Common use of REIT Provisions Clause in Contracts

REIT Provisions. (a) Notwithstanding anything herein to the contrary, the Members hereby acknowledge the status of M-C Corp. as a real estate investment trust (a “REIT”). The Members further agree that the Company (and any subsidiaries) and the Project shall be managed in a manner so that: (a) the Company’s gross income meets the tests provided in Section 856(c)(2) and (3) of the Code as if the Company were a REIT; (b) the Company’s assets meet the tests provided in Section 856(c)(4) of the Code as if the Company were a REIT; and (c) the Company minimizes federal, state and local income and excise taxes that may be incurred by M-C Corp or any of its affiliates, including taxes under Code Sections 857(b), 860(c) or 4981 (collectively and together with other REIT provisions of the Code or Regulations, the “REIT Requirements”) provided that such minimization does not unreasonably increase taxes or costs for the other Members. The Members hereby acknowledge, agree and accept that, pursuant to this Section 9.5(a), the Company (or any of its subsidiaries) may be precluded from taking, or may be required to take, an action which it would not have otherwise taken, even though the taking or not taking of such action might otherwise be advantageous to the Company (or any of its subsidiaries) and/or to one or more of the Members (or one or more of their subsidiaries or affiliates). (b) Notwithstanding any other provision of this Agreement to the contrary, neither the Manager nor any Member will require the Company to take any material action which may, in the reasonable opinion of MCG’s tax advisors or legal counsel, result in the loss of M-C Corp.’s status as a REIT. Furthermore, the Manager shall take reasonable steps to structure the Company’s (or any subsidiary’s) transactions to eliminate any prohibited transactions tax or other taxes that may be applicable to MCG and/or M-C Corp to the extent such actions do not impose an unreasonable cost or tax on other Members. (c) If MCG’s counsel reasonably determines that a taxable REIT subsidiary (as described in Section 856(l) of the Code) (a “TRS”) should be established to hold MCG’s Membership Interest, or to provide services at the Project, then M-C Corp., MCG or the Members (or any of their affiliates), as applicable, may form, or cause to be formed, such TRS only if it (i) provides at least five (5) days prior written notice thereof to the Members and (ii) prepares forms for election under Section 856(l)(l)(B) of the Code (in accordance with guidance issued by the Internal Revenue Service) for M-C Corp. and causes the TRS to execute such election form and forwards it to the Company, and each Member for execution and filing by M-C Corp. if it so chooses. Each Member shall reasonably cooperate with the formation of any TRS and execute any documents deemed reasonably necessary by M-C Corp. or MCG in connection therewith. The Members shall reasonably cooperate in structuring ownership in the TRS favorably for all Members. (d) Without limiting the provisions of this Section 9.5, the Manager shall: (i) distribute sufficient cash to allow M-C Corp. to make all distributions attributable to its investment in the Company that are required due to its REIT status; provided, that, no cash shall be required to be distributed pursuant to this Section 9.5(d)(i) to the extent that: (y) the amounts required to be distributed by M-C Corp. are due solely to allocations of Net Profits or gain made to MCG pursuant to Section 8.1(b)(i), Section 8.1(d) (provided, that all proceeds resulting from the Capital Event that are available for distribution are distributed pursuant to Section 7.1 within 5 Business Days of the Capital Event) or Section 8.1(e) (provided, that all proceeds resulting from the sale pursuant to Section 10.5 that are available for distribution are distributed pursuant to Section 10.6 within 5 Business Days of the sale); or (z) such distribution is prohibited under an applicable credit agreement or loan document to which the Company or its subsidiaries are a party, provided that all amounts that were not distributed due to this Section 9.5(d)(i)(z) are immediately distributed as soon as permissible under the applicable credit agreement or loan document; (ii) promptly deliver to MCG, following any request made by MCG from time to time, financial information demonstrating that the Company is in compliance with the REIT Requirements; (iii) deliver no later than twenty (20) days after the end of each fiscal quarter of each Fiscal Year, except for the fourth fiscal quarter, and thirty (30) days after the end of the fourth fiscal quarter of each Fiscal Year, certification that the Company is in compliance with the REIT Requirements; (iv) permit MCG to review any new leases and material modifications to existing leases (including renewals) for 2 Business Days prior to Company signing such new leases, provided that if MCG raises no issues with the lease, Company may enter into it, and MCG shall only request changes to the lease to the extent that a lease is reasonably likely to cause the Company to not comply with the requirements of Sections 9.5(a) and/or (b) of this Agreement; (v) request MCG’s permission prior to purchasing any interest in another entity or real property, provided that such permission may only be withheld by MCG if such investment would cause the Company to violate the requirements of Section 9.5(a) and/or (b) of this Agreement; (vi) request MCG’s permission before beginning to offer any new services at the Project, provided that such permission may only be withheld by MCG if offering such services was reasonably likely to cause the Company to violate the requirements of Section 9.5(a) and/or (b) of this Agreement. In the event that providing such service would cause problems in complying with the REIT Requirements, Manager and an MCG will work together to structure offering such services under 9.5(c); (vii) request MCG’s permission before depositing or investing cash in any manner other than in US dollars in a checking or money market account at a bank, or a money market fund, in the United States, provided that such permission may only be withheld by MCG if such investment of cash would cause the Company to violate the requirements of Section 9.5(a) and/or (b) of this Agreement; (viii) request MCG’s permission prior to selling or beginning to market the Project for sale or any assets thereof prior to 2 years after the acquisition of the Project provided that such permission may only be withheld by MCG if the marketing or sale of the Project or any assets thereof was reasonably likely to cause the Company to violate the requirements of Section 9.5(a) and/or (b) of this Agreement; and (ix) restructure the offering of services at the Project in accordance with MCG’s advice, if such advice is to prevent the Company from violating the requirements of Section 9.5(a), (b) and/or (c) of this Agreement.

REIT Provisions. (a) Notwithstanding anything herein to the contrary, the Members hereby acknowledge the status of M-C Corp. as a real estate investment trust (a “REIT”). The Members further agree that the Company (and any subsidiaries) and the Project shall be managed in a manner so that: (a) the Company’s gross income meets the tests provided in Section 856(c)(2) and (3) of the Code as if the Company were a REIT; (b) the Company’s assets meet the tests provided in Section 856(c)(4) of the Code as if the Company were a REIT; and (c) the Company minimizes federal, state and local income and excise taxes that may be incurred by M-C Corp or any of its affiliates, including taxes under Code Sections 857(b), 860(c) or 4981 (collectively and together with other REIT provisions of the Code or Regulations, the “REIT Requirements”) provided that such minimization does not unreasonably increase taxes or costs for the other Members. The Members hereby acknowledge, agree and accept that, pursuant to this Section 9.5(a), the Company (or any of its subsidiaries) may be precluded from taking, or may be required to take, an action which it would not have otherwise taken, even though the taking or not taking of such action might otherwise be advantageous to the Company (or any of its subsidiaries) and/or to one or more of the Members (or one or more of their subsidiaries or affiliates). (b) Notwithstanding any other provision of this Agreement to the contrary, neither the Manager nor any Member will require the Company to take any material action which may, in the reasonable opinion of MCG’s tax advisors or legal counsel, result in the loss of M-C Corp.’s status as a REIT. Furthermore, the Manager shall take reasonable steps to structure the Company’s (or any subsidiary’s) transactions to eliminate any prohibited transactions tax or other taxes that may be applicable to MCG and/or M-C Corp to the extent such actions do not impose an unreasonable cost or tax on other Members. (c) If MCG’s counsel reasonably determines that a taxable REIT subsidiary (as described in Section 856(l) of the Code) (a “TRS”) should be established to hold MCG’s Membership Interest, or to provide services at the Project, then M-C Corp., MCG or the Members (or any of their affiliates), as applicable, may form, or cause to be formed, such TRS only if it (i) provides at least five (5) days prior written notice thereof to the Members and (ii) prepares forms for election under Section 856(l)(l)(B) of the Code (in accordance with guidance issued by the Internal Revenue Service) for M-C Corp. and causes the TRS to execute such election form and forwards it to the Company, and each Member for execution and filing by M-C Corp. if it so chooses. Each Member shall reasonably cooperate with the formation of any TRS and execute any documents deemed reasonably necessary by M-C Corp. or MCG in connection therewith. The Members shall reasonably cooperate in structuring ownership in the TRS favorably for all Members. (d) Without limiting the provisions of this Section 9.5, the Manager shall: (i) distribute sufficient cash to allow M-C Corp. to make all distributions attributable to its investment in the Company that are required due to its REIT status; provided, that, no cash shall be required to be distributed pursuant to this Section 9.5(d)(i) to the extent that: (y) the amounts required to be distributed by M-C Corp. are due solely to allocations of Net Profits or gain made to MCG pursuant to Section 8.1(b)(i), Section 8.1(d) (provided, provided that all proceeds resulting from the Capital Event that are available for distribution are distributed pursuant to Section 7.1 within 5 Business Days of the Capital Event) or Section 8.1(e) (provided, provided that all proceeds resulting from the sale pursuant to Section 10.5 that are available for distribution are distributed pursuant to Section 10.6 within 5 Business Days of the sale); or (z) such distribution is prohibited under an applicable credit agreement or loan document to which the Company or its subsidiaries are a party, provided that all amounts that were not distributed due to this Section 9.5(d)(i)(z) are immediately distributed as soon as permissible under the applicable credit agreement or loan document; (ii) promptly deliver to MCG, following any request made by MCG from time to time, financial information demonstrating that the Company is in compliance with the REIT Requirements; (iii) deliver no later than twenty (20) days after the end of each fiscal quarter of each Fiscal Year, except for the fourth fiscal quarter, and thirty (30) days after the end of the fourth fiscal quarter of each Fiscal Year, certification that the Company is in compliance with the REIT Requirements; (iv) permit MCG to review any new leases and material modifications to existing leases (including renewals) for 2 Business Days prior to Company signing such new leases, provided that if MCG raises no issues with the lease, Company may enter into it, and MCG shall only request changes to the lease to the extent that a lease is reasonably likely to cause the Company to not comply with the requirements of Sections 9.5(a) and/or (b) of this Agreement; (v) request MCG’s permission prior to purchasing any interest in another entity or real property, provided that such permission may only be withheld by MCG if such investment would cause the Company to violate the requirements of Section 9.5(a) and/or (b) of this Agreement; (vi) request MCG’s permission before beginning to offer any new services at the Project, provided that such permission may only be withheld by MCG if offering such services was reasonably likely to cause the Company to violate the requirements of Section 9.5(a) and/or (b) of this Agreement. In the event that providing such service would cause problems in complying with the REIT Requirements, Manager and an MCG will work together to structure offering such services under 9.5(c); (vii) request MCG’s permission before depositing or investing cash in any manner other than in US dollars in a checking or money market account at a bank, or a money market fund, in the United States, provided that such permission may only be withheld by MCG if such investment of cash would cause the Company to violate the requirements of Section 9.5(a) and/or (b) of this Agreement; (viii) request MCG’s permission prior to selling or beginning to market the Project for sale or any assets thereof prior to 2 years after the acquisition of the Project provided that such permission may only be withheld by MCG if the marketing or sale of the Project or any assets thereof was reasonably likely to cause the Company to violate the requirements of Section 9.5(a) and/or (b) of this Agreement; and (ix) restructure the offering of services at the Project in accordance with MCG’s advice, if such advice is to prevent the Company from violating the requirements of Section 9.5(a), (b) and/or (c) of this Agreement.

REIT Provisions. (a) A. Notwithstanding anything herein to the contrary, each Member acknowledges that one or more of the Members hereby acknowledge the status or one or more of M-C Corp. a Member’s direct or indirect equity owners is qualified and operates, and intends to continue to qualify and operate, as a “real estate investment trust within the meaning of Section 856 et. seq. of the Code (a “REIT”) for federal income tax purposes (each such Member or equity owner, a “REIT Member Owner”), and that such REIT Member Owner’s ability to continue to qualify and operate as a REIT and to avoid being subject to corporate-level income, and certain excise taxes will depend to some extent upon the nature of the Company’s income, assets and operations. The Members further agree that Accordingly, the business and activities of the Company (including the business and activities of any subsidiaries) and the Project shall be managed in a manner so that: (a) subsidiary of the Company’s gross income meets the tests provided in Section 856(c)(2) and (3) of the Code are intended to be conducted as if the Company were itself a REIT. To this end, subject to Subsection D., below, the Manager will use its commercially reasonable efforts to cause the Company to operate in a manner such that the Company, assuming it were a REIT, would continue to qualify as a REIT and would not be subject to any taxes under Section 857 of the Code, determined without regard to the distributions required in order to maintain REIT status or to avoid income and excise taxes imposed on a REIT. For purposes of determining whether the Company has met the requirements set forth in this Section 1.10, the Company may rely on the advice of counsel and the Accountants. B. Notwithstanding anything to the contrary contained in this Agreement, but subject to Subsection D., below, during the time a REIT Member Owner or any Affiliate thereof that is a REIT owns a direct or indirect beneficial interest in the Company, without the consent of each such REIT Member Owner (which it may grant or withhold in its sole discretion) neither the Company nor its Affiliates shall take, or refrain from taking, any action which is inconsistent with the requirements of Subsection A. of this Section 1.10 (such actions collectively the “REIT Prohibited Transactions”), including in each case, without limitation, any of the following to the extent that the amount of income received from such activity or the ownership of such asset, when taken together with any other income or assets of the Company, would exceed the thresholds permitted of the Company if the Company were itself a REIT: (i) entering into any lease that provides for rent based in whole or in part on the income or profits of any Person; (ii) entering into any lease with a Person designated in writing by a REIT Member Owner, which written designation may set forth: (X) any Person in which such REIT Member Owner owns, directly or indirectly: (a) in the case of any Person which is a corporation, stock of such Person possessing 10% or more of the total combined voting power of all classes of stock entitled to vote, or 10% or more of the total value of shares of all classes of stock of such Person; or (b) in the case of any Person which is not a corporation, an interest of 10% or more in the assets or net profits of such Person or (Y) any person required to be treated as an independent contractor from which such REIT Member Owner may not receive any income; (iii) entering into any lease without complying with the following procedures: (a) prior to entering into any new lease with a prospective tenant, the Company shall provide the name of such prospective tenant to the Xxxxxx Member (or a Person designated by the Xxxxxx Member in writing (a “Xxxxxx Designee”)); (b) the Company’s assets meet Xxxxxx Member (or the tests provided Xxxxxx Designee) shall inform the Company within two (2) Business Days whether Xxxxxx Pacific Properties, Inc. (“Xxxxxx REIT”) owns (actually or constructively) or reasonably anticipates so owning in Section 856(c)(4) excess of, in the case of a prospective tenant that is a corporation, 9.9% of the Code as if voting power or value of such corporation’s shares, or in the Company were case of a REITprospective tenant that is an entity other than a corporation, a 9.9% interest in the assets or net profits of such entity; and (c) the Company minimizes federal, state and local income and excise taxes if Xxxxxx REIT reasonably determines that may be incurred by M-C Corp it owns actually or any of its affiliates, including taxes under Code Sections 857(b), 860(cconstructively) or 4981 (collectively and together with other REIT provisions of the Code or Regulations, the “REIT Requirements”) provided that reasonably anticipates so owning such minimization does not unreasonably increase taxes or costs for the other Members. The Members hereby acknowledge, agree and accept that, pursuant to this Section 9.5(a)an interest, the Company shall not enter into a lease with such prospective tenant, unless the Xxxxxx Member (or the Xxxxxx Designee) determines, in its sole and absolute discretion, that rents from such prospective tenant could not jeopardize Xxxxxx REIT’s status as a REIT; (iv) entering into any lease of space for a term of less than 30 days; (v) leasing personal property, except a lease of personal property that is entered into in connection with a lease of real property where the rent attributable to the personal property is less than 15% of the total rent provided for under the lease, determined as set forth in Section 856(d)(1) of the Code; (vi) providing any services or amenities to tenants, other than services that are (a) customarily furnished or rendered in connection with the rental of space for occupancy only (as opposed to rendered primarily for the convenience of the tenant); (b) customarily furnished or rendered by or on behalf of landlords in connection with the rental of real property of a similar class in the geographic areas in which the real property is located and provided by an independent contractor from which the Company, and, as of the date on which the arrangement with the independent contractor is entered into, each REIT Member Owner and any Affiliate that is a REIT to which an interest in the Company is transferred, derive no income; or (c) provided by a “taxable REIT subsidiary” (as defined in Section 856(l) of the Code) of a REIT Member Owner; (vii) owning or acquiring any stock, loan or other debt or equity securities of, or make any advances to, another issuer (including an Affiliate of the Company), other than Owner or any other entity that is treated as disregarded from the Company for tax purposes; (viii) owning property except real property, furniture, fixtures and equipment associated with such real property, cash, bank demand and time deposits and receivables which arise in the ordinary course of its subsidiariesrental business, such as rent from leases; or (ix) may deriving income in any calendar year other than rents from real property, interest on bank demand or time deposits, and gains from the sale of real property. So long as a REIT Member Owner or any Affiliate thereof owns a direct or indirect beneficial interest in the Company, the Company shall, promptly upon the request of any REIT Member Owner, make available to such REIT Member Owner all data and information in the possession of such parties which is determined by such REIT Member Owner to be precluded from takingnecessary or helpful to (a) determine the tax treatment of such REIT Member Owner or any Affiliate thereof, or may (b) monitor such REIT Member Owner’s compliance with the requirements relating to the status of such REIT Member Owner as a REIT. C. The provisions of this Section 1.10 are solely for the benefit of those Members that are REIT Member Owners or are owned, directly or indirectly, by a REIT Member Owner and no other Person shall have the right to enforce, or be required the beneficiary of, the provisions of this Section 1.10. The limitations of this Section 1.10 shall be applicable even if they require the Company to takeforego an otherwise advantageous business opportunity and/or affects the profitability of the Company and/or otherwise precludes the Company from taking an action, or requires the Company to take an action which it would not have otherwise taken, even though the taking of such action or not taking of such action action, respectively, might otherwise be advantageous to the Company (or any of its subsidiaries) and/or to one or more of the Members (or one or more of their subsidiaries or affiliates)Members. (b) D. Notwithstanding any other provision the foregoing provisions of this Agreement Section 1.10: (i) the Xxxxxx Member shall be deemed to the contrary, neither the Manager nor any Member will require the Company to take any material action which may, in the reasonable opinion have approved of MCG’s tax advisors or legal counsel, result in the loss of M-C Corp.’s status as a REIT. Furthermore, the Manager shall take reasonable steps to structure the Company’s (or any subsidiary’s) transactions to eliminate any prohibited transactions tax or other taxes that may be applicable to MCG and/or M-C Corp ownership of all assets owned as of the date hereof, including the escrow account established pursuant to the extent Loan Documents (and any subsequent increases in the balance of such actions do not impose an unreasonable cost or tax on other Members. (c) If MCG’s counsel reasonably determines that a taxable REIT subsidiary (as described in Section 856(l) of the Code) (a “TRS”) should be established to hold MCG’s Membership Interest, or to provide services at the Project, then M-C Corp., MCG or the Members (or any of their affiliatesescrow account), as applicable, may form, or cause to be formed, such TRS only if it (i) provides at least five (5) days prior written notice thereof to the Members and (ii) prepares forms for election under Section 856(l)(l)(B) the Xxxxxx Member shall be deemed to have approved of all income that is currently being earned, and all services currently being provided, by the Company as of the Code (in accordance with guidance issued by date hereof; provided, however, the Internal Revenue Service) for M-C Corp. and causes the TRS parties shall use commercially reasonable efforts to execute such election form and forwards it resolve any issues relating to the Company, foregoing deemed approvals which arises subsequent to the Effective Date and each would negatively impact a REIT Member for execution and filing by M-C Corp. if it so choosesOwner. Each Member shall reasonably cooperate with Further notwithstanding the formation of any TRS and execute any documents deemed reasonably necessary by M-C Corp. or MCG in connection therewith. The Members shall reasonably cooperate in structuring ownership in the TRS favorably for all Members. (d) Without limiting the foregoing provisions of this Section 9.51.10, the Manager shall: (i) distribute sufficient cash to allow M-C Corp. to make all distributions attributable to its investment nothing in the Company that are required due to its REIT status; provided, that, no cash shall be required to be distributed pursuant to this Section 9.5(d)(i) to the extent that: (y) the amounts required to be distributed by M-C Corp. are due solely to allocations of Net Profits or gain made to MCG pursuant to Section 8.1(b)(i), Section 8.1(d) (provided, that all proceeds resulting from the Capital Event that are available for distribution are distributed pursuant to Section 7.1 within 5 Business Days of the Capital Event) or Section 8.1(e) (provided, that all proceeds resulting from the sale pursuant to Section 10.5 that are available for distribution are distributed pursuant to Section 10.6 within 5 Business Days of the sale); or (z) such distribution is prohibited under an applicable credit agreement or loan document to which 1.10 shall prevent the Company or its subsidiaries are any Member from disposing of the Property or any interest therein in a party, provided that all amounts that were not distributed due to this Section 9.5(d)(i)(z) are immediately distributed as soon as permissible under the applicable credit agreement or loan document; (ii) promptly deliver to MCG, following any request made by MCG from time to time, financial information demonstrating that the Company is in compliance manner otherwise consistent with the REIT Requirements; (iii) deliver no later than twenty (20) days after the end of each fiscal quarter of each Fiscal Year, except for the fourth fiscal quarter, and thirty (30) days after the end of the fourth fiscal quarter of each Fiscal Year, certification that the Company is in compliance with the REIT Requirements; (iv) permit MCG to review any new leases and material modifications to existing leases (including renewals) for 2 Business Days prior to Company signing such new leases, provided that if MCG raises no issues with the lease, Company may enter into it, and MCG shall only request changes to the lease to the extent that a lease is reasonably likely to cause the Company to not comply with the requirements of Sections 9.5(a) and/or (b) terms of this Agreement; (v) request MCG’s permission prior to purchasing any interest in another entity or real property, provided that such permission may only be withheld by MCG if such investment would cause the Company to violate the requirements of Section 9.5(a) and/or (b) of this Agreement; (vi) request MCG’s permission before beginning to offer any new services at the Project, provided that such permission may only be withheld by MCG if offering such services was reasonably likely to cause the Company to violate the requirements of Section 9.5(a) and/or (b) of this Agreement. In the event that providing such service would cause problems in complying with the REIT Requirements, Manager and an MCG will work together to structure offering such services under 9.5(c); (vii) request MCG’s permission before depositing or investing cash in any manner other than in US dollars in a checking or money market account at a bank, or a money market fund, in the United States, provided that such permission may only be withheld by MCG if such investment of cash would cause the Company to violate the requirements of Section 9.5(a) and/or (b) of this Agreement; (viii) request MCG’s permission prior to selling or beginning to market the Project for sale or any assets thereof prior to 2 years after the acquisition of the Project provided that such permission may only be withheld by MCG if the marketing or sale of the Project or any assets thereof was reasonably likely to cause the Company to violate the requirements of Section 9.5(a) and/or (b) of this Agreement; and (ix) restructure the offering of services at the Project in accordance with MCG’s advice, if such advice is to prevent the Company from violating the requirements of Section 9.5(a), (b) and/or (c) of this Agreement.