REIT Conversion Clause Samples

REIT Conversion. The Company has advised the Lenders that the Company is contemplating a transaction whereby the Company may become controlled by an entity which will elect to become taxable as a REIT for federal income tax purposes. The Lenders acknowledge that the Company may elect to pursue such a transaction and that such transaction may require amendments to the provisions contained herein relating to mergers or other business combinations and relating to the payment of dividends by the Company or the Subsidiaries. To the extent that any such contemplated transaction requires such amendments, the Lenders shall not unreasonably withhold or condition their consent to such amendments and shall not impose any fee for reviewing and approving any proposed REIT conversion requiring only such amendments, although the Company acknowledges that it will pay the Lenders' costs and expenses, including attorneys fees and costs, in reviewing any such proposed transaction. Notwithstanding the foregoing paragraph, it is understood by the parties hereto that the Company has not made any request related to any particular transaction, or otherwise related to the foregoing, to the Lenders or submitted any plan or proposal with respect thereto to the Lenders. This Article shall not constitute the consent of the Lenders to such a contemplated transaction, nor the approval of such a transaction or the Lenders' agreement to modify, amend or waive any provision hereof or any other Loan Document.

REIT Conversion. The Managing Member shall be permitted to cause the Company to elect to be treated as a REIT effective as of such time as determined by the Managing Member in its sole discretion (a “REIT Conversion”), and upon such REIT Conversion, the Managing Member and the Officers shall have full discretion to operate the business and activities of the Company so as to comply with the REIT rules, as determined in their sole discretion. All provisions of this Agreement are to be construed so as to preserve the Company’s ability to effect a REIT Conversion and, following such REIT Conversion, qualify as a REIT. The Managing Member shall be permitted, without the consent of any Member, to amend and restate this Agreement so as to substantially conform with the terms of Exhibit B (the “REIT Agreement”). The Managing Member is hereby authorized to file any necessary elections and shall be required to file any necessary tax returns on behalf of the Company with any tax authorities and the Members shall cooperate in good faith and execute all documents reasonably requested by the Managing Member in connection with a REIT Conversion. In connection with a REIT Conversion, any conversion of outstanding Profits Interests into CARET Units shall be subject to the limitations described in Section 4.3(c)(v), and, unless otherwise determined by the Managing Member, to the extent such limitation applies to any outstanding Profits Interests, such Profits Interests shall be cancelled for no consideration.

REIT Conversion. The Administrative Agent shall have received evidence, in form and substance satisfactory to the Administrative Agent (which shall include receipt of a copy of a legal opinion from the Borrowers’ special REIT counsel as to REIT status), that the Borrowers shall have consummated, or concurrently with the Effective Date are consummating, the REIT Conversion.

REIT Conversion. The Company shall continue its dialog with the Internal Revenue Service to seek one or more private letter rulings regarding its potential future conversion to a real estate investment trust for federal income tax purposes (the “Potential REIT Conversion”); provided, however, that the Company (and its Affiliates and representatives) shall not (a) submit any written communication to the Internal Revenue Service under penalties of perjury, (b) make any binding tax election, or (c) adopt any board resolution, in each case regarding the Potential REIT Conversion without the consent of Parent (which, in the case of clause (a) shall not be unreasonably withheld or delayed). The Parties agree that it shall be reasonable for Parent to withhold consent with respect to the submission of any communication to Internal Revenue Service regarding the Potential REIT Conversion that could reasonably be expected to have a material adverse impact on Parent’s determination that the Company is not a “United States real property holding corporation” within the meaning of Section 897 of the Code.

REIT Conversion. The Company has advised the Lenders that the Company is contemplating a transaction whereby the Company may become controlled by an entity which will elect to become taxable as a REIT for federal income tax purposes. The Lenders acknowledge that the Company may elect to pursue such a transaction and that such transaction may require amendments to the provisions contained herein relating to mergers or other business combinations and relating to the payment of dividends by the Company or the Subsidiaries. To the extent that any such contemplated transaction requires such amendments, the Lenders shall not unreasonably withhold or condition their consent to such amendments and shall not impose any fee for reviewing and/or approving any proposed REIT conversion requiring only such amendments, although the Company acknowledges that it will pay the Lenders' costs and expenses, including attorneys fees and costs, in reviewing any such proposed transaction.