limitation, §§3.2(a)), §9.1 and §9.2, (II) the Borrower shall deliver to Agent, within three (3) Business Days’ of the consummation of such Like Kind Exchange, a Compliance Certificate (calculated after giving effect to the consummation of such Like Kind Exchange), and (IIIiii) Agent it is expressly understood that the consummation by Seller or the ability by the electing party to consummate its intended 1031 Exchange is not a condition precedent to Seller's obligation to consummate the Closing. The Cap shall release from be proportionately reduced upon the Guaranty each Subsidiary Guarantor which owns, directly or indirectly, any Real Estate that is transferred as occurrence of the transactions contemplated in item (Y) above, provided, that any such Subsidiary Guarantor (A) does not own any direct or indirect interest in any Real Estate (or own any Equity Interests of a Person which directly or indirectly owns such Real Estate) other than the Real Estate that is transferred as contemplated in item (Y) above, and (B) is either dissolved or all of the Equity Interests in such Subsidiary Guarantor are transferred or conveyed to a Person other than Borrower, any Subsidiary Guarantor or any of their respective Subsidiaries, such that the Subsidiary Guarantor being released pursuant to this clause (III) shall no longer be a Material Subsidiary at the time of such release. Notwithstanding anything to the contrary contained in this §8.15, not more than one (1) Unencumbered Pool Property Owner (with respect to not more than one (1) Unencumbered Pool Property) shall be permitted to engage in a Like Kind Exchange and obtain the benefit of this §8.15 at any one time. Nothing contained in this §8.15 shall be deemed to modify or limit the covenants, representations, warranties, requirements, terms and conditions contained in this Agreement applicable to Real Estate, Eligible Real Estate and/or Unencumbered Pool Properties, including without limitation, the requirements set forth in the definition of Eligible Real Estate and §7.19(a). Notwithstanding anything to the contrary contained in this Agreement, if any action or inaction by Borrower under this §8.15 results in a violation of the covenants set forth in §9.1 or §9.2, any waiver or modification of such covenants made in order to cure such violation shall require the written consent of the LKE Required LendersSection 18.01.
Appears in 1 contract
Like-Kind Exchanges. Notwithstanding anything Diablo shall have the right, but not the obligation, to effect the transfer and conveyance of the Diablo Assets, in this Agreement to the contrarywhole or in part, an Unencumbered Pool Property Owner shall be permitted to engage in the sale as part of an Unencumbered Pool Property in a tax-deferred exchange pursuant to one or more exchanges under Section 1031 of the Code Code, including the delay in Closing of escrow for those Assets subject to the exchange. If Diablo so elects, it shall provide notice to ATS of its election (a “Like the "Like-Kind Exchange”Notice"), provided that setting forth in reasonable detail which portion or portions of the following terms and conditions shall apply Diablo Assets are to each be so treated. In such Like Kind Exchange:
(a) Agent shall have approved event, Diablo (i) the structure and documentation for such Like Kind Exchange and such documentation shall not be modifiedmay at any time at or prior to Closing assign its rights, amended in whole or terminated without Agent’s reasonable consent (providedin part, that Agent shall not have any consent or approval rights under this Agreement with respect to such Diablo Assets to a "qualified intermediary" as defined in Treas. Reg. (XS) 1.1031(k)-1(g)(4), subject to all of the documentation designating the replacement property for such Like Kind Exchange or governing the acquisition rights and obligations hereunder of ATS, and (ii) shall promptly provide written notice of such replacement property from the owner thereof assignment to ATS. No such assignment shall, however, relieve Diablo of its obligations under this Agreement. If Diablo shall have given a Like-Kind Notice, ATS shall (i) promptly provide Diablo with written acknowledgment of such as the purchase and sale agreement, deed, xxxx of sale or other conveyance document) or (Y) any ministerial or administrative modifications to the documentation for such Like Kind Exchange (such as changing a notification address or designating a deposit account))notice, (ii) at the Closing, convey the Purchase Price for the Diablo Assets (or such portion of them as shall have been designated in writing by Diablo) to the "qualified intermediary accommodating such Like Kind Exchange, intermediary" rather than to Diablo (which qualified intermediary conveyance shall, at all times during to such Like Kind Exchangeextent, satisfy discharge the requirements therefor under the Code obligation of ATS to deliver such Purchase Price (such Person, a “Qualified Intermediary”or portion thereof), all such Agent approvals not to be unreasonably withheld, conditioned or delayed;
and (biii) at the request of Diablo extend the closing of escrow for all or a portion of those assets subject to the proceeds from such sale (as determined by Borrower) Like-Kind Notice for a period not to exceed one year. Should the closing for any Like-Kind Notice properties be so extended, Diablo and ATS shall be deposited withenter into an agreement reasonably acceptable to each party which agreement shall, to the maximum extent feasible, provide ATS with the rights, benefits, and held byobligations for any Like-Kind Notice property for which the closing is so extended. Without limiting the generality of the foregoing, a Qualified Intermediary during Diablo and ATS shall promptly after receipt by ATS of the pendency Like-Kind Notice, negotiate in good faith in order to determine the portion of such Like Kind Exchange (such proceeds, the “Exchange Funds”). Promptly after such sale, Borrower shall provide Agent with a written statement from the Qualified Intermediary confirming the receipt of such Exchange Funds by the Qualified Intermediary, the exact amount thereof and that such funds have been deposited into an exchange account held by or on behalf of such Qualified Intermediary. Borrower shall only be permitted to use the Exchange Funds to either (i) effectuate such Like Kind Exchange pursuant Purchase Price attributable to the Code and the terms and conditions hereof, or (ii) prepay the Loans Diablo Assets which are to the extent required by, and in accordance with, §3.2(a) (or, if no such prepayment is required, for any other purpose that does not cause a Default or Event of Default);
(c) such Like Kind Exchange shall be completed by Borrower and such Unencumbered Pool Property Owner within the time period which is the shorter of (i) one hundred eighty (180) days following the sale of the Unencumbered Pool Property which is the subject thereof, and (ii) the time period provided under the Code to validly effectuate such Like Kind Exchange;
(d) such Unencumbered Pool Property Owner and each other Subsidiary of Borrower which owned a direct or indirect interest in the Unencumbered Pool Property that is the subject of the Like Kind Exchange (and during the pendency of the Like Kind Exchange owns a direct or indirect interest like-kind exchange and, in the Exchange Funds being held by such Qualified Intermediary) shall (i) remain a Subsidiary Guarantor hereunder at all times during the pendency of the Like Kind Exchange if such Person is a Subsidiary Guarantor prior event they are unable to the sale of such Unencumbered Pool Property, and (ii) become a Subsidiary Guarantor hereunder promptly after such sale (but in any event, no later than ten (10) Business Days after such sale (as such time period may be extended by Agent in its reasonable discretion)) if such Person was not a Subsidiary Guarantor prior to such sale, and such Person shall thereafter remain a Subsidiary Guarantor hereunder at all times during the pendency of the Like Kind Exchange, notwithstanding the existence of any Residual Developer Interests in such Person;
(e) so long as (X) no Event of Default shall have occurred and be continuing and Borrower and such Unencumbered Pool Property Owner shall be in compliance with the terms of this §8.15, and (Y) Borrower shall have delivered to Agent a Compliance Certificate in connection with such Like Kind Exchange (calculated after giving effect to the adjustments set forth in clauses (i) and (ii) below), then:
(i) the sum of the total amount of such Exchange Funds being held by such Qualified Intermediary, less the amount due in taxes being deferred by such Like Kind Exchange, as determined by Borrower in good faith and reasonably acceptable to the Agent (agree on such amount, the “Net Restricted Proceeds”) shall, during the pendency of the Like Kind Exchange, be deemed to be included in the aggregate Unencumbered Pool Value solely for purposes of determining compliance with §9.1; provided, however, that no more than twenty-five percent (25%) of the aggregate Unencumbered Pool Value shall at any time be deemed to include Net Restricted Proceeds pursuant to this §8.15(e)(i), and any excess it shall be excluded from the calculation of aggregate Unencumbered Pool Value for purposes of determining compliance with §9.1; and
(ii) during the pendency of the Like Kind Exchange, the Outstanding principal balance of all Loans and Letter of Credit Liabilities shall be deemed reduced determined by the Net Restricted Proceeds Limit solely for purposes of determining compliance with §9.2;
(f) Upon the consummation of the Like Kind Exchange, (i) if such replacement property constitutes Eligible Real Estate and the conditions set forth in this Agreement for such Real Estate to be included as an Unencumbered Pool Property are satisfied (including, without limitation, the delivery of each of the Unencumbered Pool Qualification Documents with respect to such Real Estate, each of which shall be in form and substance reasonably satisfactory to the Agent), or the LKE Required Lenders otherwise consent to the inclusion of such Real Estate as an Unencumbered Pool Property, then such replacement property shall be included as an Unencumbered Pool Property, and (ii) if such replacement property does not constitute Eligible Real Estate and/or the conditions set forth in this Agreement for such Real Estate to be included as an Unencumbered Pool Property are not satisfied, then, (X) notwithstanding anything to the contrary contained in this Agreement, so long as such Real Estate is improved by an income-producing Multifamily Property, the development of which has been substantially completed as evidenced by the issuance of a Certificate of Occupancy and such Real Estate complies with all of the representations set forth in §6.19 and §6.22 of this Agreement concerning such Real Estate, then such Real Estate may be continued to be owned by Borrower or a Wholly-Owned Subsidiary of Borrower, but such Real Estate shall not be included as an Unencumbered Pool Property unless and until such Real Estate constitutes Eligible Real Estate and the conditions set forth in this Agreement for such Real Estate to be included as an Unencumbered Pool Property are satisfied (including, without limitation, the delivery of each of the Unencumbered Pool Qualification Documents with respect to such Real Estate, each of which shall be in form and substance reasonably satisfactory to the Agent), or the LKE Required Lenders otherwise consent to the inclusion of such Real Estate as an Unencumbered Pool Property, or (Y) Borrower shall promptly transfer, or cause to be transferred, such Real Estate (or the Equity Interests of the Person’s which directly or indirectly own such Real Estate), in each case, arbitration in accordance with the terms provisions of Section 9.15 and conditions of this Agreement, such that the replacement property shall no longer be owned, directly or indirectly, by Borrower, any Subsidiary Guarantor or any of their respective Subsidiaries; provided, in each case under this §8.15(f), (I) the Borrower shall at all times remain in compliance not materially inconsistent with the terms and conditions of this Agreementappraisal undertaken pursuant to Section 2.3. If such determination has not been made on or prior to the Closing, includingATS shall transfer to the "qualified intermediary" the amount proposed by Diablo in the Like-Kind Notice, without limitationsubject to an agreement by the "qualified intermediary" to remit to Diablo the excess, §§3.2(a))if any, §9.1 and §9.2, (II) the Borrower shall deliver to Agent, within three (3) Business Days’ of the consummation of such Like Kind Exchange, a Compliance Certificate (calculated after giving effect to amount so transferred over the consummation of such Like Kind Exchange), and (III) Agent shall release from amount as finally determined by the Guaranty each Subsidiary Guarantor which owns, directly or indirectly, any Real Estate that is transferred as contemplated in item (Y) above, provided, that any such Subsidiary Guarantor (A) does not own any direct or indirect interest in any Real Estate (or own any Equity Interests of a Person which directly or indirectly owns such Real Estate) other than the Real Estate that is transferred as contemplated in item (Y) above, and (B) is either dissolved or all of the Equity Interests in such Subsidiary Guarantor are transferred or conveyed to a Person other than Borrower, any Subsidiary Guarantor or any of their respective Subsidiaries, such that the Subsidiary Guarantor being released pursuant to this clause (III) shall no longer be a Material Subsidiary at the time of such release. Notwithstanding anything to the contrary contained in this §8.15, not more than one (1) Unencumbered Pool Property Owner (with respect to not more than one (1) Unencumbered Pool Property) shall be permitted to engage in a Like Kind Exchange and obtain the benefit of this §8.15 at any one time. Nothing contained in this §8.15 shall be deemed to modify or limit the covenants, representations, warranties, requirements, terms and conditions contained in this Agreement applicable to Real Estate, Eligible Real Estate and/or Unencumbered Pool Properties, including without limitation, the requirements set forth in the definition of Eligible Real Estate and §7.19(a). Notwithstanding anything to the contrary contained in this Agreement, if any action or inaction by Borrower under this §8.15 results in a violation of the covenants set forth in §9.1 or §9.2, any waiver or modification of such covenants made in order to cure such violation shall require the written consent of the LKE Required Lendersarbitrator.
Appears in 1 contract
Samples: Asset Purchase Agreement (American Tower Systems Corp)
