Common use of REIT Requirements Clause in Contracts

REIT Requirements. (a) Lessee understands that, in order for MHI to qualify as a REIT, the following requirements (the “REIT Requirements”) must be satisfied: (i) The average of the fair market values of Lessor’s personal property that is leased to Lessee under a lease at the beginning and end of a calendar year cannot exceed 15% of the average of the aggregate fair market values of all of Lessor’s property that is leased to Lessee under such lease at the beginning and end of such calendar year. (ii) Lessee cannot sublet the property that is leased to it by Lessor, or enter into any similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in whole or in part, on either (i) the net income or profits derived by the business activities of the sublessee or (ii) any other formula such that any portion of the rent paid by Lessee to Lessor would fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code. (iii) Lessee cannot sublease the property leased to it by Lessor to, or enter into any similar arrangement with, any person in which MHI owns, directly or indirectly, a 10% or more interest, within the meaning of Section 856(d)(2)(B) of the Code. (iv) Lessee agrees to make an election to be, and to operate as a “Taxable REIT Subsidiary” of MHI within the meaning of Section 856(l) of the Code. (v) No person can own, directly or directly, capital stock of MHI that exceeds the “LIMIT” (as defined in MHI’s certificate of incorporation, as amended and restated). (vi) Lessee shall not (i) directly or indirectly operate or manage a “Lodging Facility” within the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care Facility” within the meaning of Section 856(e)(6)(D)(ii) or (ii) directly or indirectly provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Lessee may provide such rights to Manager to operate or manage a lodging facility as long as such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its Affiliates. (b) Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to use its best efforts to permit the REIT Requirements to be satisfied. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to cooperate in good faith with MHI and Lessor to ensure that the REIT Requirements are satisfied, including but not limited to, providing MHI with information about the ownership of Lessee, and its Affiliates to the extent that such information is reasonably available. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, upon request by MHI, and, where appropriate, at MHI’s expense, to take reasonable action necessary to ensure compliance with the REIT Requirements. Immediately after becoming aware that the REIT Requirements are not, or will not be, satisfied, Lessee shall notify, or use reasonable efforts to cause its Affiliates to notify, MHI of such noncompliance.

Appears in 2 contracts

Samples: Lease Agreement (MHI Hospitality CORP), Lease Agreement (MHI Hospitality CORP)

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REIT Requirements. (a) Lessee understands that, in order for MHI AHT to qualify as a REIT, the following requirements (the "REIT Requirements”REQUIREMENTS") must be satisfied: (iA) The average of the fair market values of Lessor’s 's personal property that is leased to Lessee under a lease at the beginning and end of a calendar year cannot exceed 15% of the average of the aggregate fair market values of all of Lessor’s 's property that is leased to Lessee under such lease at the beginning and end of such calendar year. (iiB) Lessee cannot sublet the property that is leased to it by Lessor, or enter into any similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in whole or in part, on either (i) the net income or profits derived by the business activities of the sublessee or (ii) any other formula such that any portion of the rent paid by Lessee to Lessor would fail to qualify as "rents from real property" within the meaning of Section 856(d) of the Code.. ----------------------- Lease Agreement (iiiC) Lessee cannot sublease the property leased to it by Lessor to, or enter into any similar arrangement with, any person in which MHI AHT owns, directly or indirectly, a 10% or more interest, within the meaning of Section 856(d)(2)(B) of the Code. (ivD) Lessee agrees to make an election to be, and to operate as a “Taxable "TAXABLE REIT Subsidiary” SUBSIDIARY" of MHI AHT within the meaning of Section 856(l) of the Code. (vE) No person can own, directly or directlyindirectly, capital stock of MHI AHT that exceeds the "LIMIT" (as defined in MHI’s certificate of incorporationAHT's Charter, as amended and restated). (viF) Lessee shall not (i) directly or indirectly operate or manage a “Lodging Facility” "LODGING FACILITY" within the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care Facility” "HEALTH CARE FACILITY" within the meaning of Section 856(e)(6)(D)(ii) or (ii) directly or indirectly provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Lessee may provide such rights to Manager to operate or manage a lodging facility as long as such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its Affiliates. (b) Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to use its best efforts to permit the REIT Requirements to be satisfied. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to cooperate in good faith with MHI and Lessor to ensure that the REIT Requirements are satisfied, including but not limited to, providing MHI with information about the ownership of Lessee, and its Affiliates to the extent that such information is reasonably available. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, upon request by MHI, and, where appropriate, at MHI’s expense, to take reasonable action necessary to ensure compliance with the REIT Requirements. Immediately after becoming aware that the REIT Requirements are not, or will not be, satisfied, Lessee shall notify, or use reasonable efforts to cause its Affiliates to notify, MHI of such noncompliance.

Appears in 1 contract

Samples: Credit Agreement (Ashford Hospitality Trust Inc)

REIT Requirements. (a) Lessee BHR has been advised by FelCor and understands that, in order for MHI FelCor to qualify as a real estate investment trust under the Code ("REIT"), the following requirements (the "REIT Requirements") must be satisfied: (i) The average of the fair market values adjusted tax bases of a Lessor’s 's personal property that is leased to a Lessee under a lease Percentage Lease at the beginning and end of a calendar year cannot exceed fifteen percent (15% %) of the average of the aggregate fair market values adjusted tax bases of all of such Lessor’s 's real and personal property that is leased to such Lessee under such lease Percentage Lease at the beginning and end of such calendar year. (ii) No Lessee cannot can sublet the Hotels and related property that is are leased to it by a Lessor, or enter into any similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in on whole or in part, on either (i) the net income or profits derived by the business activities of the sublessee or (ii) any other formula such that any portion of the Percentage Rent or other rent paid by the Lessee to the Lessor would fail to qualify as "rents from real property" within the meaning of Section 856(d) of the Code. (iii) No Lessee cannot can sublease the Hotels and related property leased to it by a Lessor to, or enter into any similar arrangement with, any person in which MHI FelCor owns, directly or indirectly, a ten percent (10% %) or more greater ownership interest, within the meaning of Section 856(d)(2)(B) of the Code. (iv) Lessee agrees to make an election to beFelCor cannot own, and to operate as directly or indirectly, a “Taxable REIT Subsidiary” of MHI ten percent (10%) or greater ownership interest in BHR or any Lessee, within the meaning of Section 856(l856(d)(2)(B) of the Code. (v) No Unless specifically permitted by the Board of Directors of FelCor, no person can own, directly or directlyindirectly, capital stock of MHI FelCor that exceeds the “LIMIT” (as defined limit set forth in MHI’s certificate of incorporation, as amended and restated). (vi) Lessee shall not (i) directly or indirectly operate or manage a “Lodging Facility” within the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care Facility” within the meaning of Section 856(e)(6)(D)(ii) or (ii) directly or indirectly provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Lessee may provide such rights to Manager to operate or manage a lodging facility as long as such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its AffiliatesFelCor's Charter. (b) Lessee agreesBHR and Lessees agree, and agrees agree to use reasonable efforts to cause its their Affiliates, to use its their reasonable best efforts to permit the REIT Requirements to be satisfied. Lessee agreesBHR and Lessees agree, and agrees agree to use their reasonable best efforts to cause its their Affiliates, to cooperate in good faith with MHI FelCor, FSLP and Lessor Lessors to ensure that the REIT Requirements are satisfied, including but not limited to, providing MHI FelCor with information about the ownership of LesseeBHR, Lessees, and its their Affiliates to the extent that such information is reasonably available. Lessee agrees, and agrees complying with the related obligations of Lessees under each Percentage Lease. BHR and Lessees agree, and agree to use their reasonable best efforts to cause its their Affiliates, upon request by MHI, FelCor (and, where appropriateappropriate action not already required by the terms hereof or of the Percentage Leases is required by this Section 8(b), at MHI’s FelCor's expense), to take reasonable action necessary to ensure compliance with the REIT Requirements. Immediately after becoming aware that the any REIT Requirements are Requirement is not, or will not be, satisfied, Lessee BHR or Lessees shall notify, or use reasonable efforts to cause its their Affiliates to notify, MHI FelCor of such noncompliance.

Appears in 1 contract

Samples: Master Hotel Agreement (Felcor Lodging Trust Inc)

REIT Requirements. (a) Lessee understands acknowledges that, in order for MHI Gadsden to qualify as a REIT, the following requirements (the “REIT RequirementsREQUIREMENTS”) must be satisfied: (i1) The average of the fair market values of Lessor’s personal property that is leased to Lessee under a lease at the beginning and end of a calendar year cannot exceed 15% of the average of the aggregate fair market values of all of Lessor’s property that is leased to Lessee under such lease at the beginning and end of such calendar year. (ii2) Lessee cannot sublet the property that is leased to it by Lessor, or enter into any similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in whole or in part, on either (i) the net income or profits derived by the business activities of the sublessee or (ii) any other formula such that any portion of the rent paid by Lessee to Lessor would fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code. (iii3) Lessee cannot sublease the property leased to it by Lessor toLessor, or enter into any similar arrangement with, any person in which MHI Gadsden owns, directly or indirectly, a 10% or more interest, within the meaning of Section 856(d)(2)(B) of the Code. (iv4) Lessee agrees to make an election to be, and to operate as a “Taxable TAXABLE REIT SubsidiarySUBSIDIARY” of MHI Gadsden within the meaning of Section 856(l) of the Code. (v5) No person can own, directly or directly, capital stock of MHI Gadsden that exceeds the “LIMITCommon Stock Ownership Limit” (as defined in MHIGadsden’s certificate of incorporationCharter, as amended and restated). (vi6) The Leased Property shall be treated as a “qualified lodging facility” within the meaning of Section 856(e)(6)(D) of the Code. (7) Lessee shall not (i) directly or indirectly operate or manage a “Lodging FacilityLODGING FACILITY” within the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care FacilityHEALTH CARE FACILITY” within the meaning of Section 856(e)(6)(D)(ii) of the Code or (ii) directly or indirectly provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Lessee may provide such rights to Manager to operate or manage a lodging facility as long as such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its Affiliates. (8) The Leased Property shall be treated as a “qualified lodging facility” within the meaning of Section 856(e)(6)(D) of the Code. (b) Lessee agrees, and agrees to use its reasonable best efforts to cause its Affiliates, to use its reasonable best efforts to permit the REIT Requirements to be satisfied. Lessee agrees, and agrees to use reasonable best efforts to cause its Affiliates, to cooperate in good faith with MHI Gadsden and Lessor to ensure that the REIT Requirements are satisfied, including but not limited to, providing MHI Gadsden with information about the ownership of Lessee, and its Affiliates to the extent that such information is reasonably available. Lessee agrees, and agrees to use reasonable best efforts to cause its Affiliates, upon request by MHIGadsden, and, where appropriate, at MHIGadsden’s expense, to take reasonable action necessary to ensure compliance with the REIT Requirements. Immediately after becoming aware that the REIT Requirements are not, or will not be, satisfied, Lessee shall notify, or use reasonable efforts to cause its Affiliates to notify, MHI Gadsden of such noncompliance.

Appears in 1 contract

Samples: Lease Agreement (Gadsden Growth Properties, Inc.)

REIT Requirements. (a) Lessee understands that, that in order for MHI Equity Inns to qualify as a REIT, the following requirements (the "REIT Requirements") must be satisfied: (i) The Anything contained in this Lease to the contrary notwithstanding, the average of the fair market values value of Lessor’s 's personal property that is leased to the Lessee under a lease at the beginning and end of a calendar year canFiscal Year shall not exceed 15% of the average of the aggregate fair market values of all of Lessor’s 's property that is leased to Lessee under such Section 19.1 is intended to ensure that the Rent qualifies as "rents from real property," within the meaning of Section 856(d) of the Code, or any similar or successor provisions thereto, and shall be interpreted in a manner consistent with such lease at the beginning and end of such calendar yearintent. (ii) Anything contained in this Lease to the contrary notwithstanding, Lessee canshall not sublet the property that is leased to it by Lessor, or enter into any similar arrangement, Leased Property on any basis such that the rental or other amounts to be paid by the sublessee thereunder would be based, in whole or in part, on either (ia) the net income or profits derived by the business activities of the sublessee sublessee, or (iib) any other formula such that any portion of the rent paid by Lessee to Lessor Rent would fail to qualify as "rents from real property" within the meaning of Section 856(d) of the Code, or any similar or successor provision thereto. (iii) Lessee cannot sublease sublet the property leased Leased Property to it by Lessor to, or enter into any similar arrangement with, any person Person in which MHI Equity Inns, owns, directly or indirectly, a 10% or more interest, within the meaning of Section 856(d)(2)(B) of the Code, or any similar or successor provisions thereto. (iv) Lessee agrees to make an election to be, and to operate as a “Taxable "taxable REIT Subsidiary” subsidiary" of MHI Equity Inns within the meaning of Section 856(l856(e) of the Code, or any similar or successor provision thereto. (v) No person can own, directly or directly, capital stock of MHI that exceeds the “LIMIT” (as defined in MHI’s certificate of incorporation, as amended and restated). (vi) Lessee shall not (i) directly or indirectly operate or manage a “Lodging Facility” "lodging facility" within the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care Facility” "health care facility" within the meaning of Section 856(e)(6)(D)(ii) or (ii) directly or indirectly provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Lessee may provide such rights to Manager to operate or manage a lodging facility as long as such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its Affiliates. (bvi) Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to use its their best efforts to permit the REIT Requirements to be satisfied. Lessee agrees, agrees and agrees to use reasonable efforts to cause its Affiliates, to cooperate in good faith with MHI Equity Inns and Lessor to ensure that the REIT Requirements are satisfied, including but not limited to, providing MHI Equity Inns with information about the ownership of Lessee, and its Affiliates to the extent that such information is reasonably available. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, upon request by MHIEquity Inns, and, where appropriate, at MHI’s Equity Inns' expense, to take reasonable action necessary to ensure compliance with the REIT Requirements. Immediately after becoming aware that the REIT Requirements are not, or will not be, satisfied, Lessee shall notify, or use reasonable efforts to cause its Affiliates to notify, MHI Equity Inns of such noncompliance.

Appears in 1 contract

Samples: Consolidated Lease Agreement (Equity Inns Inc)

REIT Requirements. (a) Lessor has informed Lessee, and Lessee understands understands, that, in order for MHI FelCor to qualify as a REIT, the following requirements (the "REIT Requirements”REQUIREMENTS") must be satisfied: (i) The average of the fair market values adjusted tax bases of Lessor’s 's personal property that is leased to Lessee under a lease this Lease at the beginning and end of a calendar year cannot exceed fifteen percent (15% %) of the average of the aggregate fair market values adjusted tax bases of all of Lessor’s 's property that is leased to Lessee under such lease this Lease at the beginning and end of such calendar yearyear (the "PERSONAL PROPERTY LIMITATION"). (ii) Lessee cannot sublet the property that is leased to it by Lessor, or enter into any similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in whole or in part, on either (i) the net income or profits derived by the business activities of the sublessee or (ii) any other formula such that any portion of the rent paid by Lessee to Lessor would fail to qualify as "rents from real property" within the meaning of Section 856(d) of the Code. (iii) Lessee cannot sublease the property leased to it by Lessor to, or enter into any similar arrangement with, any person Person in which MHI FelCor owns, directly or indirectly, a ten percent (10% %) or more greater interest, within the meaning of Section 856(d)(2)(B) of the Code. (iv) Lessee agrees to make an election to beFelCor (or any Person that owns a ten percent (10%) or greater interest in FelCor) cannot own, and to operate as directly or indirectly, a “Taxable REIT Subsidiary” of MHI ten percent (10%) or greater interest in Lessee, within the meaning of Section 856(l856(d)(2)(B) of the Code. (v) No person Person can own, directly or directly, capital stock of MHI FelCor that exceeds the “LIMIT” (as defined limitations set forth in MHI’s certificate of incorporationFelCor's Charter, as amended and restated). (vi) Lessee shall not (i) directly or indirectly operate or manage a “Lodging Facility” within the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care Facility” within the meaning of Section 856(e)(6)(D)(ii) or (ii) directly or indirectly provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Lessee may provide such rights to Manager to operate or manage a lodging facility as long as such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its Affiliates. (b) Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to use its their reasonable best efforts to permit the REIT Requirements to be satisfied. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to cooperate in good faith with MHI FelCor and Lessor to ensure that the REIT Requirements are satisfied, including but not limited to, providing MHI FelCor with information about the ownership of Lessee, and its Affiliates to the extent that such information is reasonably available. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, upon request by MHI, FelCor and, where appropriate, at MHI’s FelCor's expense, to take reasonable takereasonable action necessary to ensure compliance with the REIT -73- 82 Requirements. Immediately after becoming aware that the REIT Requirements are not, or will not be, satisfied, Lessee shall notify, or use reasonable efforts to cause its Affiliates to notify, MHI FelCor of such noncompliance. (c) If Lessor reasonably anticipates that the Personal Property Limitation will be exceeded with respect to the Leased Property for any Lease Year, Lessor shall notify Lessee, and Lessee shall purchase, either from Lessor or a third party, items of personal property anticipated by Lessor to be in excess of the Personal Property Limitation ("EXCESS PERSONAL PROPERTY ITEMS") on such terms as may be negotiated in good faith between Lessor and Lessee. If the Excess Personal Property Items are purchased from Lessor, the purchase prices of such Excess Personal Property Items shall be equal to the adjusted tax bases of such Excess Personal Property Items in the hands of Lessor as of the closing of the purchase.

Appears in 1 contract

Samples: Lease Agreement (Felcor Lodging Trust Inc)

REIT Requirements. (a) Lessee understands that, in order for MHI AHT to qualify as a REIT, the following requirements (the "REIT Requirements”REQUIREMENTS") must be satisfied: (iA) The average of the fair market values of Lessor’s 's personal property that is leased to Lessee under a lease at the beginning and end of a calendar year cannot exceed 15% of the average of the aggregate fair market values of all of Lessor’s 's property that is leased to Lessee under such lease at the beginning and end of such calendar year. (iiB) Lessee cannot sublet the property that is leased to it by Lessor, or enter into any similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in whole or in part, on either (i) the net income or profits derived by Lease Agreement Ashford TRS Corporation the business activities of the sublessee or (ii) any other formula such that any portion of the rent paid by Lessee to Lessor would fail to qualify as "rents from real property" within the meaning of Section 856(d) of the Code. (iiiC) Lessee cannot sublease the property leased to it by Lessor to, or enter into any similar arrangement with, any person in which MHI AHT owns, directly or indirectly, a 10% or more interest, within the meaning of Section 856(d)(2)(B) of the Code. (ivD) Lessee agrees to make an election to be, and to operate as a “Taxable "TAXABLE REIT Subsidiary” SUBSIDIARY" of MHI AHT within the meaning of Section 856(l) of the Code. (vE) No person can own, directly or directly, capital stock of MHI AHT that exceeds the "LIMIT" (as defined in MHI’s certificate of incorporationAHT's Charter, as amended and restated). (viF) Lessee shall not (i) directly or indirectly operate or manage a “Lodging Facility” "LODGING FACILITY" within the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care Facility” "HEALTH CARE FACILITY" within the meaning of Section 856(e)(6)(D)(ii) or (ii) directly or indirectly provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Lessee may provide such rights to Manager to operate or manage a lodging facility as long as such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its Affiliates. (b) Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to use its best efforts to permit the REIT Requirements to be satisfied. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to cooperate in good faith with MHI AHT and Lessor to ensure that the REIT Requirements are satisfied, including but not limited to, providing MHI AHT with information about the ownership of Lessee, and its Affiliates to the extent that such information is reasonably available. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, upon request by MHIAHT, and, where appropriate, at MHI’s AHT's expense, to take reasonable action necessary to ensure compliance with the REIT Requirements. Immediately after becoming aware that the REIT Requirements are not, or will not be, satisfied, Lessee shall notify, or use reasonable efforts to cause its Affiliates to notify, MHI AHT of such noncompliance.

Appears in 1 contract

Samples: Lease Agreement (Ashford Hospitality Trust Inc)

REIT Requirements. (a) a. Tree, the Lessee understands and the Additional Lessee understand that, in order for MHI RFSI to qualify as a REIT, the following requirements (the "REIT Requirements") must be satisfied: (i) The average of the fair market values adjusted tax bases of the Lessor’s 's or the Additional Lessor's personal property that is leased to the Lessee or the Additional Lessee under a lease at the beginning and end of a calendar year cannot exceed 15% of the average of the aggregate fair market values adjusted tax bases of all of the Lessor’s 's or the Additional Lessor's property that is leased to the Lessee or the Additional Lessee under such lease at the beginning and end of such calendar year. (ii) Neither the Lessee cannot nor the Additional Lessee can sublet the property that is leased to it by the Lessor or the Additional Lessor, or enter into any similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in whole or in part, on either (i) the net income or profits derived by the business activities of the sublessee or (ii) any other formula such that any portion of the rent paid by the Lessee or the Additional Lessee to the Lessor or the Additional Lessor would fail to qualify as "rents from real property" within the meaning of Section 856(d) of the Code. (iii) Neither the Lessee cannot nor the Additional Lessee can sublease the property leased to it by the Lessor or the Additional Lessor to, or enter into any similar arrangement with, any person in which MHI RFSI owns, directly or indirectly, a 10% or more interest, within the meaning of Section 856(d)(2)(B) of the Code. (iv) RFSI cannot own, directly or indirectly, a 10% or more interest in the Lessee agrees to make an election to beor the Additional Lessee, and to operate as a “Taxable REIT Subsidiary” of MHI within the meaning of Section 856(l856(d)(2)(B) of the Code. (v) No person can own, directly or directly, capital stock of MHI RFSI that exceeds the “LIMIT” "Limit" (as defined in MHI’s certificate of incorporationRFSI's Charter, as amended and restated). (vi) b. Tree, the Lessee shall not (i) directly or indirectly operate or manage a “Lodging Facility” within and the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care Facility” within the meaning of Section 856(e)(6)(D)(ii) or (ii) directly or indirectly provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Additional Lessee may provide such rights to Manager to operate or manage a lodging facility as long as such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its Affiliates. (b) Lessee agreesagree, and agrees agree to use reasonable efforts to cause its their Affiliates, to use its their best efforts to permit the REIT Requirements to be satisfied. Tree, the Lessee agreesand the Additional Lessee agree, and agrees agree to use reasonable efforts to cause its their Affiliates, to cooperate in good faith with MHI RFSI, the Lessor and the Additional Lessor to ensure that the REIT Requirements are satisfied, including but not limited to, providing MHI RFSI with information about the ownership of Tree, the Lessee, the Additional Lessee and its their Affiliates to the extent that such information is reasonably available. Tree, the Lessee agreesand the Additional Lessee agree, and agrees agree to use reasonable efforts to cause its their Affiliates, upon request by MHIRFSI, and, where appropriate, at MHI’s RFSI's expense, to take reasonable action necessary to ensure compliance with the REIT Requirements. Immediately after becoming aware that the REIT Requirements are not, or will not be, satisfied, Tree, the Lessee or the Additional Lessee shall notify, or use reasonable efforts to cause its their Affiliates to notify, MHI RFSI of such noncompliance.

Appears in 1 contract

Samples: Master Agreement (RFS Hotel Investors Inc)

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REIT Requirements. (a) Lessee BHR has been advised by FelCor and understands that, in order for MHI FelCor to qualify as a real estate investment trust under the Code ("REIT"), the following requirements (the "REIT Requirements") must be satisfied: (i) The average of the fair market values adjusted tax bases of Lessor’s 's personal property that is leased to Lessee under a lease Percentage Lease at the beginning and end of a calendar year cannot exceed fifteen percent (15% %) of the average of the aggregate fair market values of all adjusted tax bases of Lessor’s 's real and personal property that is leased to Lessee under such lease Percentage Lease at the beginning and end of such calendar year. (ii) Lessee cannot sublet the Hotels and related property that is leased to it by Lessor, or enter into any similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in on whole or in part, on either (i) the net income or profits derived by the business activities of the sublessee or (ii) any other formula such that any portion of the Percentage Rent or other rent paid by Lessee to Lessor would fail to qualify as "rents from real property" within the meaning of Section 856(d) of the Code. (iii) Lessee cannot sublease the Hotels and related property leased to it by Lessor to, or enter into any similar arrangement with, any person in which MHI FelCor owns, directly or indirectly, a ten percent (10% %) or more greater ownership interest, within the meaning of Section 856(d)(2)(B) of the Code. (iv) Lessee agrees to make an election to beFelCor cannot own, and to operate as directly or indirectly, a “Taxable REIT Subsidiary” of MHI ten percent (10%) or greater ownership interest in BHR or Lessee, within the meaning of Section 856(l856(d)(2)(B) of the Code. (v) No Unless specifically permitted by the Board of Directors of FelCor, no person can own, directly or directlyindirectly, capital stock of MHI FelCor that exceeds the “LIMIT” (as defined limit set forth in MHI’s certificate of incorporation, as amended and restated). (vi) Lessee shall not (i) directly or indirectly operate or manage a “Lodging Facility” within the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care Facility” within the meaning of Section 856(e)(6)(D)(ii) or (ii) directly or indirectly provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Lessee may provide such rights to Manager to operate or manage a lodging facility as long as such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its AffiliatesFelCor's Charter. (b) Lessee agreesBHR and Lessees agree, and agrees agree to use reasonable efforts to cause its their Affiliates, to use its their reasonable best efforts to permit the REIT Requirements to be satisfied. Lessee agreesBHR and Lessees agree, and agrees agree to use their reasonable best efforts to cause its their Affiliates, to cooperate in good faith with MHI FelCor, FSLP and Lessor Lessors to ensure that the REIT Requirements are satisfied, including but not limited to, providing MHI FelCor with information about the ownership of LesseeBHR, Lessees, and its their Affiliates to the extent that such information is reasonably available. Lessee agrees, and agrees complying with the related obligations of Lessees under each Percentage Lease. BHR and Lessees agree, and agree to use their reasonable best efforts to cause its their Affiliates, upon request by MHI, and, where appropriate, at MHI’s expense, to take reasonable action necessary to ensure compliance with the REIT Requirements. Immediately after becoming aware that the REIT Requirements are not, or will not be, satisfied, Lessee shall notify, or use reasonable efforts to cause its Affiliates to notify, MHI of such noncompliance.FelCor

Appears in 1 contract

Samples: Master Hotel Agreement (Felcor Suite Hotels Inc)

REIT Requirements. (a) Lessee understands that, in order for MHI RFS to qualify as a REIT, the following requirements (the "REIT Requirements") must be satisfied: (i) The average of the fair market values of Lessor’s 's personal property that is leased to Lessee under a lease at the beginning and end of a calendar year cannot exceed 15% of the average of the aggregate fair market values of all of Lessor’s 's property that is leased to Lessee under such lease at the beginning and end of such calendar year. (ii) Lessee cannot sublet the property that is leased to it by Lessor, or enter into any similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in whole or in part, on either (i) the net income or profits derived by the business activities of the sublessee or (ii) any other formula such that any portion of the rent paid by Lessee to Lessor would fail to qualify as "rents from real property" within the meaning of Section 856(d) of the Code. (iii) Lessee cannot sublease the property leased to it by Lessor to, or enter into any similar arrangement with, any person in which MHI RFS owns, directly or indirectly, a 10% or more interest, within the meaning of Section 856(d)(2)(B) of the Code. (iv) Lessee agrees to make an election to be, and to operate as a “Taxable "taxable REIT Subsidiary” subsidiary" of MHI RFS within the meaning of Section 856(l856(e) of the Code. (v) No person can own, directly or directly, capital stock of MHI RFS that exceeds the “LIMIT” "Limit" (as defined in MHI’s certificate of incorporationRFS' Charter, as amended and restated). (vi) Lessee shall not (i) directly or indirectly operate or manage a “Lodging Facility” "lodging facility" within the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care Facility” "health care facility" within the meaning of Section 856(e)(6)(D)(ii) or (ii) directly or indirectly provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Lessee may provide such rights to Manager to operate or manage a lodging facility as long as such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its Affiliates. (b) Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to use its best efforts to permit the REIT Requirements to be satisfied. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to cooperate in good faith with MHI RFS and Lessor to ensure that the REIT Requirements are satisfied, including but not limited to, providing MHI RFS with information about the ownership of Lessee, and its Affiliates to the extent that such information is reasonably available. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, upon request by MHIRFS, and, where appropriate, at MHI’s expense, to take reasonable action necessary to ensure compliance with the REIT Requirements. Immediately after becoming aware that the REIT Requirements are not, or will not be, satisfied, Lessee shall notify, or use reasonable efforts to cause its Affiliates to notify, MHI of such noncompliance.where

Appears in 1 contract

Samples: Master Lease Agreement (RFS Hotel Investors Inc)

REIT Requirements. (a) Lessor has informed Lessee, and Lessee understands understands, that, in order for MHI FelCor to qualify as a REIT, the following requirements (the "REIT Requirements”REQUIREMENTS") must be satisfied: (i) The average of the fair market values adjusted tax bases of Lessor’s 's personal property that is leased to Lessee under a lease this Lease at the beginning and end of a calendar year cannot exceed fifteen percent (15% %) of the average of the aggregate fair market values adjusted tax bases of all of Lessor’s 's property that is leased to Lessee under such lease this Lease at the beginning and end of such calendar yearyear (the "PERSONAL PROPERTY LIMITATION"). (ii) Lessee cannot sublet the property that is leased to it by Lessor, or enter into any similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in whole or in part, on either (i) the net income or profits derived by the business activities of the sublessee or (ii) any other formula such that any portion of the rent paid by Lessee to Lessor would fail to qualify as "rents from real property" within the meaning of Section 856(d) of the Code. (iii) Lessee cannot sublease the property leased to it by Lessor to, or enter into any similar arrangement with, any person Person in which MHI FelCor owns, directly or indirectly, a ten percent (10% %) or more greater interest, within the meaning of Section 856(d)(2)(B) of the Code. (iv) Lessee agrees to make an election to beFelCor (or any Person that owns a ten percent (10%) or greater interest in FelCor) cannot own, and to operate as directly or indirectly, a “Taxable REIT Subsidiary” of MHI ten percent (10%) or greater interest in Lessee, within the meaning of Section 856(l856(d)(2)(B) of the Code. (v) No person Person can own, directly or directly, capital stock of MHI FelCor that exceeds the “LIMIT” (as defined limitations set forth in MHI’s certificate of incorporationFelCor's Charter, as amended and restated). (vi) Lessee shall not (i) directly or indirectly operate or manage a “Lodging Facility” within the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care Facility” within the meaning of Section 856(e)(6)(D)(ii) or (ii) directly or indirectly provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Lessee may provide such rights to Manager to operate or manage a lodging facility as long as such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its Affiliates. (b) Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to use its their reasonable best efforts to permit the REIT Requirements to be satisfied. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to cooperate in good faith with MHI FelCor and Lessor to ensure that the REIT Requirements are satisfied, including but not limited to, providing MHI FelCor with information about the ownership of Lessee, and its Affiliates to the extent that such information is reasonably available. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, upon request by MHI, FelCor and, where appropriate, at MHI’s FelCor's expense, to take reasonable action necessary to ensure compliance with the REIT Requirements. Immediately after becoming aware that the REIT Requirements are not, or will not be, satisfied, Lessee shall notify, or use reasonable efforts to cause its Affiliates to notify, MHI FelCor of such noncompliance. (c) If Lessor reasonably anticipates that the Personal Property Limitation will be exceeded with respect to the Leased Property for any Lease Year, Lessor shall notify Lessee, and Lessee shall purchase, either from Lessor or a third party, items of personal property anticipated by Lessor to be in excess of the Personal Property Limitation ("EXCESS PERSONAL PROPERTY ITEMS") on such terms as may be negotiated in good faith between Lessor and Lessee. If the Excess Personal Property Items are purchased from Lessor, the purchase prices of such Excess Personal Property Items shall be equal to the adjusted tax bases of such Excess Personal Property Items in the hands of Lessor as of the closing of the purchase.

Appears in 1 contract

Samples: Lease Agreement (Bristol Hotels & Resorts Inc)

REIT Requirements. 18.1 REIT REQUIREMENTS. (a) Lessee understands that, in order for MHI CAPITAL LODGING to qualify as a REIT, the following requirements (the “REIT RequirementsREQUIREMENTS”) must be satisfied: (i1) The average of the fair market values of Lessor’s personal property that is leased to Lessee under a lease at the beginning and end of a calendar year canmay not exceed 15% of the average of the aggregate fair market values of all of Lessor’s property that is leased to Lessee under such lease at the beginning and end of such calendar year. (ii2) Lessee canmay not sublet the property that is leased to it by Lessor, or enter into any similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in whole or in part, on either (i) the net income or profits derived by the business activities of the sublessee or (ii) any other formula such that any portion of the rent paid by Lessee to Lessor would fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code. (iii3) Lessee canmay not sublease the property leased to it by Lessor to, or enter into any similar arrangement with, any person Person in which MHI CAPITAL LODGING owns, directly or indirectly, a 10% or more interest, within the meaning of Section 856(d)(2)(B856 (d) (2) (B) of the Code. (iv4) Lessee agrees to and CAPITAL LODGING shall make an election to be, and to operate as a “Taxable REIT Subsidiary” of MHI CAPITAL LODGING within the meaning of Section 856(l856(1) of the Code. (v5) No person can Except as otherwise provided in the CAPITAL LODGING Articles of Amendment and Restatement, dated _____, 2004, as amended (the “CAPITAL LODGING CHARTER”), no Person may own, directly or directlyindirectly (within the meaning of Section 856(d)(5) of the Code), capital stock of MHI CAPITAL LODGING that exceeds the “LIMIT” Aggregate Share Ownership Limit or the Common Share Ownership Limit (as such terms are defined in MHI’s certificate of incorporation, as amended and restatedthe CAPITAL LODGING Charter). (vi6) Lessee shall not (i) directly or indirectly operate or manage a “Lodging Facility” within the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care Facility” within the meaning of Section 856(e)(6)(D)(ii) or (ii) directly or indirectly provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Lessee may provide such rights to Manager to operate or manage a lodging facility as long as such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its Affiliates. (b) Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to use its best efforts to permit the REIT Requirements to be satisfied. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to cooperate in good faith with MHI CAPITAL LODGING and Lessor to ensure that the REIT Requirements are satisfied, including but not limited to, providing MHI CAPITAL LODGING with information about the ownership of Lessee, and its Affiliates to the extent that such information is reasonably available. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, upon request by MHICAPITAL LODGING, and, where appropriate, at MHICAPITAL LODGING’s expense, to take reasonable action necessary to ensure compliance with the REIT Requirements. Immediately after becoming aware that the REIT Requirements are not, or will not be, satisfied, Lessee shall notify, or use reasonable efforts to cause its Affiliates to notify, MHI CAPITAL LODGING of such noncompliance.

Appears in 1 contract

Samples: Lease Agreement (Capital Lodging)

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