SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In the event a right or requirement of substitution of the Leased Property arises as a result of (i) damage or destruction of the Leased Property as set forth in Article XIII hereof or (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 hereof, or (iii) the discontinuance of the use of the Leased Property as set forth in Section 19.1 hereof, Lessee, if no Event of Default shall have occurred and be continuing, shall have the right subject to the conditions set forth below in this Article XX, upon notice to Lessor, to substitute one or more properties (collectively referred to as “Substitute Properties” or individually as a “Substitute Property”) on a monthly Payment Date specified in such notice (the “Substitution Date”) occurring not less than 90 days after receipt by Lessor of such notice. The notice shall be in the form of an Officer’s Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein to the contrary, any other substitution for the Leased Property shall require the prior written consent of Lessor which shall be within the sole discretion of Lessor. (b) If Lessee gives the notice referred to in Section 20.1(a) above, Lessee shall present to Lessor one or more properties (or groups of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e., an annual return on its equity in such property) substantially equivalent to Lessor’s yield from the Leased Property at the time of such proposed substitution (or in the case of substitution because of damage or destruction, the yield immediately prior to such damage or destruction) and as reasonably projected over the remaining Term of this Lease and shall have a Fair Market Value substantially equivalent to the Fair Market Value of the Leased Property. Lessor shall have a period of 90 days within which to review such information and either accept or reject the Substitute Properties so presented unless Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 Business Days after Lessor’s receipt of said notice (subject to further extension for any period of time in which Lessor is not timely provided with the information provided for in Section 20.2 and Section 20.3 below); provided that if Lessor shall contend that the Substitute Properties fail to meet all the conditions for substitution set forth in this Article XX, including the provisions of Sections 20.1(d), (e) and (f) below, the matter shall be submitted to arbitration in accordance with Article XXXI and the time periods for Lessor’s approval or rejection shall be tolled during the period of such arbitration. (c) In the event that, on or before the expiration of the applicable time period for Lessor’s review, Lessor has rejected all of the Substitute Properties so presented, then Lessee shall, for a period of 60 days after the expiration of such period, have the right to terminate this Lease as to the Leased Property upon notice to Lessor accompanied by an offer to purchase the Leased Property on the first Payment Date occurring at least 90 days after the date of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Price, and this Lease shall terminate on the purchase date. (d) L▇▇▇▇▇’s right to offer substitution as set forth in this Article is subject to the conditions set forth in Section 20.2 below, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally, except for “boot” such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is recognized to the Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or (3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee pursuant to any other leases with Lessor of properties hereto or any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-860. (e) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute Properties) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased Property) as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or destruction), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below; in the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below; provided that neither Lessor nor Lessee shall be obligated to consummate such substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent of said Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “Cash Adjustment”). (f) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e., annual return on its investment in such Substitute Property) to the Current Yield (and reasonably expected to be received thereafter throughout the Term of this Lease) from the Leased Property, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factors. (g) The Minimum Repurchase Price of the Substitute Property shall be an amount equal to the Minimum Repurchase Price of the Leased Property (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (e) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (e) above.
Appears in 2 contracts
Sources: Assignment and Assumption of Lease (Global Medical REIT Inc.), Assignment and Assumption of Lease (Global Medical REIT Inc.)
SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In the event a right or requirement of substitution of Lessor accepts an offer by Lessee to substitute other property for the Leased Property arises as a result of (i) damage under Article XIII, Article XIV or destruction of the Leased Property as set forth in Article XIII hereof or (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 hereofXIX, or (iii) the discontinuance of the use of the Leased Property as set forth in Section 19.1 hereof, Lessee, if and provided that no Event of Default shall have occurred and be continuing, Lessee shall have the right (subject to the conditions set forth below in this Article XX, and upon notice to Lessor, ) to substitute one or more properties (collectively referred to as “"Substitute Properties” " or individually as a “"Substitute Property”") for the Leased Property on a monthly Payment Date specified in such notice (the “"Substitution Date”") occurring not less than 90 days after receipt by Lessor of such notice. The notice shall be in the form of an Officer’s 's Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein to the contrary, any other substitution for the Leased Property shall require the prior written consent of Lessor which shall be within the sole discretion of Lessor.
(b) If Lessee gives the notice referred to in Section 20.1(a) above, Lessee shall present to Lessor one or more properties (or groups of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e., an annual return on its equity in such property) substantially equivalent equal to Lessor’s or greater than the Current Yield (and the yield reasonably expected to be received thereafter throughout the remainder of the term) from the Leased Property at the time of such proposed substitution (or in the case of a proposed substitution because as a result of damage damage, destruction or destructionCondemnation, the yield Current Yield immediately prior to such damage damage, destruction or destructionCondemnation) and as reasonably projected over the remaining Term of this Lease and shall have a Fair Market Value substantially equivalent to the Fair Market Value of the Leased Property. Lessor shall have a period of 90 days within which to review such information and either to accept or to reject the Substitute Property or Substitute Properties so presented unless presented; provided that if Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 Business Days after Lessor’s 's receipt of said notice (subject to further extension for any period of time in which Lessor is not timely provided with the information provided for in Section 20.2 and Section 20.3 below); provided that if Lessor shall contend that the Substitute Properties fail to meet all the conditions for substitution set forth in this Article XX, including the provisions of Sections 20.1(d20.1(c), (ed) and (fe) below, the matter shall be submitted to arbitration in accordance with Article XXXI and the time periods for Lessor’s 's approval or rejection shall be tolled during the period of such arbitration.
(c) In the event that, on or before the expiration It shall be a condition to consummation of the applicable time period for Lessor’s review, Lessor has rejected any substitution hereunder that all of the Substitute Properties so presented, then Lessee shall, for a period of 60 days after the expiration of such period, have the right to terminate this Lease as to the Leased Property upon notice to Lessor accompanied by an offer to purchase the Leased Property on the first Payment Date occurring at least 90 days after the date of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Price, and this Lease shall terminate on the purchase date.
(d) L▇▇▇▇▇’s right to offer substitution as set forth in this Article is subject to the conditions set forth in Section 20.2 below, shall have been satisfied with respect to such substitution, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally, except for “"boot” " such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is recognized to the Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or (3856(c)(3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee pursuant to any other leases with Lessor of properties hereto or any other transfers of to the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-860.
(ed) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute Properties) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased Property) as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or destruction), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below; in the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below; provided that neither Lessor nor Lessee shall be obligated to consummate such substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent of said Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “Cash Adjustment”).
(f) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e., annual return on its investment in such Substitute Property) to the Current Yield (and reasonably expected to be received thereafter throughout the Term of this Lease) from the Leased Property, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factors.
(g) The Minimum Repurchase Price of the Substitute Property shall be an amount equal to the Minimum Repurchase Price of the Leased Property (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (e) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (e) above.encumbrances
Appears in 2 contracts
Sources: Lease Agreement (Balanced Care Corp), Lease Agreement (Balanced Care Corp)
SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In If, in the event a right or requirement good faith judgment of substitution of Lessee reasonably exercised, the Leased Property arises as a result of (i) damage becomes uneconomic or destruction of the Leased Property as set forth in Article XIII hereof or (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 hereofUnsuitable for its Primary Intended Use, or (iii) the discontinuance by reason of the use eviction or other material interference caused by any claim of the Leased Property as set forth in Section 19.1 hereofparamount title, or for other prudent business reasons, Lessee desires to terminate this Lease, Lessee, if no Event of Default shall have occurred and be continuing, at any time prior to the expiration of the Term, shall have the right right, subject to the conditions set forth below in this Article XXXXI, upon written notice to Lessor, to substitute one or more properties (collectively referred to as “"Substitute Properties” " or individually as a “"Substitute Property”") on a monthly Base Rent Payment Date specified in such notice (the “"Substitution Date”") occurring not less than 90 ninety (90) days after receipt by Lessor of such notice, except if Lessee is required by court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case if Lessee shall have informed Lessor in writing of the filing of such court order or administrative action and kept Lessor reasonably appraised of the status thereof, the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event less than fifteen (15) Business Days after the receipt by Lessor of such notice. The notice shall be in the form of an Officer’s 's Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein For purposes of this paragraph, the desire of Lessee to reduce the contrary, any other substitution for payment of Rent with respect to the Leased Property whose operation (considering the Rent) is uneconomic to Lessee shall require the prior written consent of Lessor which shall not be within the sole discretion of Lessordeemed to be a reason for substitution.
(b) If Lessee voluntarily or involuntarily, for any reason, has discontinued use of the Leased Property in its business operations for a period in excess of one year, and Lessor has not exercised its right to terminate this Lease pursuant to Section 16.1 hereof, Lessee shall have the obligation, upon notice given as set forth in paragraph (a) above, to substitute a Substitute Property or, if applicable, invoke the procedure set forth in Article XXI.
(c) If Lessee gives the notice referred to in Section 20.1(a21.1(a) or (b) above, Lessee shall present to Lessor one or more three properties (or groups of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e., an annual return on its equity in such property) substantially equivalent to Lessor’s 's yield from the Leased Property at the time of such proposed substitution (or in the case of substitution because of damage or destruction, the yield immediately prior to such damage or destruction) and as reasonably projected over the remaining Term of this Lease and shall have a Fair Market Value substantially equivalent to the Fair Market Value of the Leased PropertyLease. Lessor shall have a period of 90 ninety (90) days within which to review such information and either accept one or reject all the Substitute Properties so presented unless Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 fifteen (15) Business Days after Lessor’s 's receipt of said notice (subject to further extension for any period of time in which Lessor is not timely provided with the information provided for in Section 20.2 21.2 and Section 20.3 21.3 below); provided ) provided, however, that if Lessor shall contend that the Substitute Properties fail to meet all the conditions for substitution set forth in this Article XXXXI, including without limitation the provisions of Sections 20.1(d21.1(d), (e) and (f) below, the matter shall be submitted to arbitration in accordance with Article XXXI at Lessor's discretion and the time periods for Lessor’s 's approval or rejection shall be tolled during the period of such arbitration.
(cd) In the event that, on or before the expiration of the applicable time period for Lessor’s 's review, Lessor has rejected all of the Substitute Properties so presented, then Lessee shall, for a period of 60 sixty (60) days after the expiration of such period, have the right to terminate this Lease as to the Leased Property upon notice to Lessor accompanied by an offer to purchase the Leased Property on the first Base Rent Payment Date occurring at least 90 ninety (90) days after the date of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Price, and this Lease shall terminate on the purchase datedate provided no Event of Default shall have occurred and be continuing.
(de) L▇▇▇▇▇’s If Lessor accepts such offer, or fails to reject the same by written notification within the applicable time period for Lessor's review, Lessor shall, upon receipt from Lessee of the purchase price provided for above and any Rent due and payable hereunder (excluding the installment of Base Rent due on the purchase date), convey the Leased Property to Lessee on the purchase date, in accordance with the provisions of Article XVIII and this Lease shall thereupon terminate as to the Leased Property. Upon completion of the purchase of the Leased Property, no Rent shall thereafter accrue with respect thereto.
(f) Lessee's right (and obligation) to offer substitution as set forth in this Article is subject to the conditions set forth in Section 20.2 21.2 below, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally, except for “"boot” " such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is recognized to the Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or (3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee or any Affiliate pursuant to any other leases with Lessor of properties hereto or the properties, any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-860.
(eg) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute PropertiesProperties subject) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased PropertyProperty subject) as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or destruction), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below, to Lessee; in the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below, to Lessor; provided provided, however, that neither Lessor nor Lessee shall be obligated to consummate such substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent (10%) of said Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “"Cash Adjustment”"). Without limiting the generality or effect of the preceding sentence, in the event that, on the Substitution Date, Lessor is obligated to pay a Cash Adjustment to Lessee and Lessor does not have sufficient funds available, or elects not to make such payment in cash, Lessor shall provide Lessee with (and Lessee shall accrue) a purchase money note and mortgage for a term not to exceed eighteen (18) months from the Substitution Date and bearing interest, payable monthly, at the rate per annum described in Section 10.2 as the Test Rate, or if no such Test Rate exists, then at the Prime Rate.
(fh) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e., annual return on its investment equity in such Substitute Property) to the Current Yield that received (and reasonably expected to be received thereafter throughout the Term of this Leasethereafter) from the Leased Property, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factors.
(gi) The Minimum Repurchase Price Fair Market Value of the Substitute Property shall be an amount equal to the Minimum Repurchase Price Fair Market Value of the Leased Property (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (eg) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (eg) above.
Appears in 2 contracts
Sources: Lease Agreement (Medical Properties Trust Inc), Lease Agreement (Medical Properties Trust Inc)
SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In the event a right or requirement of substitution of the Leased Property leased property arises as a result of (i) damage or destruction of the Leased Property as set forth in Article XIII hereof or hereof, (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 143 hereof, or (iii) the discontinuance of the use of the Leased Property as set forth in Section 19.1 hereof, Lessee, if and provided -------- that no Event of Default shall have occurred and be continuing, Lessee shall have the right (subject to fulfillment of the conditions set forth below in this Article XX, XX and upon notice to Lessor, ) to substitute one or more properties (collectively referred to as “"Substitute Properties” " or individually as a “"Substitute Property”") on a monthly Payment Date specified in such notice (the “"Substitution Date”") occurring not less than 90 days after receipt by Lessor of such notice. The notice shall be in the form of an Officer’s 's Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein to the contrary, any other substitution for the Leased Property shall require the prior written consent of Lessor which shall be within the sole discretion of Lessor.
(b) If Lessee gives the notice referred to in Section 20.1(a20.l(a) above, Lessee shall present to Lessor one or more properties (or groups of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e., an annual return on its equity in such property) substantially equivalent to not less than ----- Lessor’s 's yield from the Leased Property at the time of such proposed substitution (or in the case of substitution because of damage or destruction, the yield immediately prior to such damage or destruction) and as reasonably projected over the remaining Term of this Lease and shall have a Fair Market Value substantially equivalent to the Fair Market Value of the Leased Property. Lessor shall have a period of 90 days within which to review such information and either accept or reject the Substitute Properties so presented unless Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 30 Business Days after Lessor’s 's receipt of said notice (subject to further extension for any period of time in which Lessor is not timely provided with the information provided for -------- in Section 20.2 and Section 20.3 below); provided that if Lessor shall contend that the Substitute Properties fail to meet all the conditions for substitution set forth in this Article XX, including the provisions of Sections 20.1(d), (e) and (f) below, the matter shall be submitted to arbitration in accordance with Article XXXI and the time periods for Lessor’s 's approval or rejection shall be tolled during the period of such arbitration.
(c) In the event that, that on or before the expiration of the applicable time period for Lessor’s 's review, Lessor has rejected all of the Substitute Property or Properties so presented, then Lessee shall, for a period of 60 days after the expiration of such period, have the right to terminate this Lease as to the Leased Property upon notice to Lessor accompanied by an offer to purchase the Leased Property on the first Payment Date occurring at least 90 days after the date of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Price, and this Lease shall terminate on the purchase date.
(d) L▇▇▇▇▇’s Lessee's right to offer substitution as set forth in this Article XX is subject to the conditions set forth in Section 20.2 below, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally, except for “"boot” " such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is recognized to the Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or (3856(c)(3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee pursuant to any other leases with Lessor of properties hereto or any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-860.
(e) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute Properties) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased Property) as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or destruction), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below; in . In the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below; provided that . Notwithstanding the foregoing, neither Lessor nor Lessee shall be obligated to consummate any such substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent of said the Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “"Cash Adjustment”").
(f) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e., annual return on its investment in such Substitute Property) to not less than the Current Yield (and reasonably expected to be received thereafter throughout the Term of this Lease) from the Leased Property, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factors.
(g) The Minimum Repurchase Price of the Substitute Property shall be an amount equal to the Minimum Repurchase Price of the Leased Property (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (e) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (e) above.
Appears in 1 contract
SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In the event a right or requirement of substitution of the Leased Property arises as a result of (i) damage or destruction of the Leased Property as set forth in Article XIII 13 hereof or (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 hereof, or (iii) the discontinuance of the use of the Leased Property as set forth in Section 19.1 hereof, Lessee, if no Event of Default shall have occurred and be continuing, shall have the right subject to the conditions set forth below in this Article XX20, upon notice to Lessor, to substitute one or more properties (collectively referred to as “Substitute Properties” or individually as a “Substitute Property”) on a monthly Payment Date specified in such notice (the “Substitution Date”) occurring not less than 90 days after receipt by Lessor of such notice. The notice shall be in the form of an Officer’s 's Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein to the contrary, any other substitution for the Leased Property shall require the prior written consent of Lessor which shall be within the sole discretion of Lessor.
(b) If Lessee gives the notice referred to in Section 20.1(a) above, Lessee shall present to Lessor one or more properties (or groups of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e., an annual return on its equity in such property) substantially Current Yield that is equivalent to or greater than Lessor’s yield 's Current Yield from the Leased Property at the time of such proposed substitution (or in the case of substitution because of damage or destruction, the yield Current Yield immediately prior to such damage or destruction) and as reasonably projected over the remaining Term of this Lease Lease, and shall have a Fair Market Value substantially equivalent to that is no less than 90% of the Fair Market Value of the Leased Property. Lessor shall have a period of 90 days within which to review such information and either accept or reject the Substitute Properties so presented unless Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 Business Days after Lessor’s 's receipt of said notice (subject to further extension for any period of time in which Lessor is not timely provided with the information provided for in Section 20.2 and Section 20.3 below); provided that if Lessor shall contend that the Substitute Properties fail to meet all the conditions for substitution set forth in this Article XX20, including the provisions of Sections 20.1(d), 20.1 (e) and (f) below, the matter shall be submitted to arbitration in accordance with Article XXXI 31 and the time periods for Lessor’s 's approval or rejection shall be tolled during the period of such arbitration.
(c) In the event that, on or before the expiration of the applicable time period for Lessor’s 's review, Lessor has rejected all of the Substitute Properties so presented, then Lessee shall, for a period of 60 days after the expiration of such period, have the right to terminate this Lease as to the Leased Property upon notice to Lessor accompanied by an offer to purchase the Leased Property on the first Payment Date occurring at least 90 days after the date of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Purchase Price, and this Lease shall terminate on the purchase date.
(d) L▇▇▇▇▇’s right to offer substitution as set forth in this Article is subject to the conditions set forth in Section 20.2 below, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally, except for “boot” such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is recognized to the Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or (3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee pursuant to any other leases with Lessor of properties hereto or any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-860.
(e) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute Properties) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased Property) as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or destruction), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below; in the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below; provided that neither Lessor nor Lessee shall be obligated to consummate such substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent of said Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “Cash Adjustment”).
(f) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e., annual return on its investment in such Substitute Property) to the Current Yield (and reasonably expected to be received thereafter throughout the Term of this Lease) from the Leased Property, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factors.
(g) The Minimum Repurchase Price of the Substitute Property shall be an amount equal to the Minimum Repurchase Price of the Leased Property (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (e) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (e) above.
Appears in 1 contract
Sources: Assignment and Assumption of Lease (Global Medical REIT Inc.)
SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In If, in the event a right or requirement good faith judgment of substitution of Lessee reasonably exercised, the Leased Property arises as a result of (i) damage becomes uneconomic or destruction of the Leased Property as set forth in Article XIII hereof or (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 hereofUnsuitable for its Primary Intended Use, or (iii) the discontinuance by reason of the use eviction or other material interference caused by any claim of the Leased Property as set forth in Section 19.1 hereofparamount title, or for other prudent business reasons, Lessee desires to terminate this Lease, Lessee, if no Event of Default shall have occurred and be continuing, at any time prior to the expiration of the Term, shall have the right right, subject to the conditions set forth below in this Article XXXXI, upon written notice to Lessor, to substitute one or more properties (collectively referred to as “"Substitute Properties” " or individually as a “"Substitute Property”") on a monthly Base Rent Payment Date specified in such notice (the “"Substitution Date”") occurring not less than 90 ninety (90) days after receipt by Lessor of such notice. The notice shall be in the form of an Officer’s Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein to the contrary, any other substitution for the Leased Property shall require the prior written consent of Lessor which shall be within the sole discretion of Lessor.
(b) If Lessee gives the notice referred to in Section 20.1(a) above, Lessee shall present to Lessor one or more properties (or groups of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e., an annual return on its equity in such property) substantially equivalent to Lessor’s yield from the Leased Property at the time of such proposed substitution (or in the case of substitution because of damage or destruction, the yield immediately prior to such damage or destruction) and as reasonably projected over the remaining Term of this Lease and shall have a Fair Market Value substantially equivalent to the Fair Market Value of the Leased Property. Lessor shall have a period of 90 days within which to review such information and either accept or reject the Substitute Properties so presented unless except if Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case if Lessee shall have informed Lessor in writing of the filing of such court order or administrative action and kept Lessor reasonably appraised of the status thereof, the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 fifteen (15) Business Days after Lessor’s the receipt by Lessor of said such notice. The notice (subject to further extension shall be in the form of an Officer's Certificate and shall specify the reason(s) for any period the substitution and the proposed Substitution Date. For purposes of time in which Lessor is not timely provided with the information provided for in Section 20.2 and Section 20.3 below); provided that if Lessor shall contend that the Substitute Properties fail to meet all the conditions for substitution set forth in this Article XX, including the provisions of Sections 20.1(d), (e) and (f) belowparagraph, the matter shall be submitted desire of Lessee to arbitration in accordance reduce the payment of Rent with Article XXXI and the time periods for Lessor’s approval or rejection shall be tolled during the period of such arbitration.
(c) In the event that, on or before the expiration of the applicable time period for Lessor’s review, Lessor has rejected all of the Substitute Properties so presented, then Lessee shall, for a period of 60 days after the expiration of such period, have the right to terminate this Lease as respect to the Leased Property upon notice to Lessor accompanied by an offer to purchase whose operation (considering the Leased Property on the first Payment Date occurring at least 90 days after the date of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Price, and this Lease shall terminate on the purchase date.
(dRent) L▇▇▇▇▇’s right to offer substitution as set forth in this Article is subject to the conditions set forth in Section 20.2 below, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally, except for “boot” such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is recognized to the Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or (3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee pursuant to any other leases with Lessor of properties hereto or any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-860.
(e) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute Properties) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased Property) as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or destruction), Lessor shall pay uneconomic to Lessee an amount equal to the difference, subject to the limitation set forth below; in the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below; provided that neither Lessor nor Lessee shall not be obligated to consummate such substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent of said Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “Cash Adjustment”).
(f) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e., annual return on its investment in such Substitute Property) to the Current Yield (and reasonably expected deemed to be received thereafter throughout the Term of this Lease) from the Leased Property, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factorsa reason for substitution.
(g) The Minimum Repurchase Price of the Substitute Property shall be an amount equal to the Minimum Repurchase Price of the Leased Property (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (e) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (e) above.
Appears in 1 contract
SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In the event a right or requirement of substitution of Lessor accepts an offer by Lessee to substitute other property for the Leased Property arises as a result of (i) damage under Article XIII, Article XIV or destruction of the Leased Property as set forth in Article XIII hereof or (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 hereofXIX, or (iii) the discontinuance of the use of the Leased Property as set forth in Section 19.1 hereof, Lessee, if and provided that no Event of Default shall have occurred and be continuing, Lessee shall have the right (subject to the conditions set forth below in this Article XX, and upon notice to Lessor, ) to substitute one or more properties (collectively referred to as “"Substitute Properties” " or individually as a “"Substitute Property”") for the Leased Property on a monthly Payment Date specified in such notice (the “"Substitution Date”") occurring not less than 90 days after receipt by Lessor of such notice. The notice shall be in the form of an Officer’s 's Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein to the contrary, any other substitution for the Leased Property shall require the prior written consent of Lessor which shall be within the sole discretion of Lessor.
(b) If Lessee gives the notice referred to in Section 20.1(a) above, Lessee shall present to Lessor one or more properties (or groups of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e., an annual return on its equity in such property) substantially equivalent equal to Lessor’s or greater than the Current Yield (and the yield reasonably expected to be received thereafter throughout the remainder of the term) from the Leased Property at the time of such proposed substitution (or in the case of a proposed substitution because as a result of damage damage, destruction or destructionCondemnation, the yield Current Yield immediately prior to such damage damage, destruction or destructionCondemnation) and as reasonably projected over the remaining Term of this Lease and shall have a Fair Market Value substantially equivalent to the Fair Market Value of the Leased Property. Lessor shall have a period of 90 days within which to review such information and either to accept or to reject the Substitute Property or Substitute Properties so presented unless presented; provided that if Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 Business Days after Lessor’s 's receipt of said notice (subject to further extension for any period of time in which Lessor is not timely provided with the information provided for in Section 20.2 and Section 20.3 below); provided that if Lessor shall contend that the Substitute Properties fail to meet all the conditions for substitution set forth in this Article XX, including the provisions of Sections 20.1(d20.1(c), (ed) and (fe) below, the matter shall be submitted to arbitration in accordance with Article XXXI and the time periods for Lessor’s 's approval or rejection shall be tolled during the period of such arbitration.
(c) In the event that, on or before the expiration It shall be a condition to consummation of the applicable time period for Lessor’s review, Lessor has rejected any substitution hereunder that all of the Substitute Properties so presented, then Lessee shall, for a period of 60 days after the expiration of such period, have the right to terminate this Lease as to the Leased Property upon notice to Lessor accompanied by an offer to purchase the Leased Property on the first Payment Date occurring at least 90 days after the date of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Price, and this Lease shall terminate on the purchase date.
(d) L▇▇▇▇▇’s right to offer substitution as set forth in this Article is subject to the conditions set forth in Section 20.2 below, shall have been satisfied with respect to such substitution, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally, except for “"boot” " such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is recognized to the Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or (3856(c)(3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee pursuant to any other leases with Lessor of properties hereto or any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-860.
(ed) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute Properties) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased Property) as of the Substitution Date (or in the case of damage destruction or destructionCondemnation, the Fair Market Value immediately prior to such damage damage, destruction or destructionCondemnation), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below; in . In the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below; provided that . Notwithstanding the foregoing, neither Lessor nor Lessee shall be obligated to consummate such any substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent of said Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “"Cash Adjustment”").
(fe) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e., annual return on its investment in such Substitute Property) to not less than the Current Yield (and the yield reasonably expected to be received thereafter throughout the Term remainder of this Leasethe Term) from the Leased PropertyProperty prior to any damage, destruction or Condemnation, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factors.
(gf) The Minimum Repurchase Price Purchase Amount of the any Substitute Property or Substitute Properties shall be an amount equal to the Minimum Repurchase Price Purchase Amount of the Leased Property on the Substitution Date (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (eSection 20.1(d) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (eSection 20.1(d) above.
Appears in 1 contract
Sources: Lease Agreement (Integrated Living Communities Inc)
SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In If, in the event a right or requirement good faith judgment of substitution of Lessee reasonably exercised, the Leased Property arises as a result of (i) damage becomes uneconomic or destruction of the Leased Property as set forth in Article XIII hereof or (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 hereofUnsuitable for its Primary Intended Use, or (iii) the discontinuance by reason of the use eviction or other material interference caused by any claim of the Leased Property as set forth in Section 19.1 hereofparamount title, or for other prudent business reasons, Lessee desires to terminate this Lease, Lessee, if no Event of Default shall have occurred and be continuing, at any time prior to the expiration of the Term, shall have the right right, subject to the conditions set forth below in this Article XXXXI, upon written notice to Lessor, to substitute one or more properties (collectively referred to as “"Substitute Properties” " or individually as a “"Substitute Property”") on a monthly Base Rent Payment Date specified in such notice (the “"Substitution Date”") occurring not less than 90 ninety (90) days after receipt by Lessor of such notice, except if Lessee is required by court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case if Lessee shall have informed Lessor in writing of the filing of such court order or administrative action and kept Lessor reasonably appraised of the status thereof, the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event less than fifteen (15) Business Days after the receipt by Lessor of such notice. The notice shall be in the form of an Officer’s 's Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein For purposes of this paragraph, the desire of Lessee to reduce the contrary, any other substitution for payment of Rent with respect to the Leased Property whose operation (considering the Rent) is uneconomic to Lessee shall require the prior written consent of Lessor which shall not be within the sole discretion of Lessordeemed to be a reason for substitution.
(b) If Lessee voluntarily or involuntarily, for any reason, has discontinued use of the Leased Property in its business operations for a period in excess of one year, and Lessor has not exercised its right to terminate this Lease pursuant to Section 16.1 hereof, Lessee shall have the obligation, upon notice given as set forth in paragraph (a) above, to substitute a Substitute Property or, if applicable, invoke the procedure set forth in Article XXI.
(c) If Lessee gives the notice referred to in Section 20.1(a21.1(a) or (b) above, Lessee shall present to Lessor one or more three properties (or groups of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e., an annual return on its equity in such property) substantially equivalent to Lessor’s 's yield from the Leased Property at the time of such proposed substitution (or in the case of substitution because of damage or destruction, the yield immediately prior to such damage or destruction) and as reasonably projected over the remaining Term of this Lease and shall have a Fair Market Value substantially equivalent to the Fair Market Value of the Leased PropertyLease. Lessor shall have a period of 90 ninety (90) days within which to review such information and either accept one or reject all the Substitute Properties so presented unless Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 fifteen (15) Business Days after Lessor’s 's receipt of said notice (subject to further extension for any period of time in which Lessor is not timely provided with the information provided for in Section 20.2 21.2 and Section 20.3 21.3 below); provided ) provided, however, that if Lessor shall contend that the Substitute Properties fail to meet all the conditions for substitution set forth in this Article XXXXI, including without limitation the provisions of Sections 20.1(d21.1(d), (e) and (f) below, the matter shall be submitted to arbitration in accordance with Article XXXI at Lessor's discretion and the time periods for Lessor’s 's approval or rejection shall be tolled during the period of such arbitration.
(cd) In the event that, on or before the expiration of the applicable time period for Lessor’s 's review, Lessor has rejected all of the Substitute Properties so presented, then Lessee shall, for a period of 60 sixty (60) days after the expiration of such period, have the right to terminate this Lease as to the Leased Property upon notice to Lessor accompanied by an offer to purchase the Leased Property on the first Base Rent Payment Date occurring at least 90 ninety (90) days after the date of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Price, and this Lease shall terminate on the purchase datedate provided no Event of Default shall have occurred and be continuing.
(de) L▇▇▇▇▇’s If Lessor accepts such offer, or fails to reject the same by written notification within the applicable time period for Lessor's review, Lessor shall, upon receipt from Lessee of the purchase price provided for above and any Rent due and payable hereunder (excluding the installment of Base Rent due on the purchase date), convey the Leased Property to Lessee on the purchase date, in accordance with the provisions of Article XVIII and this Lease shall thereupon terminate as to the Leased Property. Upon completion of the purchase of the Leased Property, no Rent shall thereafter accrue with respect thereto.
(f) Lessee's right (and obligation) to offer substitution as set forth in this Article is subject to the conditions set forth in Section 20.2 21.2 below, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally, except for “boot” such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is recognized to the Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or (3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee pursuant to any other leases with Lessor of properties hereto or any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-860.
(e) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute Properties) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased Property) as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or destruction), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below; in the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below; provided that neither Lessor nor Lessee shall be obligated to consummate such substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent of said Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “Cash Adjustment”).
(f) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e., annual return on its investment in such Substitute Property) to the Current Yield (and reasonably expected to be received thereafter throughout the Term of this Lease) from the Leased Property, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factors.
(g) The Minimum Repurchase Price of the Substitute Property shall be an amount equal to the Minimum Repurchase Price of the Leased Property (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (e) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (e) above.for
Appears in 1 contract
SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In If, in the event a right or requirement good faith judgment of substitution of Lessee, the Leased Property arises as a result of (i) damage becomes uneconomic or destruction of the Leased Property as set forth in Article XIII hereof or (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 hereofUnsuitable for Its Primary Intended Use, or (iii) the discontinuance by reason of the use eviction or other material interference caused by any claim of the Leased Property as set forth in Section 19.1 hereofparamount title, or for other prudent business reasons, Lessee desires to terminate this Lease, Lessee desires to terminate this Lease, Lessee, if no Event of Default shall have occurred and be continuing, at any time prior to the expiration of the Term, shall have the right right, subject to the conditions set forth below in this Article XXXXI, upon notice to Lessor, to substitute one or more properties (collectively referred to as “"Substitute Properties” " or individually as a “"Substitute Property”") on a monthly Base Rent Payment Date specified in such notice (the “"Substitution Date”") occurring not less than 90 ninety (90) days after receipt by Lessor of such notice, except if Lessee is required by court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case if Lessee shall have informed Lessor of the filing of such court order or administrative action and kept Lessor reasonably appraised of the status thereof, the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event less than fifteen (15) Business Days after the receipt by Lessor of such notice. The notice shall be in the form of an Officer’s 's Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein For purposes of this paragraph, the desire to reduce the contrary, any other substitution for payment of Rent with respect to the Leased Property whose operation (considering the Rent) is uneconomic to Lessee shall require the prior written consent of Lessor which shall not be within the sole discretion of Lessordeemed to be a reason for substitution.
(b) If Lessee voluntarily or involuntarily, for any reason, has discontinued use of the Leased Property in its business operations for a period in excess of one year, and Lessor has not exercised its right to terminate this Lease pursuant to Section 16.1(h) hereof, Lessee shall have the obligation, upon notice given as set forth in paragraph (a) above, to substitute a Substitute Property, or, if applicable, invoke the procedure set forth in Article XXI.
(c) If Lessee gives the notice referred to in Section 20.1(a21.1(a) or (b) above, Lessee shall present to Lessor one or more three properties (or groups of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e., an annual return on its equity in such property) substantially equivalent to Lessor’s 's yield from the Leased Property at the time of such proposed substitution (or in the case of substitution because of damage or destruction, the yield immediately prior to such damage or destruction) and as reasonably projected over the remaining Term of this Lease and shall have a Fair Market Value substantially equivalent to the Fair Market Value of the Leased PropertyLease. Lessor shall have a period of 90 ninety (90) days within which to review such information and either accept or reject the Substitute Properties so presented unless Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 fifteen (15) Business Days after Lessor’s 's receipt of said notice (subject to further extension for any period of time in which Lessor is not timely provided with the information provided for in Section 20.2 21.2 and Section 20.3 21.3 below); provided ) provided, however, that if Lessor shall contend that the Substitute Properties fail to meet all the conditions for substitution set forth in this Article XXXXI, including without limitation the provisions of Sections 20.1(d21.1(d), (e) and (f) below, the matter shall be submitted to arbitration in accordance with Article XXXI XXXVII and the time periods for Lessor’s 's approval or rejection shall be tolled during the period of such arbitration.
(c) . In the event that, on or before the expiration of the applicable time period for Lessor’s 's review, Lessor has rejected all of the Substitute Properties so presented, then Lessee shall, for a period of 60 sixty (60) days after the expiration of such period, have the right to terminate this Lease as to the Leased Property upon notice to Lessor accompanied by an offer to purchase the Leased Property on the first Base Rent Payment Date occurring at least 90 ninety (90) days after the date of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Price, and this Lease shall terminate on the purchase date provided no Event of Default shall have occurred and be continuing. If Lessor accepts such offer, or fails to reject the same by written notification within the applicable time period for Lessor's review, Lessor shall, upon receipt from Lessee of the purchase price provided for above and any Rent due and payable hereunder (excluding the installment of Base Rent due on the purchase date), convey the Leased Property to Lessee on the purchase date, in accordance with the provision of Article XVIII and this Lease shall thereupon terminate as to the Leased Property. Upon completion of the purchase of the Leased Property, no Rent shall thereafter accrue with respect thereto.
(d) L▇▇▇▇▇’s Lessee's right (and obligation) to offer substitution as set forth in this Article is subject to the conditions set forth in Section 20.2 21.2 below, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally, except for “"boot” " such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is recognized to the Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or (3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee or any Affiliate pursuant to any other leases with Lessor of the properties described in Exhibit C hereto or any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-860.
(e) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute PropertiesProperties subject) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased PropertyProperty subject) as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or destruction), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below, to Lessee; in the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below, to Lessor; provided provided, however, that neither Lessor nor Lessee shall be obligated to consummate such substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent (10%) of said Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “"Cash Adjustment”"). Without limiting the generality or effect of the preceding sentence, in the event that, on the Substitution Date, Lessor is obligated to pay a Cash Adjustment to Lessee and Lessor does not have sufficient funds available, or elects not to make such payment in cash. Lessor shall provide Lessee with (and Lessee shall accrue) a purchase money note and mortgage for a term not to exceed eighteen (18) months from the Substitution Date and bearing interest, payable monthly, at the rate per annum described in Section 10.2 as the test rate, or if no such test rate exists, then at the Prime Rate.
(f) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e., annual return on its investment equity in such Substitute Property) to the Current Yield that received (and reasonably expected to be received thereafter throughout the Term of this Leasethereafter) from the Leased Property, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factors.
(g) The Minimum Repurchase Price of the Substitute Property shall be an amount equal to the Minimum Repurchase Price of the Leased Property (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (e) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (e) above.
Appears in 1 contract
SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In the event a right or requirement of substitution of the Leased Property arises as a result of (i) damage or destruction of the Leased Property as set forth in Article XIII hereof or hereof, (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 hereof, or (iii) the discontinuance of the use of the Leased Property as set forth in Section 19.1 hereof, Lessee, if and provided -------- that no Event of Default shall have occurred and be continuing, Lessee shall have the right (subject to fulfillment of the conditions set forth below in this Article XX, and upon notice to Lessor, ) to substitute one or more properties (collectively referred to as “"Substitute Properties” " or individually as a “"Substitute Property”") on a monthly Payment Date specified in such notice (the “"Substitution Date”") occurring not less than 90 days after receipt by Lessor of such notice. The notice shall be in the form of an Officer’s 's Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein to the contrary, any other substitution for the Leased Property shall require the prior written consent of Lessor which shall be within the sole discretion of Lessor.
(b) If Lessee gives the notice referred to in Section 20.1(a) above, Lessee shall present to Lessor one or more properties (or groups of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e., an annual return on its equity in such property) substantially equivalent to not less than --- Lessor’s 's yield from the Leased Property at the time of such proposed substitution (or in the case of substitution because of damage or destruction, the yield immediately prior to such damage or destruction) and as reasonably projected over the remaining Term of this Lease and shall have a Fair Market Value substantially equivalent to the Fair Market Value of the Leased Property. Lessor shall have a period of 90 days within which to review such information and either accept or reject the Substitute Properties so presented unless Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 30 Business Days after Lessor’s 's receipt of said notice (subject to further extension for any period of time in which Lessor is not timely provided with the information provided for in Section 20.2 and Section 20.3 below); provided that if Lessor shall contend that -------- the Substitute 29 Properties fail to meet all the conditions for substitution set forth in this Article XX, including the provisions of Sections 20.1(d), (e) and (f) below, the matter shall be submitted to arbitration in accordance with Article XXXI and the time periods for Lessor’s 's approval or rejection shall be tolled during the period of such arbitration.
(c) In the event that, that on or before the expiration of the applicable time period for Lessor’s 's review, Lessor has rejected all of the Substitute Property or Properties so presented, then Lessee shall, for a period of 60 days after the expiration of such period, have the right to terminate this Lease as to the Leased Property upon notice to Lessor accompanied by an offer to purchase the Leased Property on the first Payment Date occurring at least 90 days after the date of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Price, and this Lease shall terminate on the purchase date.
(d) L▇▇▇▇▇’s Lessee's right to offer substitution as set forth in this Article XX is subject to the conditions set forth in Section 20.2 below, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally, except for “"boot” " such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is recognized to the Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or (3856(c)(3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee pursuant to any other leases with Lessor of properties hereto or any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-860.
(e) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute Properties) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased Property) as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or destruction), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below; in . In the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below; provided that . Notwithstanding the foregoing, neither Lessor nor Lessee shall be obligated to consummate any such substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent of said the Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “"Cash Adjustment”").
(f) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e., annual return on its investment in such Substitute Property) to not less than the Current Yield (and reasonably expected to be received thereafter throughout the Term of this Lease) from the Leased Property, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factors.
(g) The Minimum Repurchase Price of the Substitute Property shall be an amount equal to the Minimum Repurchase Price of the Leased Property (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (e) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (e) above.
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SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In the event a right or requirement of substitution of Lessor accepts an offer by Lessee to substitute other property for the Leased Property arises as a result of (i) damage under Article 13, Article 14 or destruction of the Leased Property as set forth in Article XIII hereof or (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 hereof19, or (iii) the discontinuance of the use of the Leased Property as set forth in Section 19.1 hereof, Lessee, if and provided that no Event of Default shall have occurred and be continuing, Lessee shall have the right (subject to the conditions set forth below in this Article XX20, and upon notice to Lessor, to substitute one or more properties (collectively referred to as “Substitute Properties” or individually as a “Substitute Property”) on a monthly Payment Date specified in such notice (the “Substitution Date”) occurring not less than 90 days after receipt by Lessor of such notice. The notice shall be in the form of an Officer’s Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein to the contrary, any other substitution for the Leased Property shall require the prior written consent of Lessor which shall be within the sole discretion of Lessor.to
(b) If Lessee gives the notice referred to in Section 20.1(a) above, Lessee shall present to Lessor one or more properties (or groups of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e.i.e. , an annual return on its equity in such property) substantially equivalent equal to Lessor’s or greater than the Current Yield (and the yield reasonably expected to be received thereafter throughout the remainder of the term) from the Leased Property at the time of such proposed substitution (or in the case of a proposed substitution because as a result of damage damage, destruction or destructionCondemnation, the yield Current Yield immediately prior to such damage damage, destruction or destructionCondemnation) and as reasonably projected over the remaining Term of this Lease and shall have a Fair Market Value substantially equivalent to the Fair Market Value of the Leased Property. Lessor shall have a period of 90 days within which to review such information and either to accept or to reject the Substitute Property or Substitute Properties so presented unless presented; provided that if Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case ease the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 Business Days after Lessor’s ' s receipt of said notice (subject to further extension for any period of time in which Lessor is not timely provided with the information provided for in Section 20.2 and Section 20.3 below); provided that if Lessor shall contend that the Substitute Properties fail to meet all the conditions for substitution set forth in this Article XX20, including the provisions of Sections 20.1(d20.1(c), (ed) and (fe) below, the matter shall be submitted to arbitration in accordance with Article XXXI 31 and the time periods for Lessor’s 's approval or rejection shall be tolled during the period of such arbitration.
(c) In the event that, on or before the expiration It shall be a condition to consummation of the applicable time period for Lessor’s review, Lessor has rejected any substitution hereunder that all of the Substitute Properties so presented, then Lessee shall, for a period of 60 days after the expiration of such period, have the right to terminate this Lease as to the Leased Property upon notice to Lessor accompanied by an offer to purchase the Leased Property on the first Payment Date occurring at least 90 days after the date of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Price, and this Lease shall terminate on the purchase date.
(d) L▇▇▇▇▇’s right to offer substitution as set forth in this Article is subject to the conditions set forth in Section 20.2 below, shall have been satisfied with respect to such substitution, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind land under Section 1031 of the Code, in which, generally, except for “"boot” " such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is recognized to the Lessor, (ii) the substitution or sale will wil1 not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or (3856(c)(3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee pursuant to any other leases with Lessor of properties hereto or any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-856- 860.
(ed) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute Properties) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased Property) as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or destruction), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below; in the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below; provided that neither Lessor nor Lessee shall be obligated to consummate such substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent of said Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “Cash Adjustment”).of
(fe) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e.i.e. , annual return on its investment in such Substitute Property) to not less than the Current Yield (and the yield reasonably expected to be received thereafter throughout the Term remainder of this Leasethe Term) from the Leased PropertyProperty prior to any damage, destruction or Condemnation, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factors.
(gf) The Minimum Repurchase Purchase Price of the any Substitute Property or Substitute Properties shall be an amount equal to the Minimum Repurchase Purchase Price of the Leased Property on the Substitution Date (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (eSection 20.1(d) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (eSection 20.1(d) above.
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Sources: Lease Agreement (Emeritus Corp\wa\)
SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In If, in the event a right or requirement good faith judgment of substitution of Lessee reasonably exercised, the Leased Property arises as a result of (i) damage becomes uneconomic or destruction of the Leased Property as set forth in Article XIII hereof or (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 hereofUnsuitable for its Primary Intended Use, or (iii) the discontinuance by reason of the use eviction or other material interference caused by any claim of the Leased Property as set forth in Section 19.1 hereofparamount title, or for other prudent business reasons, Lessee desires to terminate this Lease, Lessee, if no Event of Default shall have occurred and be continuing, at any time prior to the expiration of the Term, shall have the right right, subject to the conditions set forth below in this Article XXXXI, upon written notice to Lessor, to substitute one or more properties (collectively referred to as “"Substitute Properties” " or individually as a “"Substitute Property”") on a monthly Base Rent Payment Date specified in such notice (the “"Substitution Date”") occurring not less than 90 ninety (90) days after receipt by Lessor of such notice, except if Lessee is required by court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case if Lessee shall have informed Lessor in writing of the filing of such court order or administrative action and kept Lessor reasonably appraised of the status thereof, the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event less than fifteen (15) Business Days after the receipt by Lessor of such notice. The notice shall be in the form of an Officer’s 's Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein For purposes of this paragraph, the desire of Lessee to reduce the contrary, any other substitution for payment of Rent with respect to the Leased Property whose operation (considering the Rent) is uneconomic to Lessee shall require the prior written consent of Lessor which shall not be within the sole discretion of Lessordeemed to be a reason for substitution.
(b) If Lessee voluntarily or involuntarily, for any reason, has discontinued use of the Leased Property in its business operations for a period in excess of one year, and Lessor has not exercised its right to terminate this Lease pursuant to Section 16.1 hereof, Lessee shall have the obligation, upon notice given as set forth in paragraph (a) above, to substitute a Substitute Property or, if applicable, invoke the procedure set forth in Article XXI.
(c) If Lessee gives the notice referred to in Section 20.1(a21.1(a) or (b) above, Lessee shall present to Lessor one or more three properties (or groups of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e., an annual return on its equity in such property) substantially equivalent to Lessor’s 's yield from the Leased Property at the time of such proposed substitution (or in the case of substitution because of damage or destruction, the yield immediately prior to such damage or destruction) and as reasonably projected over the remaining Term of this Lease and shall have a Fair Market Value substantially equivalent to the Fair Market Value of the Leased PropertyLease. Lessor shall have a period of 90 days within which to review such information and either accept or reject the Substitute Properties so presented unless Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 Business Days after Lessor’s receipt of said notice (subject to further extension for any period of time in which Lessor is not timely provided with the information provided for in Section 20.2 and Section 20.3 below); provided that if Lessor shall contend that the Substitute Properties fail to meet all the conditions for substitution set forth in this Article XX, including the provisions of Sections 20.1(d), (e) and (f) below, the matter shall be submitted to arbitration in accordance with Article XXXI and the time periods for Lessor’s approval or rejection shall be tolled during the period of such arbitration.
(c) In the event that, on or before the expiration of the applicable time period for Lessor’s review, Lessor has rejected all of the Substitute Properties so presented, then Lessee shall, for a period of 60 days after the expiration of such period, have the right to terminate this Lease as to the Leased Property upon notice to Lessor accompanied by an offer to purchase the Leased Property on the first Payment Date occurring at least 90 days after the date of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Price, and this Lease shall terminate on the purchase date.
(d) L▇▇▇▇▇’s right to offer substitution as set forth in this Article is subject to the conditions set forth in Section 20.2 below, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally, except for “boot” such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is recognized to the Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or (3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee pursuant to any other leases with Lessor of properties hereto or any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-860.
(e) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute Properties) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased Property) as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or destruction), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below; in the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below; provided that neither Lessor nor Lessee shall be obligated to consummate such substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent of said Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “Cash Adjustment”).
(f) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e., annual return on its investment in such Substitute Property) to the Current Yield (and reasonably expected to be received thereafter throughout the Term of this Lease) from the Leased Property, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factors.
(g) The Minimum Repurchase Price of the Substitute Property shall be an amount equal to the Minimum Repurchase Price of the Leased Property (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (e) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (e) above.ninety
Appears in 1 contract
SUBSTITUTION OF PROPERTY FOR THE LEASED PROPERTY. (a) In If, in the event a right or requirement good faith judgment of substitution of Lessee, the Leased Property arises as a result of (i) damage or destruction of the Leased Property as set forth in Article XIII hereof or (ii) a Taking of a portion of the Leased Property as set forth in Section 14.3 hereofbecomes Uneconomic for its Primary Intended Use, or (iii) by reason of eviction or other material interference caused by a claim of paramount title, or for other prudent business reasons, Lessee desires to terminate the discontinuance of the use of the Leased Property as set forth in Section 19.1 hereofLease, Lessee, if no Event at any time prior to the expiration of Default shall have occurred and be continuingthe Term, shall have the right right, subject to the conditions set forth below in this Article XXXXII, upon notice Notice to Lessor, to substitute one or more properties (collectively referred to as “Substitute Properties” or individually as a “Substitute Property”) on a monthly Payment Date specified in such notice Notice (the “Substitution Date”) occurring not less than 90 days one month after such Notice, unless Lessee is required by court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case if Lessee has informed Lessor of the filing of such court or administrative action and kept Lessor reasonably apprised of the status thereof, the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event less than five (5) Business Days after the receipt by Lessor of such noticeNotice. The notice Notice shall be in the form of an Officer’s Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything contained herein to the contrary, any other substitution for the Leased Property shall require the prior written consent of Lessor which shall be within the sole discretion of Lessor.
(b) If Lessee voluntarily or involuntarily for any reason has discontinued use of the Leased Property in its business operations for a period in excess of one year, Lessee shall have the obligation either to substitute a Substitute Property or, if applicable, invoke the procedure set forth in Article XXI.
(c) If Lessee gives the notice Notice referred to in Section 20.1(a22.1(a) or (b) above, Lessee shall present to Lessor one two properties (or more groups of properties), each of which properties (or groups of properties) each shall have an equity value (as defined in Section 22.1(e) hereof) substantially equal to that of which property (or groups of properties) the Leased Property and shall provide Lessor with a yield (i.e., an annual return on its equity in such property) substantially equivalent to Lessor’s yield from the Leased Property at the time of such proposed substitution (or in the case of substitution because of damage or destruction, the equity value and yield immediately prior to such damage or destruction) and as reasonably projected over the remaining Term of this Master Lease and shall have a Fair Market Value substantially equivalent to the Fair Market Value of the Leased PropertyDocument . Lessor shall have a period of 90 thirty (30) days within which to review such information and either accept one or reject both of the Substitute Properties so presented unless Lessee is required by a court order or administrative action to divest or otherwise dispose of the Leased Property within a shorter time period, in which case the time period shall be shortened appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 ten (10) Business Days after Lessor’s actual receipt of said notice Notice (subject to further extension for any period of time in which Lessor is not timely provided with the information provided for in Section 20.2 22.2 and Section 20.3 22.3 below); provided provided, however, that if Lessor shall contend contends that the Substitute Properties fail to meet all the conditions for substitution set forth in this Article XXXXII, including without limitation the provisions of Sections 20.1(d22.1(d), (e) and (f) below, the matter Lessor and Lessee shall be submitted meet and attempt to arbitration in accordance with Article XXXI and the time periods for Lessor’s approval or rejection shall be tolled during the period of such arbitration.
(c) In the event thatresolve their differences. If, on or before the expiration of the applicable time period for Lessor’s review, Lessor has rejected all rejects both of the Substitute Properties so presented, then Lessee shall, for a period of 60 sixty (60) days after the expiration of such period, have the right to terminate this Master Lease Document as to the Leased Property upon notice Notice to Lessor accompanied by an offer to purchase the Leased Property on the first Payment Date occurring at least 90 (90) days after the date of such noticeNotice, as specified in such noticeNotice, for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Rejectable Offer Price, and this Master Lease Document shall terminate on the purchase datedate provided no Event of Default shall have occurred and be continuing. If Lessee exercises its right to terminate this Master Lease Document as provided in the immediately preceding paragraph, Lessor shall, upon receipt from Lessee of the purchase price provided for above and any Rent due and payable hereunder, convey the Leased Property to Lessee on the purchase date in accordance with the provisions of Article XVIII and this Master Lease Document shall thereupon terminate as to the Leased Property. Upon completion of the purchase of the Leased Property, no Rent shall thereafter accrue with respect thereto.
(d) L▇▇▇▇▇Lessee’s right (and obligation) to offer substitution as set forth in this Article is subject to the conditions set forth in Section 20.2 22.2 below, and to the delivery of an opinion of counsel for Lessor confirming that (i) the substitution of the Substitute Property for the Leased Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally, except for “boot” (such as cash needed to equalize exchange values or the discharge of indebtedness), no gain or loss is will be recognized to the by Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 1250(d)(4) or any other Code provision, (iii) the substitution or sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or and (3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with all other substitutions and sales made or requested by Lessee or an Affiliate pursuant to any other leases with Lessor of properties hereto or any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections 856-860.
(e) In the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute Property or group of Substitute Properties) as of the Substitution Date is greater than the equity value of the Leased Property (i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased Property) as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or destruction), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below; in the event that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below; provided that neither Lessor nor Lessee shall be obligated to consummate such substitution if such party would be required to make a payment to the other in excess of an amount equal to ten percent of said Fair Market Value of the Leased Property (the amount of cash paid by one party to the other being hereinafter referred to as the “Cash Adjustment”).
(f) The Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such substitution (i.e., annual return on its investment in such Substitute Property) to the Current Yield (and reasonably expected to be received thereafter throughout the Term of this Lease) from the Leased Property, taking into account the Cash Adjustment paid or received by Lessor and any other relevant factors.
(g) The Minimum Repurchase Price of the Substitute Property shall be an amount equal to the Minimum Repurchase Price of the Leased Property (i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (e) above, or (ii) decreased by any Cash Adjustment paid by Lessee pursuant to paragraph (e) above.
Appears in 1 contract
Sources: Master Lease Agreement (Universal Health Realty Income Trust)