Common use of Internalization Clause in Contracts

Internalization. a. The current intent of the Company Parties, the Advisor and the Investor is to cause the Company to transition to an internal management structure upon the completion of the Second Renewal Term. The parties hereto agree to use their reasonable best efforts to negotiate the terms of such transition during the six month period following the SPA Effective Date. b. Subject to Section 5(d) hereof, effective upon the first day after the end of the Second Renewal Term (the “Internalization Date”), the Company will effect the acquisition of all of the Advisor’s assets that are reasonably necessary for the management and operation of the Company’s business (such acquisition, an “Internalization”), including, but not limited to, the assignment or other transfer to the Company of all of the Advisor’s rights, title and interest in any contracts with third parties that are reasonably necessary for the operation of the Company’s business (the “Contracts”). c. The consideration payable to the Advisor in connection with the Internalization (excluding subordinated performance fee amounts, if any, earned by the Advisor in accordance with Section 3 hereof) will be as follows: (i) if the Internalization Date is not delayed pursuant to Section 5(d)(iii) hereof, the remaining portion of the Maximum Fee Amount not previously paid to the Advisor as of the Internalization Date, or (ii) if the Internalization Date is delayed pursuant to Section 5(d)(iii) hereof, the remaining portion of the Maximum Fee Amount and the Maximum Extension Fee Amount not previously paid to the Advisor as of the Internalization Date. d. Notwithstanding Section 5(a) hereof, the Internalization Date may be delayed as follows: i. If the Company Parties, the Investor and the Advisor agree in writing in advance of such date to delay the Internalization Date, in which case the Internalization Date will be the date agreed upon by the Company Parties, the Investor and the Advisor; ii. If the Company has not completed the employee transition in accordance with the provisions of Section 6 hereof, or has not secured the consents to assignment of the Contracts in accordance with the provisions of Section 7 hereof, in which case the Internalization Date will be the first date upon which all such conditions have been satisfied; or iii. If the Company is unable to obtain the Advisory Consent or any other material third party consents required to consummate the Internalization before the end of the Second Renewal Term, then subject to compliance with the requirements of Section 8.2 of the Charter and Sections 14 and 15 of the Advisory Agreement, the Company and the Advisor will renew the Advisory Agreement for up to two subsequent terms, each to commence on the first day after the end of the immediately preceding term (provided the Company has not by that time obtained the Advisory Consent) and to end on the sooner of (A) the first anniversary of commencement of the term, and (B) the date the Company obtains the Advisory Consent (such terms, the “Third Renewal Term” and “Fourth Renewal Term”). If the Company obtains the Advisory Consent during the Third Renewal Term or the Fourth Renewal Term, the Internalization Date will be the first date after the Company obtains the Advisory Consent.

Internalization. a. The current intent (a) (i) No later than one hundred eighty (180) days prior to the end of the Initial Term and each Renewal Term and (ii) within thirty (30) days after any Internalization Triggering Event, the Advisor shall provide the Company Partieswith an offer for an Internalization Transaction on such terms and conditions to be included in a written offer provided by the Advisor. Upon receipt of the Advisor's initial Internalization Transaction offer, a special committee consisting solely of all Independent Directors willing to serve thereon and who are disinterested with respect to such Internalization Transaction may accept the Advisor's proposal or submit a counter offer to the Advisor. If the Company and the Advisor agree upon an Internalization Price and other terms for an Internalization Transaction pursuant to this Section 16(a), the Parties shall seek to consummate the Internalization Transaction on such terms and in compliance with all applicable laws. In connection therewith, if the Company elects to obtain a fairness opinion from an investment banking firm to the effect that the consideration to be paid by the Company (or the Operating Partnership) for the assets and liabilities and/or equity of the Advisor is fair, from a financial point of view, to holders of the Common Stock who are not affiliated with the Advisor or its Affiliates, the Advisor shall cooperate in good faith to obtain such a fairness opinion. (b) In the event an Internalization Transaction is consummated, at the time of consummation of such Internalization Transaction, all assets and liabilities of the Advisor (or, in the alternative, all of the ownership interests in the Advisor) shall be conveyed to and acquired by the Company in exchange for the Internalization Price, the Company shall succeed to all customer and other relationships then possessed by the Advisor, the Advisor shall undertake all efforts to facilitate the transfer of the Advisor's employees and other service providers to the Company, and the Advisor shall discontinue all business activities. (c) Notwithstanding the foregoing or any other provision in this Agreement to the contrary, if an Internalization Transaction has not been consummated in the manner set forth in this Section 16 prior to the end of the last Renewal Term of this Agreement, then on the last day of the last Renewal Term, the Advisor and the Investor is to cause the Company to transition to shall consummate an internal management structure upon the completion Internalization Transaction effective as of the Second last day of the last Renewal TermTerm in exchange for the Internalization Price. The parties hereto Parties expressly agree to use their reasonable best efforts to negotiate the terms of such transition during the six month period following the SPA Effective Date. b. Subject to Section 5(d) hereof, effective upon the first day after that an Internalization Transaction that is effected at the end of the Second last Renewal Term (of this Agreement shall be in lieu of any termination of this Agreement and the “Internalization Date”)payment of any Termination Fee, it being the express intention of the parties that no Termination Fee shall be payable in the event of expiration of this Agreement at the end of its final Renewal Term and, instead, the Company will effect shall acquire the acquisition of all business of the Advisor’s assets Advisor at that are reasonably necessary time for the management and operation of the Company’s business (such acquisition, an “Internalization”), including, but not limited to, the assignment or other transfer to the Company of all of the Advisor’s rights, title and interest in any contracts with third parties that are reasonably necessary for the operation of the Company’s business (the “Contracts”). c. The consideration payable to the Advisor in connection with the Internalization (excluding subordinated performance fee amounts, if any, earned by the Advisor Price determined in accordance with Section 3 hereof16 of this Agreement. (d) will The Parties mutually agree to execute such additional agreements, documents and instruments, and take such other actions, as may be as follows: (i) if reasonably required to effect the Internalization Date is not delayed pursuant to Section 5(d)(iiiTransaction and convey the Advisor's assets and liabilities (or the equity interests in the Advisor) hereof, the remaining portion of the Maximum Fee Amount not previously paid to the Advisor as Company. (e) The Internalization Price shall consist of a cash component, not to exceed twenty five percent (25%) of the Internalization Date, or (ii) if the Internalization Date is delayed pursuant to Section 5(d)(iii) hereof, the Price. The remaining portion of the Maximum Fee Amount and the Maximum Extension Fee Amount not previously paid to the Advisor as balance of the Internalization Date. d. Notwithstanding Section 5(a) hereofPrice shall be payable solely in the form of either Common Stock or units of limited partnership interest in the Operating Partnership ("LP Units"), in each case, equal to the agreed stock component of the Internalization Date may be delayed as follows: i. If Price, divided by the Company Parties, volume-weighted average of the Investor and closing market price of the Advisor agree in writing in advance Common Stock for the ten (10) consecutive trading days ending on the fifth (5th) day prior to the effective date of such date to delay the Internalization Date, in which case Transaction. Prior to the Internalization Date will be the date agreed upon by the Company Parties, the Investor and the Advisor; ii. If the Company has not completed the employee transition in accordance with the provisions issuance of Section 6 hereof, or has not secured the consents to assignment of the Contracts in accordance with the provisions of Section 7 hereof, in which case the Internalization Date will be the first date upon which all such conditions have been satisfied; or iii. If the Company is unable to obtain the Advisory Consent or any other material third party consents required to consummate the Internalization before the end of the Second Renewal Term, then subject to compliance with the requirements of Section 8.2 of the Charter and Sections 14 and 15 of the Advisory AgreementLP Units, the Company and shall amend the Advisor will renew Operating Partnership Agreement to provide for the Advisory Agreement for up to two subsequent terms, each to commence on the first day after the end appropriate issuance of the immediately preceding term (provided the Company has not by that time obtained the Advisory Consent) and to end on the sooner of (A) the first anniversary of commencement of the term, and (B) the date the Company obtains the Advisory Consent (such terms, the “Third Renewal Term” and “Fourth Renewal Term”). If the Company obtains the Advisory Consent during the Third Renewal Term or the Fourth Renewal Term, the Internalization Date will be the first date after the Company obtains the Advisory ConsentLP Units.