Common use of Permitted Transfers of Interest in Restricted Parties Clause in Contracts

Permitted Transfers of Interest in Restricted Parties. 8.2.1 Notwithstanding anything to the contrary contained in Section 4.2.1, Lender’s consent shall not be required in connection with one (1) or a series of Transfers of up to forty-nine percent (49%) in the aggregate of the direct or indirect ownership interests in any Restricted Party provided that (a) no Event of Default shall have occurred and remain uncured or would occur as a result of such Transfer, (b) such Transfer shall not (i) cause the transferee (together with its Affiliates) to acquire control of any Restricted Party unless such transferee is a Key Principal, (ii) result in any Restricted Party that is as of the Closing Date controlled by a Key Principal no longer being controlled by a Key Principal, or (iii) cause the transferee (together with its Affiliates) to increase its direct or indirect interest in any Restricted Party to an amount which exceeds forty-nine percent (49%) in the aggregate, unless such transferee owned more than forty-nine percent (49%) of the direct or indirect ownership interests in such Restricted Party on the Closing Date or as a result of a Transfer previously made in accordance with the terms and provisions of this Agreement, (c) if at the time of such Transfer the Property is then managed by a Qualified Manager, the Property shall continue to be managed by such Qualified Manager, or by a new Qualified Manager approved by Lender, which approval may be conditioned upon Borrower delivering a Rating Agency Confirmation, if and to the extent applicable, as to such any Replacement Management Agreement and Qualified Manager, (d) after giving effect to such Transfer, Key Principal shall continue to own, directly or indirectly, at least fifty-one percent (51%) of all legal, beneficial and economic interests in each of Borrower and Sole Member, (e) if, immediately following such Transfer, the transferee owns ten percent (10%) or more of the direct or indirect ownership interests in Borrower then, to the extent such transferee did not own ten percent (10%) or more of the direct or indirect ownership interests in Borrower on the Closing Date, Borrower shall deliver, or cause to be delivered, at Borrower’s sole cost and expense, such searches (including credit, negative news, OFAC, litigation, judgment, lien and bankruptcy searches) as Lender may reasonably require with respect to such transferee, its Borrowers and controlling Persons, the results of which must be reasonably acceptable to Lender (unless such transferee, its Borrowers and controlling Persons were previously the subject of searches by Lender which were reasonably acceptable to Lender, in which case Borrower’s obligation to deliver or cause the delivery of such searches under this Section 8.2.1 shall be satisfied to the extent reasonably acceptable updates to such searches are delivered to Lender), and such transferee, its Borrowers and controlling Persons shall otherwise satisfy Lender’s then current applicable underwriting criteria and requirements, (f) Borrower shall give Lender notice of such Transfer together with copies of all instruments effecting such Transfer (or final drafts thereof with signed copies to follow upon the effect date of such transfer) and the organizational documents of the transferee and its constituent parties reasonably required by Lender not less than ten (10) days prior to the date of such Transfer (unless such Transfer occurs as the result of the death or incapacity of a natural person, in which event such notice shall be given not less than twenty (20) days after the date of such Transfer), and (g) the legal and financial structure of Borrower and its stockholders, members or partners, as applicable, and the single purpose nature and bankruptcy remoteness of Borrower and its stockholders, members or partners, as applicable, after such Transfer, shall satisfy Lender’s then current applicable underwriting criteria and requirements. Notwithstanding anything in this Section 8.2.1 to the contrary, and without limiting any of the foregoing requirements of this Section 8.2.1, if after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect ownership interests in any Restricted Party are owned by any Person (together with its Affiliates) that owned less than forty-nine percent (49%) of the direct or indirect ownership interests in such Restricted Party as of the Closing Date or as a result of a Transfer previously made in accordance with the terms and provisions of this Agreement, then Borrower shall, prior to the effective date of any such Transfer, deliver (or cause to be delivered) to Lender a Rating Agency Confirmation. As used in this Section 8.2.1, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of such Person, whether through ownership of voting securities, by contract or otherwise and the term “controlled” and “controlling” shall have correlative meanings.

Permitted Transfers of Interest in Restricted Parties. 8.2.1 Notwithstanding anything to the contrary contained in Section 4.2.1, Lender’s consent shall not be required in connection with one (1) or a series of Transfers of up to forty-nine percent (49%) in the aggregate of the direct or and indirect ownership interests in any Restricted Party provided shall be prohibited until such time as the Obligations shall be paid and performed in full in accordance with the terms of this Agreement. Notwithstanding the previous sentence, the following Transfers, whether of equity interests or management rights, shall be permitted, upon prior written notice to Lender (provided, however, that failure to give notice will not trigger personal liability under Section 11.22), but without Lender’s consent: (a) no Event Transfers of Default shall have occurred direct and remain uncured or would occur as a result of such Transfer, (b) such Transfer shall not (i) cause the transferee (together with its Affiliates) to acquire control of any Restricted Party unless such transferee is a Key Principal, (ii) result indirect interests in any Restricted Party that is as of the Closing Date controlled by (other than a Key Principal no longer being controlled by a Key Principal, or (iii) cause the transferee (together with its Affiliates) to increase its direct or indirect interest in any Senior Borrower) or any constituent entities owning an interest (directly or indirectly) in a Restricted Party to an amount which exceeds forty-nine percent (49%) in the aggregate, unless such transferee owned more than forty-nine percent (49%) of the direct or indirect ownership interests in such another Restricted Party on the Closing Date (other than Senior Borrower, Borrower or Affiliated Manager) or to Immediate Family Members of a Restricted Party (or entities or trusts controlled by Immediate Family Members) as a result of a Transfer previously made in accordance with the terms and provisions death, disability or incapacitation or for estate planning purposes; (b) Transfers of this Agreement, (c) if at the time of such Transfer the Property is then managed by a Qualified Manager, the Property shall continue to be managed by such Qualified Manager, or by a new Qualified Manager approved by Lender, which approval may be conditioned upon Borrower delivering a Rating Agency Confirmation, if and to the extent applicable, as to such any Replacement Management Agreement and Qualified Manager, (d) after giving effect to such Transfer, Key Principal shall continue to own, directly or indirectly, at least fifty-one percent (51%) of all legal, beneficial and economic interests in each of Borrower and Sole Member, (e) if, immediately following such Transfer, the transferee owns ten percent (10%) or more of the direct or indirect ownership interests in Borrower then, to the extent such transferee did not own ten percent (10%) or more of the direct or indirect ownership interests in Borrower on the Closing Date, Borrower shall deliver, or cause to be delivered, at Borrower’s sole cost and expense, such searches (including credit, negative news, OFAC, litigation, judgment, lien and bankruptcy searches) as Lender may reasonably require with respect to such transferee, its Borrowers and controlling Persons, the results of which must be reasonably acceptable to Lender (unless such transferee, its Borrowers and controlling Persons were previously the subject of searches by Lender which were reasonably acceptable to Lender, in which case Borrower’s obligation to deliver or cause the delivery of such searches under this Section 8.2.1 shall be satisfied to the extent reasonably acceptable updates to such searches are delivered to Lender), and such transferee, its Borrowers and controlling Persons shall otherwise satisfy Lender’s then current applicable underwriting criteria and requirements, (f) Borrower shall give Lender notice of such Transfer together with copies of all instruments effecting such Transfer (or final drafts thereof with signed copies to follow upon the effect date of such transfer) and the organizational documents of the transferee and its constituent parties reasonably required by Lender not less than ten (10) days prior to the date of such Transfer (unless such Transfer occurs as the result of the death or incapacity of a natural person, in which event such notice shall be given not less than twenty (20) days after the date of such Transfer), and (g) the legal and financial structure of Borrower and its stockholders, members or partners, as applicable, and the single purpose nature and bankruptcy remoteness of Borrower and its stockholders, members or partners, as applicable, after such Transfer, shall satisfy Lender’s then current applicable underwriting criteria and requirements. Notwithstanding anything in this Section 8.2.1 to the contrary, and without limiting any of the foregoing requirements of this Section 8.2.1, if after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect ownership interests in any Restricted Party are owned (other than a direct interest in any Senior Borrower) or any constituent entities owning an interest (directly or indirectly) in a Restricted Party among the Sole Member entities and/or Transfers of interests in any Restricted Party (other than a direct interest in any Senior Borrower) or any constituent entities owning an interest (directly or indirectly) in a Restricted Party among a Restricted Party and/or any owner(s) of a Sole Member entity (including, without limitation, the redemption of an owner of a Sole Member entity); and (c) Transfers of interests by any Person parties not affiliated with the Guarantors, owning a seven and one-half (together with its Affiliates) that owned less than forty-nine percent (497.5%) percent or less interest directly or indirectly in Borrower (the “Unrelated Owners”) and which Transfers will not cause any change in control of Borrower; provided, however, that the Unrelated Owners are not permitted to be the transferee of any transfer permitted by subsections (a) and (b) above. Furthermore, any Transfer with respect to Affiliated Manager, even if qualifying under (a), (b) or (c) above, shall not be permitted if it would (x) cause a change in the management provisions of the direct operating agreement for Rudgate Manager, LLC, including the provision on the succession of management rights in the events of death, disability or indirect ownership interests like events, or (y) cause a change in such Restricted Party the managers of Rudgate Manager, LLC, other than as set forth as of the Closing Date or date hereof in the operating agreement of Rudgate Manager, LLC. Further, Senior Borrower and Affiliated Manager shall not acquire an ownership interest in any Restricted Party. Borrower shall provide to Lender copies of all notices and information required to be furnished to Senior Lender with respect to such Transfers, as a result and when delivered to Senior Lender. In addition, in the event of a Transfer previously made in accordance with the terms and provisions violation of this Agreement, then Borrower shall, prior shall have thirty (30) days after becoming aware of such Transfer to the effective date of any cause such Transfer, deliver (or cause Transfer to be delivered) to Lender a Rating Agency Confirmation. As used in this Section 8.2.1rescinded, the term “control” means the possessionrevoked, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of such Person, whether through ownership of voting securities, by contract annulled or otherwise cured and in no event shall a Default be deemed to have occurred hereunder for such Transfer in violation of this Agreement or any liability under Section 11.22 hereof arise if cured within such thirty (30) day period. Notwithstanding anything set forth above, no Transfer shall be permitted under this Agreement if it is otherwise prohibited by the term “controlled” and “controlling” Senior Loan Documents, provided, however that a Transfer prohibited by the Senior Loan Documents, but permitted under this Agreement shall have correlative meaningsnot trigger personal liability under Section 11.22.