Common use of REIT Compliance Clause in Contracts

REIT Compliance. The Company shall not take or fail to take any action (or cause any Venture Vehicle to take or fail to take any action) that would adversely affect the ability of PB REIT to qualify or continue to qualify as a REIT, or subject PB REIT to any additional taxes under Section 857 of the Code or Section 4981 of the Code (collectively the “REIT Regulations”). If the Company or any Venture Vehicle is required to take or fail to take any action that would adversely affect the ability of PB REIT to qualify as a REIT or would subject PB REIT to any additional taxes under the REIT Regulations, the Members, upon receipt of notice thereof, will take all actions necessary, or cause the Company and each Venture Vehicle to take such actions, to avoid such adverse consequences but at no or nominal cost to the Xxxxxxx Member. The Members agree that in the event that PB Member or PB REIT shall propose to take any action (or cause the Company or any Venture Vehicle to take any action) to ensure the continued qualification of PB REIT as a REIT or to avoid the imposition of additional taxes under the REIT Regulations, the Members shall cooperate in good faith but at no or nominal cost to Xxxxxxx Member to determine and implement a course of action which shall, to the extent reasonably possible, preserve PB REIT’s REIT status, avoid the imposition of additional taxes, and avoid such adverse effects. If any revisions, modifications, amendments, alterations, supplements or restructurings are required to be made to this Agreement, the Operating Lessee Agreement, any Hotel Operating Lease, any related agreement or the Company’s, the Operating Lessee’s or any Hotel Lessee’s ownership structure generally in order to preserve PB REIT’s status or otherwise avoid the imposition of additional taxes under any applicable REIT Regulations or other adverse consequences, the PB Member shall bear the entire out-of-pocket cost thereof (without the same constituting a Capital Contribution by the PB Member).

Appears in 2 contracts

Samples: Operating Agreement (Pebblebrook Hotel Trust), Operating Agreement (Pebblebrook Hotel Trust)

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REIT Compliance. The Members hereby acknowledge that Madison Member and/or certain of the direct and indirect owners of Madison Member or their permitted transferees (each such entity, an “Upstream REIT”) qualify or may in the future qualify as a real estate investment trust (a “REIT”) within the meaning of Sections 856-859 of the Code. Each Member hereby acknowledges and agrees that the Company’s business shall be conducted so as to cause the income and assets of the Company and each Subsidiary to meet the requirements of Sections 856(c)(2), (c)(3) and (c)(4) of the Code (as if the Company and each Subsidiary were a REIT), and otherwise in a manner so as to not adversely affect or impact the ability of each Upstream REIT to qualify or to continue to qualify as a REIT or result in the imposition of any federal income or excise tax liability on the Upstream REIT. If a Member approves in writing any action to be taken by the Company or any Subsidiary, such Member shall not be entitled, under any circumstances, to assert that such approved action constitutes a violation of this Section 6.06. The Members further acknowledge that Madison Member shall be entitled to receive information regarding the Capital Account balances of the Members, the Company’s items of income, gain, deduction and loss, and such other information regarding the operations of the Company and each Property (or component portion thereof) as is necessary to permit Madison Member to properly report and allocate its allocable share of the Company’s items of income, gain, deduction and loss in compliance with its organizational documents and the compliance requirements for its REIT qualification. In furtherance of the foregoing (and not in limitation thereof), and notwithstanding any other provision herein to the contrary, the Company and/or its Subsidiaries shall conduct its operations at all times in accordance with the following provisions: (a) personal property, if leased in connection with any Property or portion thereof may only be leased together with a lease of the applicable Property or portion thereof, and the average of the fair market values of the Company’s personal property subject to any such lease at the beginning and at the end of a taxable year shall not exceed fifteen percent (15%) of the average of the fair market values of such Property and the personal property leased under such lease together, within the meaning of Code Section 856(d)(1); (b) no amount received or accrued from the rental of any Property or any portion thereof, shall be determined in whole or in part by reference to the income or profits derived by any person from the leased property within the meaning of Code Section 856(d)(2)(A), unless (x) substantially all of the tenant’s income from the leased property consists of rents derived from subleasing substantially all of the leased property, and (y) those rents would be treated as “rents from real property” (within the meaning of Code Section 856(d)(2)) if received directly by the Company; (c) no Property nor any portion thereof shall be leased to any party who subleases such Property or any portion thereof, if the rent payable with respect to the lease is based on a percentage of the tenant’s receipts or sales and the rent payable with respect to the sublease is determined in whole or in part by reference to the income or profits derived by any person from the subleased property; (d) no Property shall be leased or subleased to a lessee or sublessee in which the Company, its Subsidiaries and/or Madison Member owns, directly or indirectly (taking into account the attribution rules referred to in Code Section 856(d)(5)), in the aggregate ten percent (10%) or more of the voting power of all classes of voting stock or ten percent (10%) or more of the total number of shares of all classes of stock of any corporate lessee or sublessee, or ten percent (10%) or more in the net profits or assets of any noncorporate lessee or sublessee; (e) the Company and its Subsidiaries shall hold each Property for purposes of obtaining income through the rental and long term appreciation of such Property; (f) the Company and/or its Subsidiaries shall not engage in any “prohibited transaction” within the meaning of Code Section 857(b)(6)(B)(iii); (g) no services will be provided to the tenants at any Property by the Company and/or the Subsidiaries other than maintenance of the grounds and common areas, the collection of trash, security and fire protection services, the maintenance and lighting of parking lots and designation of handicapped spaces, the submetering of utility services, the maintenance and repair of leased space, the provision of vending machines and public telephones, and other services, to the extent that any such services are customarily provided in connection with the rental of similar space solely for occupancy or do not otherwise cause the income derived from such tenants to be other than “rents from real property” within the meaning of Code Section 856(d)(2); (h) neither the Company, any Subsidiary nor any Member shall take any action (or fail to take any action (permitted under this Agreement) that would cause the Company to generate any amount of income not described in Code Section 856(c)(2) which is in excess of 4% of its gross income or cause any Venture Vehicle significant part of the Company’s assets to take consist of assets other than “real estate assets” within the meaning of Code Section 856(c)(5)(B); (i) the Company shall distribute to the Members during each calendar year in accordance with the provisions of Article IV an amount of cash such that the portion distributed to Madison will equal or fail exceed one hundred percent (100%) of the amount of the Company’s taxable income, if any, to take be allocated to Madison with respect to such calendar year; provided, that if Madison shall agree, any action) distribution made in the month of January of a calendar year may be treated as if such distribution were made on December 31 of the preceding calendar year for purposes of this requirement; provided, further, that would adversely affect if Madison’s share of Available Cash is insufficient to meet the ability aforesaid distribution requirement with respect to Madison, then the Company shall have satisfied the foregoing requirement upon distributing to Madison its share of PB REIT Available Cash. In no event shall the Company be required to qualify or continue to qualify as a REITborrow funds, or subject PB REIT to any additional taxes under Section 857 of the Code or Section 4981 of the Code (collectively the “REIT Regulations”). If the Company or any Venture Vehicle is Member be required to take or fail to take any action that would adversely affect the ability of PB REIT to qualify as a REIT or would subject PB REIT to any additional taxes under the REIT Regulations, the Members, upon receipt of notice thereof, will take all actions necessary, or cause the Company and each Venture Vehicle to take such actions, to avoid such adverse consequences but at no or nominal cost contribute funds to the Xxxxxxx Member. The Members agree that in the event that PB Member or PB REIT shall propose to take any action (or cause the Company or any Venture Vehicle to take any action) to ensure the continued qualification of PB REIT as a REIT or to avoid the imposition of additional taxes under the REIT RegulationsCompany, the Members shall cooperate in good faith but at no or nominal cost to Xxxxxxx Member to determine and implement a course of action which shall, to the extent reasonably possible, preserve PB REIT’s REIT status, avoid the imposition of additional taxes, and avoid such adverse effects. If any revisions, modifications, amendments, alterations, supplements or restructurings are required to be made to this Agreement, the Operating Lessee Agreement, any Hotel Operating Lease, any related agreement or the Company’s, the Operating Lessee’s or any Hotel Lessee’s ownership structure generally in order to preserve PB REIT’s status permit the Company to satisfy the foregoing requirement; and (j) the Company shall not own securities possessing more than ten percent (10%) of the outstanding vote or otherwise avoid value of any issuer (as determined for purposes of Code Section 856(c)(4)(B)), provided that the imposition of additional taxes under any applicable REIT Regulations or other adverse consequences, Company's limited liability company interest in the PB Member Venture shall bear the entire out-of-pocket cost thereof (without the same constituting not be considered a Capital Contribution by the PB Member)security for this purpose.

Appears in 1 contract

Samples: Subscription Agreement (Thomas Properties Group Inc)

REIT Compliance. The Company shall At any time and from time to time, Sunrise will cooperate with Ventas to effectuate structural changes in the arrangements between Sunrise and Ventas that address Ventas’ U.S. REIT tax concerns, provided that Sunrise will not take or fail be required to take any action under this paragraph if such action (A) would have an adverse impact on the aggregate amount of, or the manner in which Sunrise would be required to account for, Sunrise’s Management Fees (as defined in the Management Agreement) or distributions from the JVs unless Ventas agrees to bear the cost of such impact, or (B) would cause any Venture Vehicle Sunrise (acting reasonably) to take have to change their accounting policies with respect to the JVs in a manner that is detrimental to Sunrise (unless Ventas agrees to bear the cost of such adverse change) or fail to take any actionhave to consolidate the JVs’ financial statements with Surnrise’s consolidated financial statements. For example, if requested by Ventas, Sunrise will cooperate with Ventas to modify the Existing Agreements in order for Ventas to comply with the requirements of the IRS Tax Code of 1986, as amended (the “Code”) that would adversely affect applicable to a REIT and a taxable REIT subsidiary, as applicable, including without limitation to accommodate (x) Ventas leasing one or more of the ability of PB properties acquired from the REIT to qualify a third party lessee (reasonably acceptable to Sunrise in terms of its ability to obtain any required regulatory license) who would be the counterparty to the existing management agreements (as modified hereby) with Sunrise and (y) Ventas subsequently unwinding such third party leases and directly or continue indirectly entering into the management agreements with Sunrise on the same terms as the existing management agreements (as modified hereby). In the case of (x) above, Ventas or an appropriate subsidiary would also agree to replace any lessee whose conduct would permit Sunrise to terminate the management agreement for the leased facility or whose tenancy is otherwise terminated by lessee or Ventas, so that the manager’s rights under the management agreement would be unaffected by the existence of the lease structure. Also in the case of (x) above, Ventas or an appropriate subsidiary would guarantee the obligations of the lessee under the management agreement to the maximum extent consistent with Ventas’ REIT status in Ventas’s reasonable opinion. Furthermore, Ventas agrees to make Sunrise whole for (i) any third party costs incurred by Sunrise or the facilities, and (ii) any one time or recurring charges assessed against Sunrise, the JVs or the facilities (e.g., real property transfer tax), in either case in connection with the implementation or unwinding of any structural changes made to accommodate Ventas’s US REIT tax concerns. Without limiting the generality of the foregoing, (A) Sunrise will advise Ventas as promptly as practicable (but in any event prior to doing so) if Sunrise enters into an agreement to acquire or be acquired or is acquired (in each case by any form of Transfer, as defined in the JV Agreements) by any tenant of Ventas named in Annex B hereto (as Annex B may be supplemented by Ventas from time to time by written notice to Sunrise); (B) Sunrise will reasonably cooperate and provide Ventas such other information with regard to Sunrise-managed properties owned in whole or in part by Ventas or related matters as Ventas may reasonably request from time to time in connection with the verification or protection of its REIT qualification; (C) Sunrise will use its reasonable best efforts to qualify and maintain qualification as a REITan “eligible independent contractor” for REIT purposes, and (D) if requested by Ventas, Sunrise will cooperate reasonably with Ventas and will exercise reasonable efforts to try to find solutions or subject PB REIT “workarounds” to any additional taxes under Section 857 issues that any of the Code or Section 4981 of the Code (collectively the “REIT Regulations”). If the Company foregoing matters disclosed to Ventas or any Venture Vehicle is required to take or fail to take any action that would adversely affect the ability other matters might create in respect of PB Ventas’ REIT to qualify as a REIT or would subject PB REIT to any additional taxes under the REIT Regulations, the Members, upon receipt of notice thereof, will take all actions necessary, or cause the Company and each Venture Vehicle to take such actions, to avoid such adverse consequences but at no or nominal cost to the Xxxxxxx Member. The Members agree that in the event that PB Member or PB REIT shall propose to take any action (or cause the Company or any Venture Vehicle to take any action) to ensure the continued qualification of PB REIT as a REIT or to avoid the imposition of additional taxes under the REIT Regulations, the Members shall cooperate in good faith but at no or nominal cost to Xxxxxxx Member to determine and implement a course of action which shall, to the extent reasonably possible, preserve PB REIT’s REIT status, avoid the imposition of additional taxes, and avoid such adverse effects. If any revisions, modifications, amendments, alterations, supplements or restructurings are required to be made to this Agreement, the Operating Lessee Agreement, any Hotel Operating Lease, any related agreement or the Company’s, the Operating Lessee’s or any Hotel Lessee’s ownership structure generally in order to preserve PB REIT’s status or otherwise avoid the imposition of additional taxes under any applicable REIT Regulations or other adverse consequences, the PB Member shall bear the entire out-of-pocket cost thereof (without the same constituting a Capital Contribution by the PB Member)qualification.

Appears in 1 contract

Samples: Consent Agreement (Ventas Inc)

REIT Compliance. The Company shall not take or fail to take any action (or cause any Venture Vehicle to take or fail to take any action) that would adversely affect the ability of PB REIT to qualify or continue to qualify as a REIT, or subject PB REIT to any additional taxes under Section 857 of the Code or Section 4981 of the Code (collectively the “REIT Regulations”). If the Company or any Venture Vehicle is required to take or fail to take any action that would adversely affect the ability of PB REIT to qualify as a REIT or would subject PB REIT to any additional taxes under the REIT Regulations, the Members, upon receipt of notice thereof, will take all actions necessary, or cause the Company and each Venture Vehicle to take such actions, to avoid such adverse consequences but at no or nominal cost to the Xxxxxxx Member. The Members agree that in the event that PB Member or PB REIT shall propose to take any action (or cause the Company or any Venture Vehicle to take any action) to ensure the continued qualification of PB REIT as a REIT or to avoid the imposition of additional taxes under the REIT Regulations, the Members shall cooperate in good faith but at no or nominal cost to Xxxxxxx Member to determine and implement a course of action which shall, to the extent reasonably possible, preserve PB REIT’s REIT status, avoid the imposition of additional taxes, and avoid such adverse effects. If any revisions, modifications, amendments, alterations, supplements or restructurings are required to be made to this Agreement, the Operating Lessee Fee Owner Agreement, any Hotel Operating Lease, any related agreement or the Company’s, the Operating LesseeFee Owner’s or any Hotel LesseeVenture Vehicle’s ownership structure generally in order to preserve PB REIT’s status or otherwise avoid the imposition of additional taxes under any applicable REIT Regulations or other adverse consequences, the PB Member shall bear the entire out-of-pocket cost thereof (without the same constituting a Capital Contribution by the PB Member).

Appears in 1 contract

Samples: Operating Agreement (Pebblebrook Hotel Trust)

REIT Compliance. The Company Notwithstanding anything contained herein to the contrary, so long as any holder of a direct or indirect equity interest in the American Member that has elected to be a real estate investment trust for federal income tax purposes (herein referred to as a “American Member REIT”) holds a direct or indirect interest in the Company, unless waived in writing by the American Member REIT, or a particular action is consented to in writing by the American Member, the parties hereto and their respective successors and assigns shall not take or fail to take any action (or cause any Venture Vehicle to take or fail to take any action) conduct their operations in a manner that would adversely affect shall permit the ability of PB American Member REIT to qualify or continue to qualify as a REITreal estate investment trust under Code sections 856 through and including 860, as amended, and under other applicable provisions of the Code and the Treasury Regulations thereunder. If the Company (or any Subsidiary) is required pursuant to the terms of this Agreement to take any action that would adversely affect the ability of the American Member REIT to qualify or continue to qualify as a real estate investment trust, or subject PB the American Member REIT to any additional taxes under Section 857 of the Code sections 856 through 860, or Section section 4981 of the Code (collectively the “REIT Regulations”). If , then the Members, upon receipt of written notice thereof, will cooperate in good faith to take such action or cause the Company or any Venture Vehicle is required to take or fail such action, to avoid such adverse consequences. The Manager shall have the right to propose taking any action (and to cause any Subsidiary to take any action) or to refrain from taking any action (and to cause any Subsidiary to refrain from taking any action) to ensure that American Member REIT would adversely affect the ability of PB REIT to so qualify as a REIT or and would not be subject PB REIT to any additional taxes under the REIT Regulations, so long as any such proposed action is the Members, upon receipt of notice thereof, will take all actions necessary, or cause minimum that would be hypothetically necessary in order for the Company and each Venture Vehicle to take such actions, qualify as a real estate investment trust or in order for the Company to avoid being subject to any taxes under the REIT Regulations, for this purpose taking into account only the actions of the Company (or any Subsidiary) and only taking into account taxable items of Company income, gain, deduction and loss in making such adverse consequences but at no or nominal cost to the Xxxxxxx Memberdetermination. The Members agree that in the event that PB Member or PB REIT the Manager shall propose to take any action (or cause the Company or any Venture Vehicle Subsidiary to take any action) to ensure the continued qualification of PB American Member REIT would so qualify as a REIT or to avoid the imposition of additional taxes under the REIT RegulationsRegulations as described above, the Members shall cooperate in good faith but at no or nominal cost to Xxxxxxx Member to determine and implement a course of action which shallwould, to the extent reasonably possible, preserve PB REIT’s REIT status, avoid the imposition of additional taxes, and avoid such adverse effects. If consequences; provided that (i) any revisions, modifications, amendments, alterations, supplements or restructurings are required to be made to this Agreement, such changes shall not have a material adverse effect on the Operating Lessee Agreement, any Hotel Operating Lease, any related agreement or APFC Member (as reasonably determined by the Company’s, APFC Member) and (ii) the Operating Lessee’s or any Hotel Lessee’s ownership structure generally in order to preserve PB REIT’s status or otherwise avoid the imposition of additional taxes under any applicable REIT Regulations or other adverse consequences, the PB American Member shall bear one hundred percent (100%) of (A) the entire out-of-pocket cost thereof (without including legal fees for both Members) in connection with the negotiation and documentation of any such amendments or modifications and (B) any other costs or expenses incurred by the APFC Member by virtue of the implementation of this Section 7.20. The American Member acknowledges that it is the sole responsibility of the American Member (and not the responsibility of the APFC Member) to review this Agreement and the Annual Business Plan and Budget and determine that each of the same constituting a Capital Contribution by satisfies the PB American Member)’s potential REIT concerns.

Appears in 1 contract

Samples: Limited Liability Company Agreement (American Homes 4 Rent)

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REIT Compliance. The Company shall not take or fail to take any action (or cause any Venture Vehicle to take or fail to take any action) that would adversely affect the ability of PB REIT to qualify or continue to qualify as a REIT, or subject PB REIT to any additional taxes under Section 857 of the Code or Section 4981 of the Code (collectively the “REIT Regulations”). If the Company or any Venture Vehicle is required to take or fail to take any action that would adversely affect the ability of PB REIT to qualify as a REIT or would subject PB REIT to any additional taxes under the REIT Regulations, the Members, upon receipt of notice thereof, will take all actions necessary, or cause the Company and each Venture Vehicle to take such actions, to avoid such adverse consequences but at no or nominal cost to the Xxxxxxx Member. The Members agree that in the event that PB Member or PB REIT shall propose to take any action (or cause the Company or any Venture Vehicle to take any action) to ensure the continued qualification of PB REIT as a REIT or to avoid the imposition of additional taxes under the REIT Regulations, the Members shall cooperate in good faith but at no or nominal cost to Xxxxxxx Member to determine and implement a course of action which shall, to the extent reasonably possible, preserve PB REIT’s REIT status, avoid the imposition of additional taxes, and avoid such adverse effects. If any revisions, modifications, amendments, alterations, supplements or restructurings are required to be made to this Agreement, the Operating Lessee Agreement, any Hotel Operating Lease, any related agreement or the Company’s, the Operating Lessee’s or any Hotel Lessee’s ownership structure generally in order to preserve PB REIT’s status or otherwise avoid the imposition of additional taxes under any applicable REIT Regulations or other adverse consequences, the PB Member shall bear the entire out-of-pocket cost thereof (without the same constituting a Capital Contribution by the PB Member).

Appears in 1 contract

Samples: Operating Agreement (Pebblebrook Hotel Trust)

REIT Compliance. The Company shall not take or fail to take any action (or cause any Venture Vehicle to take or fail to take any action) that would adversely affect the ability of PB Hersha REIT to qualify or continue to qualify as a REIT, or subject PB Hersha REIT to any additional taxes under Section 857 of the Code or Section 4981 of the Code or the regulations promulgated thereunder (collectively collectively, the “REIT Regulations”). If the Company or any Venture Vehicle is required to take or fail to take any action that would adversely affect the ability of PB Hersha REIT to qualify as a REIT or would subject PB Hersha REIT to any additional taxes under the REIT Regulations, the Members, upon receipt of notice thereof, will take all actions necessary, or cause the Company and each Venture Vehicle to take such actions, to avoid such adverse consequences but at no or nominal cost to the Xxxxxxx Cindat Member. The Members agree that in the event that PB Hersha Member or PB Hersha REIT shall propose to take any action (or cause the Company or any Venture Vehicle to take any action) to ensure the continued qualification of PB Hersha REIT as a REIT or to avoid the imposition of additional taxes under the REIT Regulations, the Members shall cooperate in good faith but at no or nominal cost to Xxxxxxx Cindat Member to determine and implement a course of action which shall, to the extent reasonably possible, preserve PB Hersha REIT’s REIT status, avoid the imposition of additional taxes, and avoid such adverse effects. If any revisions, modifications, amendments, alterations, supplements or restructurings are required to be made to this Agreement, the Owner JV Operating Lessee Agreement, any Hotel Operating Lease, any related agreement or the Company’s, the Operating LesseeOwner JV’s or any Hotel Lessee’s ownership structure generally in order to preserve PB Hersha REIT’s status or otherwise avoid the imposition of additional taxes under any applicable REIT Regulations or other adverse consequences, the PB Hersha Member shall bear the entire out-of-pocket cost thereof (without the same constituting a Capital Contribution by the PB Hersha Member).

Appears in 1 contract

Samples: Operating Agreement (Hersha Hospitality Trust)

REIT Compliance. (a) The Members acknowledge and understand that, following a REIT Transaction, the REIT will be a Member of the Company, and that in order for the REIT to maintain its status as a real estate investment trust under the Code, the REIT must comply with numerous and complex rules and regulations set forth in the Code and the Regulations, many of which are applied on a quarterly and/or annual basis and that the management and operation of the Company shall not take or fail to take any action (or cause any Venture Vehicle to take or fail to take any action) that would adversely affect will have a material effect on the ability of PB the REIT to qualify or continue to qualify and maintain its status as a REITreal estate investment trust. Accordingly, notwithstanding any other provision of this Agreement or subject PB REIT to any additional taxes under Section 857 non-mandatory provision of the Code or Section 4981 Act, the Managers agree to use reasonable best efforts to manage the business and affairs of the Code Company in a manner that will satisfy the following objectives (collectively collectively, the “REIT RegulationsObjectives). If ) relating to the Company or any Venture Vehicle is required to take or fail to take any action that would adversely affect status of the ability of PB REIT to qualify as a REIT or would subject PB REIT to any additional taxes real estate investment trust under the REIT Regulations, the Members, upon receipt of notice thereof, will take all actions necessary, or cause the Company and each Venture Vehicle to take such actions, to avoid such adverse consequences but at no or nominal cost to the Xxxxxxx Member. The Members agree that in the event that PB Member or PB REIT shall propose to take any action Code: (or cause the Company or any Venture Vehicle to take any actioni) to ensure the continued qualification of PB the REIT as a REIT or real estate investment trust under Code Section 856 and (ii) to avoid the imposition of additional taxes under on the REIT Regulations, the Members under Code Sections 857 or 4981. The Managers shall cooperate in good faith but at no or nominal cost to Xxxxxxx Member to determine and implement a course of action which that shall, to the greatest extent reasonably possible, preserve PB satisfy the REIT Objectives. The Members agree to use commercially reasonable efforts to cooperate with the REIT Objectives at the REIT’s REIT statuscost and expense and upon Manager’s request. (b) Without limiting the generality of Section 6.12(a), avoid (i) each of the imposition of additional taxesProperties will be leased to an entity that is taxable as an association taxable as a corporation (a “Lessee”) for U.S. federal income tax purposes at market-rate leases, and avoid each such adverse effects. If any revisionsLessee will contract with a property manager that meets the definition of “eligible independent contractor” pursuant to Section 856(d)(9)(B) of the Code and (ii) the Company will cause the Lessee (or each Lessee, modifications, amendments, alterations, supplements or restructurings are required if there be more than one) to be made to this Agreementmake a taxable REIT subsidiary election with the REIT by jointly filing a Form 8875 upon the REIT’s acquisition of an Interest in the Company. (c) For the avoidance of doubt, the Operating Lessee AgreementREIT in its capacity as a Manager, and notwithstanding any Hotel Operating Leaseimplication to the contrary in Section 6.1(c), any related agreement shall have the right (either itself or through the Company’s), in consultation with the Operating Lessee’s its counsel or tax accountants, to authorize and approve any Hotel Lessee’s ownership structure generally action (including a determination not to take an action) that is necessary in order to preserve PB REIT’s the status or otherwise avoid of the imposition of additional taxes under any applicable REIT Regulations or other adverse consequences, the PB Member shall bear the entire out-of-pocket cost thereof (without the same constituting as a Capital Contribution by the PB Member)real estate investment trust.

Appears in 1 contract

Samples: Limited Liability Company Agreement (Procaccianti Hotel Reit, Inc.)

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