NYT » Topics » CONDITIONS

This excerpt taken from the NYT 10-Q filed Nov 3, 2006.

CONDITIONS

1

 

a.

 

The value of the ownership interests in the REIT or in the partnership or corporation controlled by the REIT received by the grantor as consideration for the transaction must be equal to 40 percent or more of the excess of the value of the total consideration received over the amount of mortgages and other liens and encumbrances on the property or on the grantor’s economic interest in the property, other than mortgages and other liens and encumbrances created in contemplation of the formation of the REIT.

 

 

 

 

 

 

 

b.

 

This condition is the same as Condition 1(a), except that the value of the ownership interests received as consideration must be equal to at least 50 percent rather than 40 percent of the excess of the total consideration received over mortgages and other liens and [ILLEGIBLE] on the property or economic interest transferred excluding mortgages and other liens or encumbrances created in contemplation of the transaction reported on this Schedule

 

 

 

 

 

 

 

Use the worksheet on the following page of this Schedule to make this determination.

 

2.

 

The interests in the REIT or in the partnership or corporation controlled by the REIT may not be transferred by the grantor owners of the grantor within two years following the date of [ILLEGIBLE]  transaction other than transfers within the two-year period resulting from the death of an individual grantor or owner of a grantor.

 

 

 

 

 

3.

 

At least 75 percent of the cash proceeds of the initial public offering of REIT shares must be used for the following:

 

 

 

 

 

 

 

a.

 

payments on loans secured by an interest in the real property or an economic interest therein owned directly or indirectly by the REIT, or payments into reserves therefore

 

 

 

 

 

 

 

b.

 

capital improvements to real property owned directly or indirectly by the REIT, or payments into reserves therefore

 

 

 

 

 

 

 

c.

 

brokerage fees and commissions, professional fees and payments to or on behalf of a tenant as an inducement to enter into a lease or sublease of real property owned directly or indirectly by the REIT, or payments into [ILLEGIBLE] therefor; or

 

 

 

 

 

 

 

d.

 

payments to acquire real property or an economic interest therein other than an acquisition that would qualify as a REIT Transfer without regard to this condition 3.

 

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