Common use of Specified Transactions Clause in Contracts

Specified Transactions. (a) Subject to the terms of this Section 2.7, the Park Parties shall have the option, upon reasonable notice to the Company, to require that the Company shall (and shall cause the Company Subsidiaries and their respective officers, employees, members, partners, managers and trustees to) use reasonable best efforts to take the following actions as the Park Parties shall reasonably request: (i) convert or cause the conversion of one or more Company Subsidiaries that are organized in a particular state to be domiciled in a different state, or convert or cause the conversion of one or more Company Subsidiaries that are organized as corporations into limited liability companies (or other entities) and one or more Company Subsidiaries that are organized as limited partnerships or limited liability companies into other entities or merge or cause the merger of one or more Company Subsidiaries with or into one or more other Company Subsidiaries; (ii) sell or cause to be sold one or more Company Properties (or one or more Company Subsidiaries that own Company Properties) identified by the Park Parties to one or more Park Parties in one or more sales structured as the acquisition of replacement property as part of a tax-deferred exchange pursuant to Section 1031 of the Code (and cause the net cash proceeds of any such sale to be transferred to the Exchange Agent to fund a portion of the Cash Consideration); provided, that such tax deferred exchange shall be facilitated through a Qualified Intermediary (as such term is defined in the Code) reasonably acceptable to the Company; (iii) form a wholly-owned Subsidiary of the Company solely to serve as an additional limited partner of the Company OP; (iv) cause appropriate tax elections (including but not limited to, for example, IRS Form 8832, Entity Classification Election and IRS Form 8875, Taxable REIT Subsidiary Election) to be made by the Company or one or more Company Subsidiaries; (v) cause a distribution or contribution of assets, or issuance of equity interests, by one or more Company Subsidiaries to the Company or one or more Company Subsidiaries; (vi) cause the winding-up, liquidation, dissolution or termination of one or more Company Subsidiaries; and (vii) cause the liquidation of RP Holdings Trust, a Maryland statutory trust, and CHSP DC Holding Trust, a Maryland real estate investment trust (the “Company Subsidiary REITs”) in such a manner as to permit each of them to continue to qualify as a REIT for their respective taxable years that will end on the effective date of liquidation under Code Section 332 (such date, the “Company Subsidiary REIT Liquidation Date”) and require each such Company Subsidiary REIT to undertake all steps to complete the liquidation of such Company Subsidiary REIT, including redeeming the preferred shareholders of each such Company Subsidiary REIT and filing appropriate tax elections (each such liquidation, a “Company Subsidiary REIT Liquidation Transaction”). (b) Subject to the terms of this Section 2.7, the Park Parties shall be permitted to undertake a marketing and sales process (x) with respect to the New York Disposition Properties, in order to permit the disposition of the New York Disposition Properties on the day before the Closing Date or on the Closing Date prior to the Effective Time on terms and conditions determined by the Park Parties (which may, at the option of the Park Parties, also include a repayment or defeasance of the applicable Indebtedness encumbering the New York Disposition Properties) and (y) with respect to the Other Disposition Properties (the New York Disposition Properties and the Other Disposition Properties, collectively, the “Disposition Properties”), in order to permit the disposition of the Other Disposition Properties following the Closing Date. Subject to the terms of this Section 2.7, the Company shall in good faith (and shall cause the Company Subsidiaries and their respective officers, employees, members, partners, managers and trustees to) provide the Park Parties with all cooperation reasonably requested by the Park Parties that is necessary or reasonably required in connection with such marketing and sales process, including the following: (i) furnishing to the Park Parties promptly following the Park Parties’ request with any information and materials customarily provided in the marketing and sale of similar properties; (ii) entering into customary non-disclosure agreements with prospective purchasers of the Disposition Properties; (iii) subject to entry into a customary non-disclosure agreement as provided in clause (ii), providing prospective purchasers with reasonable access to the Disposition Properties and to customary due diligence information with respect thereto, on terms consistent with Section 7.5(a); (iv) assisting the Park Parties in the preparation of customary marketing materials; (v) cooperating with the Park Parties to identify and pursue any notifications, authorizations, approvals or consents required with respect to the New York Disposition Properties; (vi) entering into definitive sale agreements with respect to the New York Disposition Properties; and (vii) facilitating the repayment or defeasance of any Indebtedness of the Company or any Company Subsidiary in connection with any disposition of the New York Disposition Properties. The matters described in this Section 2.7(b) are referred to herein as the “Disposition Property Assistance Efforts” and all of the transactions and all of the actions contemplated by Section 2.7(a) and Section 2.7(b) are collectively referred to as “Specified Transactions”. (c) Notwithstanding anything to the contrary in this Section 2.7, (i) none of the Company or any Company Subsidiary shall be required to take any action in connection with the Specified Transactions in contravention of any Laws, its Organizational Documents or any material Contract to which the Company, the applicable Company Subsidiary or any of their respective assets are bound (provided that the Company shall provide the Park Parties with all cooperation and assistance reasonably requested by the Park Parties to obtain any necessary consents or waivers necessary to permit the taking of such actions consistent with the terms of such Laws, Organizational Documents or Contracts), (ii) the consummation of any such Specified Transactions shall be contingent upon (x) all conditions to Closing pursuant to Section 8.1 and Section 8.3 having been satisfied (other than delivery of the certificate specified in Section 8.3(d) and the opinion specified in Section 8.3(e), provided that executed copies of such certificate and opinion shall have been delivered into escrow with the Company with release authorized for the Closing Date), (y) the receipt by the Company of a written notice from Park (A) confirming that all of the conditions to the Park Parties’ obligations to consummate the Merger set forth in Section 8.1 and Section 8.2 (other than the delivery by the Company at Closing of the certificate specified in Section 8.2(d) and the opinion specified in Section 8.2(e)) have been satisfied (or, at the option of Park, waived), and that the Park Parties are prepared to proceed with the Closing at the Effective Time, (B) irrevocably waiving any right to claim that the conditions to the Park Parties’ obligations to consummate the Merger set forth in Section 8.1 and Section 8.2 have not been satisfied (other than the delivery by the Company at Closing of the certificate specified in Section 8.2(d) and the opinion specified in Section 8.2(e), provided that if the Company delivers executed copies of such certificate and opinion into escrow with the Park Parties with release authorized for the Closing Date, the delivery obligation in such Section 8.2(d) and Section 8.2(e) shall be deemed to have been satisfied) and (C) providing other evidence reasonably requested by the Company evidencing that the Merger will occur no later than the day following the date on which the earliest consummation of a Specified Transaction occurs, (iii) the Specified Transactions and Disposition Property Assistance Efforts (or the inability to complete the Specified Transactions or Disposition Property Assistance Efforts despite the Company’s good faith efforts to comply with this Section 2.7), shall not delay, affect or modify in any respect the obligations of the Park Parties under this Agreement (including the obligation to complete the Merger and the payment of the Merger Consideration), (iv) the Specified Transactions shall be implemented on the day before the Closing Date or on the Closing Date prior to the Effective Time, as requested by Park (it being understood that in any event the Specified Transactions will be deemed to have occurred prior to the Closing), (v) none of the Company or any Company Subsidiary shall be required to take any such action that could adversely affect the classification of the Company as a REIT prior to the Effective Time or could subject the Company to any “prohibited transactions” Taxes or other Taxes under Code Sections 857(b), 860(c) or 4981 (or other entity-level Taxes), and (vi) none of the Company or any Company Subsidiary shall be required to take any such action in connection with a Specified Transaction or Disposition Property Assistance Efforts that would reasonably be expected to result in an amount of Taxes being imposed on, or any adverse Tax consequences to, any shareholder or other equity interest holder of the Company (in such person’s capacity as a shareholder or other equity interest holder of the Company), or other material adverse consequences to the shareholders or other equity interest holders of the Company as a whole, that are incrementally greater or more adverse, as the case may be, than the Taxes or other adverse consequences to such party in connection with the consummation of this Agreement in the absence of such action taken pursuant to this Section 2.7. (d) Subject to the terms of this Section 2.7, unless otherwise mutually agreed by the Park Parties and the Company in writing, the Specified Transactions and Disposition Property Assistance Efforts shall be undertaken in the manner (including in the order) specified by the Park Parties. The Company shall use its reasonable best efforts to cooperate with the Park Parties in connection with any Specified Transaction and Disposition Property Assistance Efforts. Notwithstanding anything to the contrary in this Section 2.7, none of the Company, any Company Subsidiary or any of their respective Representatives shall, in connection with the matters addressed in this Section 2.7, be required to: (A) enter into any Contract, or make any undertaking, that would not by its terms terminate upon a termination of this Agreement, with no continuing obligation or liability for the Company or any Company Subsidiary; (B) consent to, or enter into any Contract providing for, the consummation of any sale or other disposition of any Other Disposition Property prior to the Closing Date; or (C) pay any fee or incur any liability, other than reasonable out-pocket-expenses that are advanced or promptly reimbursed by the Park Parties in accordance with Section 2.7(e). (e) The Company shall not be deemed to have entered into or agreed to enter an Acquisition Agreement as a result of providing any cooperation or taking any actions in connection with the Specified Transactions or Disposition Property Assistance Efforts. The Park Parties shall, upon request by the Company, advance to the Company all reasonable out-of-pocket costs to be incurred by the Company and the Company Subsidiaries or, promptly upon request by the Company, reimburse the Company for all reasonable out-of-pocket costs or expenses incurred by the Company and the Company Subsidiaries in connection with any actions taken by the Company and the Company Subsidiaries in accordance with this Section 2.7 (including fees and expenses of its Representatives and any and all Taxes). The Park Parties, on a joint and several basis, hereby agree to indemnify and hold harmless the Company, the Company Subsidiaries, and their Representatives from and against any and all liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or incurred by them in connection with or as a result of any actions taken by them pursuant to or in connection with the actions required by this Section 2.7. The provisions of Section 9.4, mutatis mutandis (including that all determinations that would be made by Park or the Park Parties under Section 9.4 shall be made by the Company for purposes of this Section 2.7), shall apply to any indemnity payment pursuant to the preceding sentence. Without limiting the foregoing, none of the representations, warranties or covenants of the Company and the Company Subsidiaries shall be deemed to apply to, or deemed breached or violated by, any of the Specified Transactions or any actions taken pursuant thereto.