Common use of Section 1031 Exchanges Clause in Contracts

Section 1031 Exchanges. In order to facilitate Borrower’s transactions pursuant to Section 1031 of the Code, the Administrative Agent shall from time to time, on behalf of the Banks, accept a pledge of membership interests in a limited liability company 100% owned directly or indirectly by the Borrower as security for a specified amount of the outstanding indebtedness (the “secured indebtedness”), which limited liability company owns property which Borrower desires to sell in connection with a like-kind exchange intended to qualify for treatment under Section 1031 of the Code. Such pledge shall be substantially in the form of the pledge agreement attached hereto as Exhibit J. Administrative Agent acknowledges that the Borrower may assign said membership interests to a qualified intermediary and that, upon such assignment, the qualified intermediary will agree to accept responsibility for repayment of, and is expected to repay, the secured indebtedness as part of such exchange. Each pledge shall be released automatically (i) upon the sale of such membership interests or underlying property in the exchange (other than transfer to a qualified intermediary) and repayment of the secured indebtedness, or (ii) upon any prepayment of the Loans in an amount equal to or greater than the secured indebtedness secured by such pledge and which Borrower has designated as a prepayment of such indebtedness. The Administrative Agent agrees to accept repayment of the secured indebtedness from the proceeds of such sale. The Borrower and EQR shall remain obligated for all Obligations notwithstanding the pledge. Upon receipt from the Internal Revenue Service, the Borrower shall deliver to Administrative Agent a copy of a private letter ruling from the Internal Revenue Service to the Borrower with respect to a proposed Section 1031 exchange employing the proposed structure, it being understood that the Administrative Agent shall not disclose the same (subject to Section 9.15) unless and until the same shall be published or otherwise made generally available by the Internal Revenue Service. Notwithstanding anything contained herein to the contrary, any party hereto (and any of its employees, representatives and other agents) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of this transaction.

Section 1031 Exchanges. In order Notwithstanding anything to facilitate Borrower’s transactions pursuant the contrary in this Agreement, each Affiliate Seller may transfer its rights or obligations under this Agreement to a party acting as “Qualified Intermediary”, as defined in Section 1031 1031(k)-1(g)(4) of the Code, the Administrative Agent shall from time to time, on behalf of the Banks, accept a pledge of membership interests in a limited liability company 100% owned directly or indirectly by the Borrower as security for a specified amount of the outstanding indebtedness Federal Income Tax Regulations (the “secured indebtednessIntermediary”), provided that: (i) notwithstanding such assignment, in any event Buyer may proceed directly against the Affiliate Seller to enforce Buyer’s rights under this Agreement, to the extent permitted under this Agreement, without the need to join the Intermediary as a party; (ii) notwithstanding any such assignment the Transferred Real Property shall be conveyed directly by the Affiliate Seller to the Real Property Purchaser as provided in this Agreement; (iii) Buyer’s performance of any of its obligations to or in favor of the Intermediary shall be treated as performance to or in favor of the Affiliate Seller; (iv) Affiliate Seller shall provide a copy of the instrument by which limited liability company owns property which Borrower desires any such assignment to sell the Intermediary is made to Buyer immediately after its execution; and (v) neither Buyer nor Real Property Purchaser shall be a party to such assignment to the Intermediary. In the event either Affiliate Seller so assigns its rights or obligations under this Agreement to the Intermediary, Buyer shall or shall cause Real Property Purchaser to (a) render performance of all of Buyer’s obligations under this Agreement to the Intermediary, (b) deposit the purchase price for the applicable Transferred Real Property in connection accordance with the instructions of the Intermediary, and (c) allow the Affiliate Seller to proceed directly against Buyer without the need to join the Intermediary as a like-kind exchange intended party to an action against Buyer in the event Buyer breaches any of its obligations under this Agreement. The purpose of an assignment permitted by the Affiliate Sellers pursuant to this Section is solely to allow the Affiliate Seller to qualify the transfer of the Transferred Real Property for treatment under the benefits of Section 1031 of the Code. Such pledge Qualification for Section 1031 treatment is solely the responsibility of the Affiliate Sellers, and neither Buyer nor the Real Property Purchaser shall be substantially in the form of the pledge agreement attached hereto as Exhibit J. Administrative Agent acknowledges that the Borrower may assign said membership interests to a qualified intermediary and that, upon responsible for such assignment, the qualified intermediary will agree to accept responsibility for repayment of, and is expected to repay, the secured indebtedness as part of such exchange. Each pledge shall be released automatically (i) upon the sale of such membership interests or underlying property in the exchange (other than transfer to a qualified intermediary) and repayment of the secured indebtedness, or (ii) upon any prepayment of the Loans in an amount equal to or greater than the secured indebtedness secured by such pledge and which Borrower has designated as a prepayment of such indebtedness. The Administrative Agent agrees to accept repayment of the secured indebtedness from the proceeds of such sale. The Borrower and EQR shall remain obligated for all Obligations notwithstanding the pledge. Upon receipt from the Internal Revenue Service, the Borrower shall deliver to Administrative Agent a copy of a private letter ruling from the Internal Revenue Service to the Borrower with respect to a proposed Section 1031 exchange employing the proposed structure, it being understood that the Administrative Agent shall not disclose the same (subject to Section 9.15) unless and until the same shall be published or otherwise made generally available by the Internal Revenue Service. Notwithstanding anything contained herein to the contrary, any party hereto (and any of its employees, representatives and other agents) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of this transactionqualification.