Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property. (b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent. (c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof. (d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies). (e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions: (i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer; (ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes; (iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender; (iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender; (v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer; (vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender; (vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender; (viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender; (ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender; (x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender. (xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances; (xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and (xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation. (f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 3 contracts
Sources: Commercial Loan Agreement (Red Oak Capital Fund IV, LLC), Commercial Loan Agreement (Red Oak Capital Fund IV, LLC), Commercial Loan Agreement (Red Oak Capital Fund IV, LLC)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower Stockholder shall not, and shall not permit (i) directly or indirectly offer, sell (including short sales), transfer, tender, assign, exchange, pledge, encumber or otherwise dispose of (including by gift, merger or operation of law) (collectively, “Transfer”), or enter into any Restricted Party contract, option, derivative, hedging, swap, forward or other agreement, understanding or other arrangement (including any profit sharing arrangement) with respect to do a Transfer of, any of the following (collectivelyCompany Shares, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including therein, to any of its rightsPerson, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan voting arrangement, whether by proxy, voting agreement or otherwise, with respect to any of divisionthe Subject Shares, (iii) grant any proxies or dividepowers of attorney with respect to any or all of the Subject Shares, establish a protected series, create a new registered series, (iv) agree to divest itself of any voting rights in the Subject Shares or convert (v) commit or agree to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for take any of the foregoing without Lender's prior written consent.
actions. Stockholder agrees that any Transfer of Subject Shares not permitted hereby shall be null and void ab initio and that any such prohibited Transfer may and should be enjoined. If any involuntary Transfer of any of the Company Shares shall occur (c) A Transfer including, but not limited to, a sale by Stockholder’s trustee in any bankruptcy, or a sale to a purchaser at any creditor’s or court sale), the transferee (which term, as used herein, shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing and all or a substantial part transferees and subsequent transferees of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title initial transferee) shall take and interest in and hold such Company Shares subject to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge all of the partnership interest of restrictions, liabilities and rights under this Agreement, which shall continue in full force and effect for the Term. The Company agrees that if Stockholder attempts to Transfer, vote or provide any general partner or other Person with the authority to vote any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) Company Shares other than in accordance strict compliance with Section 5.1.22 hereof.
(d) Notwithstanding this Agreement, the provisions of this Section 5.2.10, Lender’s consent Company shall not be required in connection with one (x) permit any such Transfer on the Company’s books and records, (y) issue a new certificate or a series of Transfers, of not more than ten percent (10%) instrument representing any of the stock, the limited partnership interests Company Shares or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no permit any book entries for any such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness Company Shares that are in a manner which is not acceptable to Lender;
uncertificated form or (ixz) Transferee record such vote, in each case, unless and Transferee’s Principals must be able to satisfy all until Stockholder shall have complied with the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 terms of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 3 contracts
Sources: Investment and Transaction Agreement (Id Systems Inc), Voting and Support Agreement (Id Systems Inc), Voting and Support Agreement (Emancipation Management LLC)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 3 contracts
Sources: Commercial Loan Agreement (Red Oak Capital Fund V, LLC), Commercial Loan Agreement (Red Oak Capital Fund V, LLC), Commercial Loan Agreement (Red Oak Capital Fund V, LLC)
Transfers. Unless such action is permitted by the provisions of this Section 5.2.13, Borrower agrees that it will not (ai) Borrower acknowledges that Lender has examined and relied on the experience sell, assign, convey, transfer or otherwise dispose of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners interests in owning and operating properties such as the Property or any part thereof, (ii) permit any owner, directly or indirectly, of an ownership interest in agreeing the Property, to make transfer such interest, whether by transfer of stock or other interest in Borrower or any entity, or otherwise, (iii) incur Indebtedness (other than the LoanIndebtedness permitted pursuant to the terms of this Agreement), and will continue to rely on Borrower’s ownership and control of (iv) mortgage, hypothecate or otherwise encumber or grant a security interest in the Property as or any part thereof, (v) sell, assign, convey, transfer, mortgage, encumber, grant a means security interest in, or otherwise dispose of maintaining any direct or indirect ownership interest in Borrower, or permit any owner of an interest in Borrower to do the value same, or (vi) file a declaration of condominium with respect to the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyforegoing transactions, a “Transfer”): ). For purposes hereof, a “Transfer” shall not include (iA) sellany issuance, conveysale or transfer of interests in Sole Member or any successor entity resulting from any merger permitted hereunder, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, (B) a transfer by devise or otherwise transfer descent or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law upon the death of a member or otherwise, and whether or not for consideration or partner of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted TransfersBorrower, or (iiiC) enter into the merger of the Sole Member with any plan of divisionthe following entities: Inland Retail Real Estate Trust, Inc., a Maryland corporation, Inland Real Estate Corporation, a Maryland corporation, Inland Real Estate Investment Corporation, a Delaware corporation, Inland Western Retail Real Estate Trust, Inc., a Maryland corporation, any other real estate investment trust sponsored by Inland Real Estate Investment Corporation, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or any other entity or provide in its operating agreement for composed entirely of any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred transfer and, in connection with a merger hereinabove described, the net worth of the entity surviving the merger shall not be less than the net worth of the Sole Member immediately prior to such Transfers merger and the entity surviving the merger shall be publicly traded.
(a) On and after the Closing Date, Lender shall not withhold its consent to a Transfer of the Property, as part of a single transaction, provided that the following conditions are satisfied:
(1) the transferee of the Property shall be a Special Purpose Entity (the “Transferee”) which at the time of such transfer will be in compliance with the covenants contained in Section 5.1.1 and the representations contained in 4.1.30 hereof and which shall have assumed in writing (subject to the terms of Section 9.4 hereof) and agreed to comply with all the terms, covenants and conditions set forth in this Loan Agreement and the other Loan Documents, expressly including the covenants contained in Section 5.1.1 and the representations contained in 4.1.30 hereof;
(2) if requested by Lender’s counsel fees , Borrower shall deliver confirmation in writing from the Rating Agencies that such proposed Transfer will not cause a downgrading, withdrawal or qualification of the then current rating of any securities issued pursuant to such Securitization;
(3) if Manager does not act as manager of the transferred Property then the manager of the Property must be a Qualifying Manager;
(4) no Event of Default shall have occurred and disbursements and be continuing;
(5) if required or requested by any fees and expenses of the Rating Agencies)., Borrower shall have caused counsel to render a substantive non-consolidation opinion which in each case may be relied upon by the holder of the Note, the Ratings Agencies and their respective counsel, agents and representatives with respect to the proposed transaction, including the Transferee, which opinion shall be acceptable to Lender in its reasonable discretion;
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i6) Borrower shall pay Lender a transfer have paid (A) an assumption fee equal to one percent (11.0%) of the then outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferLoan, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants the reasonable and legal opinions reasonably required by Lender;
customary third-party expenses (xincluding reasonable attorneys’ fees and disbursements) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses actually incurred by Lender in connection with the Additional Permitted such Transfer; provided, whether or not consummated; however,
(FA) once the Additional Permitted no assumption fee shall be required for a Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish a Transferee acceptable to Lender copies of any documentation executed in connection with a joint venture between Sole Member and an entity acceptable to Lender, provided Sole Member or an Affiliate wholly-owned (directly or indirectly) by Sole Member owns at least ten percent (10%) of the Additional Permitted Transfer promptly after execution thereof; ownership interests in such Transferee and for which Sole Member or an Affiliate wholly owned (Hdirectly or indirectly) Borrower shall have delivered satisfactory evidence to Lender by Sole Member, is the managing entity and otherwise maintains operational and managerial control of such Transferee, and Inland American Real Estate Trust, Inc. remains as Indemnitor, provided that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions pay all of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.reasonable and customary third-party expenses (including reasonable attorneys’ fees and
Appears in 3 contracts
Sources: Loan Agreement (Inland American Real Estate Trust, Inc.), Loan Agreement (Inland American Real Estate Trust, Inc.), Loan Agreement (Inland American Real Estate Trust, Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners owners, as applicable, in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Properties as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other ObligationsObligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) any of the Property Properties or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an any interest in any Restricted PartyParty (any of the actions in the foregoing clauses (i) or (ii), a “Transfer”), other than (A) Transfers pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 hereof, and (B) Transfers that are Permitted Transfers, or (iiiTransfers in accordance with Section 5.2.10(g) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consenthereof.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell any of the Property Property, or any part thereof thereof, for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part substantially all of any of the Property Properties for other than actual occupancy by a space Tenant thereunder tenant thereunder, or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, but subject to the terms and conditions set forth below in clause (g) of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of Transfers of: (i) direct or indirect interests in Borrower among the Sponsors and any Sponsor Controlled Parties; (ii) not more than ten forty-nine percent (1049%) of the direct or indirect stock, general partnership interests, the limited partnership interests, the managing member interests or non-managing membership interests (as the case may be) in a Borrower, Principal or any other Restricted Party; provided(iii) the sale, however, no such Transfer shall result transfer or issuance of stock in the Change of Control in a any Restricted Party so long as such stock is listed on the New York Stock Exchange or cause another nationally or internationally recognized stock exchange; or (iv) direct or indirect interests in Borrower for estate planning purposes by any Key Principal Sponsor to no longer the spouse, child, parent, grandparent, grandchild, niece, nephew, aunt or uncle of such Sponsor, or to a trust for the benefit of such Sponsor or for the benefit of the spouse, child, parent, grandparent, grandchild, niece, nephew, aunt or uncle of such Sponsor. Furthermore, subject to the terms and conditions set forth in clause (g) of this Section 5.2.10, Lender’s consent shall not be required in connection with a Key Principal of Borrower, and as a condition to each such Sponsor Transfer, .
(e) Lender shall receive not less than be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon a Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
(f) There shall be no assumption of the Loan during the period that is thirty (30) days prior to and continuing until thirty (30) days following the Securitization of any portion of the Loan. Other than as set forth in the preceding sentence, Borrower shall have the right to unlimited Transfers of all of the Properties (and not a portion thereof) with Lender’s consent, not to be unreasonably withheld, provided no Event of Default has occurred and is continuing, and Lender receives thirty (30) days’ prior written notice of such proposed Transfer. Borrower shall pay any Transfer and all reasonable outa non-of-pocket costs and expenses incurred in connection with such Transfers (including refundable application fee of $5,000 at the time Lender’s counsel fees consent is sought, and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one half of one percent (1.5%) of the outstanding principal balance of the Loan Outstanding Principal Balance at the time of such transferTransfer (for the avoidance of doubt, this transfer fee shall not apply in the case of a Sponsor Transfer);
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes, servicer costs and fees and the fees and expenses of the Approved Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning the creditworthiness, reputation and operating properties similar in location, size, class and operation qualifications to the Property, which expertise shall be reasonably determined by Lender’s reasonable satisfaction;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.355.1.23, 5.1.23 5.2.9 and 5.2.9 of this Agreement5.2.12 hereof, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, agreements and covenants and legal opinions reasonably required by Lender;
(x) Each Approved Rating Agency shall have issued a Rating Agency Confirmation with respect to such Transfer;
(xi) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender and each Approved Rating Agency;
(xii) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and the Environmental Indemnity executed by Guarantor or shall execute a replacement guaranty and environmental indemnity in form and substance reasonably satisfactory to Lender.;
(xixiii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property Properties and naming the Transferee as owner of the PropertyProperties, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property Properties shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xiixiv) If applicablerequired under the terms hereof, the Property shall be managed by a Qualified Manager pursuant to a Replacement Management Agreement; and
(xiiixv) The Property meets Immediately upon a Transfer to such Transferee and the satisfaction of all of the Lender’s underwriting standards related to its financial conditionabove requirements, cash flow, operating income, physical condition, management the named Borrower and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor herein shall be released from all liability under this Agreement, the Note, the applicable Security Instrument and the other Loan Documents accruing after such Transfer. The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to provide written evidence thereof reasonably requested by Borrower.
(g) Notwithstanding anything to the contrary in this Agreement or any guaranty or indemnity agreement by virtue other Loan Documents, each Permitted Transfer shall be conditioned upon: (i) no such Transfer resulting in the change of Control in Borrower such that a Sponsor Controlled Party does not Control each of Borrower, any Affiliated Manager, and any Principal and the day-to-day operation of the Additional Property, (ii) other than a Transfer pursuant to clause (d)(iii) above, Lender receiving not less than thirty (30) days’ prior notice of such Transfer (or in the case of any Transfer pursuant to clause (a) or (b) set forth herein in the definition of “Permitted Transfer; ”, Lender receiving notice within thirty (D30) days of any such Transfer), (iii) if a Manager is required under Section 5.1.22, the Property continuing to be managed by Affiliated Manager or a Qualified Manager approved in accordance with the terms and conditions hereof, (iv) Sponsor continuing to directly or indirectly own at least a 20% equity interest in each of Borrower and any Principal both prior to and after such Transfer, (v) other than a Transfer pursuant to clause (d)(iii) above, each proposed transferee (A) remaking the representations contained herein applicable to such proposed transferee, including those relating to Special Purpose Entity requirements, ERISA matters, the USA Patriot Act, OFAC and matters concerning Embargoed Persons and (B) satisfying, to Lender’s satisfaction, Lender’s “know your customer” requirements relating to the creditworthiness, reputation, background and qualifications of such proposed transferee, provided, however, that Lender’s “know your customer” requirements will not apply if such proposed transferee owns or will own less than a ten percent (10%) direct or indirect interests in Borrower, (vi) such Transfer being permitted under the terms of the REA, and (vii) other than in the case of any Transfer pursuant to clause (a) or (b) set forth herein in the definition of “Permitted Transfer” or a Transfer pursuant to clause (d)(iii) above, no Event of Default continuing on the date such Transfer occurs and on the day after such Transfer occurs. Upon request from Lender, Borrower shall be responsible for promptly provide Lender a revised version of the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by organizational chart delivered to Lender in connection with the Additional Loan reflecting any Permitted Transfer consummated in accordance with this Section 5.2.10. If after giving effect to any such Transfer, whether more than forty-nine percent (49%) in the aggregate of direct or not consummated; indirect interests in Borrower are owned by any Person and its Affiliates that owned less than forty-nine percent (F49%) once the Additional Permitted Transfer is complete, the persons with Control of direct or indirect interest in Borrower and management as of the Property are the same persons who have such Control and management rights immediately Closing Date, Borrower shall, no less than thirty (30) days prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies effective date of any documentation executed in connection with the Additional Permitted such Transfer promptly after execution thereof; and (Hother than a Transfer pursuant to clause (d)(iii) Borrower shall have delivered satisfactory evidence above), deliver to Lender that, following an Additional Insolvency Opinion acceptable to Lender and the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous TransferRating Agencies.
Appears in 2 contracts
Sources: Loan Agreement (Global Medical REIT Inc.), Loan Agreement (Global Medical REIT Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners owners, as applicable, in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other ObligationsObligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an any interest in any Restricted PartyParty (any of the actions in the foregoing clauses (i) or (ii), a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 hereof and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property Property, or any part thereof thereof, for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part substantially all of the Property for other than actual occupancy by a space Tenant thereunder tenant thereunder, or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in connection with one order to declare the Debt immediately due and payable upon a Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or a series of Transfersnot, of or whether or not more than ten percent Lender has consented to any previous Transfer.
(10%e) There shall be no assumption of the stock, Loan during the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than period that is thirty (30) days prior to and continuing until thirty (30) days following the Securitization of any portion of the Loan. Other than as set forth in the preceding sentence, Borrower shall have the right to unlimited Transfers of the Property with Lender’s consent, not to be unreasonably withheld, provided no Event of Default has occurred and is continuing, and Lender receives thirty (30) days’ prior written notice of such proposed Transfer. Borrower shall pay any Transfer and all reasonable outa non-of-pocket costs and expenses incurred in connection with such Transfers (including refundable application fee of $5,000 at the time Lender’s counsel fees consent is sought, and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time Outstanding Principal Balance upon completion of such transferTransfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Approved Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning the creditworthiness, reputation and operating properties similar in location, size, class and operation qualifications to the Property, which expertise shall be reasonably determined by Lender’s reasonable satisfaction;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth Net Worth and liquidity Liquid Assets reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.355.2.9, 5.1.23 5.2.12 and 5.2.9 of this Agreement5.2.13 hereof, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, agreements and covenants and legal opinions reasonably required by Lender;
(x) Each Approved Rating Agency shall have issued a Rating Agency Confirmation with respect to such Transfer;
(xi) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender and each Approved Rating Agency;
(xii) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and the Environmental Indemnity executed by Guarantor or shall execute a replacement guaranty and environmental indemnity in form and substance reasonably satisfactory to Lender.;
(xixiii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted EncumbrancesEncumbrances and such other matters permitted under the terms of this Agreement or otherwise approved by Lender in writing;
(xiixiv) If applicable, the The Property shall be managed by a Qualified Manager pursuant to a Replacement Management Agreement; and
(xiiixv) The Property meets Immediately upon a Transfer to such Transferee and the satisfaction of all of the Lender’s underwriting standards related above requirements, the named Borrower and Guarantor herein shall be released from all liability under this Agreement, the Note, the Security Instrument and the other Loan Documents accruing after such Transfer. The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to its financial condition, cash flow, operating income, physical condition, management and operationprovide written evidence thereof reasonably requested by Borrower.
(f) Notwithstanding any provision From and after the four (4) month anniversary of the Closing Date, in this Section 5.2.10 addition to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application Transfers of the fee set forth in Section 5.2.10(e)(i): Property contemplated by the preceding clause (e) the initial Borrower shall have the right to contemporaneously Transfer all of the Property to a Successor Borrower that will assume all of the obligations of Borrower hereunder and under the other Loan Documents (an “Affiliate Assumption”), provided no Event of Default or monetary Default is then continuing or would result therefrom and the following conditions are met to the reasonable satisfaction of Lender:
(i) among limited partners or memberssuch Successor Borrower shall have executed and delivered to Lender an assumption agreement (including an assumption of the Security Instrument in recordable form, if requested by Lender), in form and substance reasonably acceptable to Lender, evidencing its agreement to abide and be bound by the terms of the Loan Documents and containing representations substantially equivalent to those contained in Article IV (REPRESENTATIONS AND WARRANTIES) (recast, as applicablenecessary, of Borrower who such that representations that specifically relate to Closing Date are limited partners or members, as applicable, of Borrower remade as of the date of this Agreement (each a “Current Owner”such assumption), and such other representations (and evidence of the accuracy of such representations) as Lender shall reasonably request;
(ii) to immediate family members (which such Uniform Commercial Code financing statements as may be reasonably requested by Lender shall be limited filed;
(iii) a Person satisfactory to Lender in its sole discretion assumes all obligations, liabilities, guarantees and indemnities of Key Principal and any other guarantor under the Loan Documents pursuant to documentation satisfactory to Lender (and upon such assumption by such Person, Key Principal and any other such guarantor shall be released from such obligations, liabilities, guarantees and indemnities);
(iv) such Successor Borrower shall have delivered to Lender legal opinions of counsel reasonably acceptable to Lender that are equivalent to the opinions delivered to Lender on the Closing Date; and Borrower and the Successor Borrower shall have delivered such other documents, certificates and legal opinions, including relating to REMIC matters, as Lender shall reasonably request;
(v) such Successor Borrower shall have delivered to Lender all documents reasonably requested by it relating to the existence of such Successor Borrower and the due authorization of the Successor Borrower to assume the Loan and to execute and deliver the documents described in this Section, each in form and substance reasonably satisfactory to Lender, including a spousecertified copy of the applicable resolutions from all appropriate persons, parentcertified copies of the organizational documents of the Successor Borrower, child together with all amendments thereto, and grandchild certificates of good standing or existence for the Successor Borrower issued as of a recent date by its state of organization and each other state where such entity, by the nature of its business, is required to qualify or register;
(eachvi) the Title Insurance Policy shall have been properly endorsed to reflect the Transfer of the Property to the Successor Borrower;
(vii) the Rating Condition shall have been satisfied;
(viii) the proposed Qualified Equityholders must have the creditworthiness, reputation and qualifications to Lender’s reasonable satisfaction;
(ix) Successor Borrower and each Qualified Equityholder shall, as of the date of such transfer, have an aggregate Net Worth and Liquid Assets reasonably acceptable to Lender;
(x) Successor Borrower, each Qualified Equityholder and all other entities which may be owned or Controlled directly or indirectly by each Qualified Equityholder (“Immediate Family MemberRelated Entities”))) must not have been party to any bankruptcy proceedings, of any Current Owner voluntary or to trusts formed involuntary, made an assignment for the benefit of Immediate Family Members creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(xi) There shall be no material litigation or regulatory action pending or threatened against Successor Borrower, each Qualified Equityholder or Related Entities which is not reasonably acceptable to Lender;
(xii) Successor Borrower, each Qualified Equityholder and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(xiii) The Property shall be managed by Manager pursuant to the Management Agreement or by a Qualified Manager pursuant to a Replacement Management Agreement; and
(xiv) If the Successor Borrower is a Person described in clause (ii) or (iii) of paragraph 2 of the definition of Qualified Equityholder, Borrower shall have paid to Lender a nonrefundable assumption fee in an amount equal to $5,000, and Borrower shall have reimbursed Lender for all reasonable out-of-pocket costs and expenses incurred in connection with such Current Owner for bona fide estate planning purposes Affiliate Assumption (eachincluding, an “Additional Permitted Transfer”)without limitation, provided each Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes and the fees and expenses of satisfying the Rating Condition pursuant to clause (vii) above.
(g) No direct or indirect equity interests in Borrower (other than as permitted in clause (h)(i) below) shall be conveyed or otherwise transferred to any Person, unless the following conditions is are satisfied: :
(Ai) no Default or Event of Default has occurred or monetary Default shall be continuing at the time of such conveyance or transfer;
(ii) no Prohibited Change of Control or Prohibited Pledge shall occur as a result thereof;
(iii) if any such conveyance or transfer results in Borrower ceasing to be Controlled by Key Principal (and is continuing; (B) Lender has received Borrower’s notice in connection with each subsequent conveyance or transfer that again changes the identity of the Additional Permitted Transfer no less than 30 days prior Qualified Equityholder that Controls Borrower), Borrower shall have paid to Lender a transfer fee in an amount equal to 0.5% of the commencement Outstanding Principal Balance at the time of such conveyance or transfer; ;
(Civ) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; intentionally omitted;
(Dv) Borrower shall be responsible for have paid the costs and expenses (if any) of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Rating Agencies and Servicers and reimbursed Lender for all actual its reasonable out-of-pocket costs and expenses incurred by Lender in connection with any such conveyance or transfer;
(vi) no such sales or transfers shall be to an Embargoed Person;
(vii) to the Additional Permitted Transferextent such transferee owns ten percent (10%) or more of the direct or indirect interests in such Restricted Party immediately following such Transfer (provided such transferee did not own 10% or more of the direct or indirect ownership interests in Borrower as of the Closing Date), whether or not consummated; Borrower shall deliver, at Borrower’s sole cost and expense, customary searches (Fcredit, judgment, lien, etc.) once with respect to each such transferee, which such search results shall be reasonably acceptable to Lender;
(viii) either (a) the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are remains unchanged or (b) a replacement manager is appointed pursuant to Section 5.1.22 of this Agreement;
(ix) the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions terms of Section 4.1.31 hereof. 4.1.30 hereof after such Transfer; and
(x) Lender shall not be required have received thirty (30) days advance written notice of such conveyance or transfer.
(h) Notwithstanding anything to demonstrate any actual impairment of its security or any increased risk of default hereunder the contrary contained in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.Loan Do
Appears in 2 contracts
Sources: Loan Agreement (Inland Diversified Real Estate Trust, Inc.), Loan Agreement (Inland Diversified Real Estate Trust, Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on Unless such action is permitted by the experience provisions of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.105.2.13, Borrower shall not, and shall will not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, assign, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, transfer or otherwise transfer or dispose of legal or beneficial interests in all or any of the Properties or any part thereof, (ii) permit any owner, directly or indirectly, voluntarily of a beneficial ownership interest in the Properties, to transfer such interest, whether by transfer of stock or involuntarilyother beneficial interest in Borrower or any entity, by operation of law or otherwise, and whether (iii) incur Indebtedness, (iv) mortgage, hypothecate or otherwise encumber or grant a security interest in all or any of the Properties or any part thereof, (v) sell, assign, convey, transfer, mortgage, encumber, grant a security interest in, or otherwise dispose of any legal or beneficial ownership interest in Borrower, or permit any owner of a legal or beneficial interest in Borrower to do the same, or (vi) file a declaration of condominium with respect to the Properties (any of the foregoing transactions, a "Transfer").
(a) Lender shall not for consideration or unreasonably withhold its consent to a Transfer all of record) the Property Properties or any part thereof or any legal or beneficial interest therein or any interest provided that the following conditions are satisfied:
(1) all of Borrower the Properties shall be beneficially owned by a Single Purpose Entity which at the time of such transfer will be in compliance with the covenants contained in Section 5.1.1 and the representations contained in 4.1.30 hereof and which has assumed in writing (subject to the terms of Section 9.4 hereof) and agreed to comply with all the terms, covenants and conditions set forth in this Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents, expressly including the covenants contained in Section 5.1.1 and the representations contained in 4.1.30 hereof;
(2) such Single Purpose Entity shall be, or shall be "controlled" by, the REIT, The Inland Group, Inc. or a wholly-owned subsidiary of The Inland Group, Inc. (ii"control" meaning, for purposes of this clause (2) permit and Section 5.2.13), primary responsibility to make all material decisions with respect to the operation, management, financing and disposition of the Property, directly or indirectly, whether through ownership of voting securities or other beneficial interests, by contract or otherwise, rather than a Sale beneficial ownership requirements, and without being compromised by the fact that responsibility for such day to-day operating and management functions as are ordinarily handled by a property manager or Pledge of an interest in any Restricted Party, other than (A) leasing activities have been delegated by such controlling Person pursuant to Leases of space an agreement in writing); provided, however, that in the Improvements event of a Securitization, the requirements of this paragraph (2) shall not apply to Tenants the extent that the Rating Agencies confirm in accordance writing that non-compliance with the provisions of Section 5.1.20 and (B) Permitted Transferssuch requirements will not cause a downgrading, withdrawal or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any qualification of the foregoing without Lender's prior written consentthen current rating of any securities issued pursuant to such Securitization.
(c3) A Transfer if Manager does not act as manager of the Properties, then the manager of the Properties must be a Qualifying Manager;
(4) no Event of Default shall include have occurred and be continuing;
(i5) an installment sales agreement wherein Borrower agrees has caused counsel to sell render a non-consolidation opinion which may be relied upon by the Property or any part thereof for holder of the Note, the Ratings Agencies and their respective counsel, agents and representatives with respect to the proposed transactions, including the transferee, which opinion shall be reasonably acceptable to Lender; and
(6) Borrower shall have paid the reasonable and customary third-party expenses (including attorney's fees and disbursements) actually incurred by Lender in connection with such Transfer.
(b) Notwithstanding anything herein to the contrary, so long as Inland Real Estate LB I Corp., a price Delaware corporation (the member of Borrower), continues to be paid in installments; (ii) an agreement wholly owned, directly or indirectly, by the REIT and Borrower leasing all or a substantial part of continues to own the Property for other than actual occupancy by a space Tenant thereunder or a Property, the sale, assignment exchange, assignment, conveyance, transfer, encumbrance or other transfer issuance of, or the grant of a security interest in, Borrower’s rightpublicly registered securities issued by and representing interests with respect to the REIT shall not be deemed a Transfer for purposes of this Section 5.2.13,
(c) Lender shall not unreasonably withhold its consent to Transfers of direct or indirect beneficial ownership interests in Borrower so long as the Rating Agency confirms in writing that such proposed transaction will not cause a downgrading, title withdrawal or qualification of the then current rating of the securities issued pursuant to the Securitization and provided, however, any Transfer of more than a 49% director or indirect interest in and Borrower shall be continued upon Borrower delivering to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or Lender an acceptable non-member manager (or if no managing memberconsolidation opinion concerning Borrower, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereoftransferee and their respective owners.
(d) Notwithstanding Borrower without the provisions consent of this Section 5.2.10Lender may grant easements, Lender’s consent restrictions, covenants, reservations and rights of way in the ordinary course of business for water and sewer lines, telephone and telegraph lines, electric lines and other utilities or for other similar purposes, provided that no transfer, conveyance or encumbrance shall not be required materially impair the utility and operation of the Property or materially adversely affect the value of the applicable Individual Property or the Net Operating Income of the applicable Individual Property. If Borrower shall receive any consideration in connection with one any of said described transfers or a series of Transfersconveyances, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay have the right to use any and all reasonable out-of-pocket costs and expenses incurred such proceeds in connection with such Transfers (including Lender’s counsel fees any alterations performed in connection therewith, or required thereby. In connection with any transfer, conveyance or encumbrance permitted above, the Lender shall execute and disbursements and deliver any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion instrument reasonably necessary or appropriate to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition evidence its consent to any waiver of a prohibited Transfer upon satisfaction said action or to subordinate the Lien of the following minimum conditions:
Mortgage to such easements, restrictions, covenants, reservations and rights of way or other similar grants upon receipt by the Lender of: (iA) Borrower shall pay Lender a transfer fee equal to one percent (1%) copy of the outstanding principal balance instrument of the Loan at the time of such transfer;
; and (iiB) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations Officer's Certificate stating with respect to any other Indebtedness in a manner which is transfer described above, that such transfer does not acceptable to Lender;
(ix) Transferee materially impair the utility and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all operation of the liabilities and obligations of Guarantor under applicable Individual Property or materially reduce the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner value of the Property, which endorsement shall insure that, as applicable Individual Property or the Net Operating Income of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operationapplicable Individual Property.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 2 contracts
Sources: Loan Agreement (Inland Real Estate Corp), Loan Agreement (Inland Real Estate Corp)
Transfers. (a) By delivery of this Agreement, Borrower acknowledges that Lender has examined the financial standing and relied on the experience managerial and operational ability of Borrower are substantial and material considerations to Lender in its stockholdersagreement to make the Loan and that any encumbrance or transfer of an interest in any Asset or in Borrower whether direct or indirect, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as will materially impair Lender’s security under the Property in agreeing Security Instrument. To induce Lender to make the Loan, Borrower agrees Borrower shall not effect a Transfer, either directly or indirectly, or by operation of law, without in each instance first obtaining Lender’s prior written consent, which consent may be withheld for any reason, or given upon such terms and will continue conditions as Lender deems necessary or appropriate, all within Lender’s sole and absolute discretion, to rely the extent permitted by Applicable Law. Upon any Transfer made in violation of this Section 9.9 but subject to the cure rights contained in Section 11.1(g), without limitation on BorrowerLender’s ownership other rights, Lender shall have the absolute right in its sole discretion, without demand or notice, to declare all sums, indebtedness and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt obligations secured by this Agreement and the performance of other Loan Documents to be immediately due and payable (including the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so Yield Maintenance (as to ensure that, should Borrower default defined in the repayment of the Debt or the performance of the Other ObligationsNote)), Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth that and in this Section 5.2.10, Borrower such particular circumstances where exercise of such right by Lender is prohibited by law. Any Transfer effected pursuant to a consent by Lender shall not, and shall not permit any Restricted Party be subject to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit , and any direct transferee shall, as a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any condition of the foregoing without effectiveness of any such consent and as a covenant of Borrower and such transferee, and in form and substance prescribed by Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price , assume all obligations hereunder and agree to be paid in installments; (ii) an agreement bound by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent contained herein. Such assumption shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; providednot, however, no such Transfer shall result in the Change of Control in a Restricted Party release Borrower or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers maker or guarantor (including Lender’s counsel fees and disbursements and any fees and expenses of Asset Guarantor or Guarantor) from any liability thereunder. Notwithstanding anything to the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transferscontrary contained herein, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditionsshall not constitute a “Transfer” and are hereby expressly acknowledged and permitted by Lender:
(i) Borrower shall pay Lender a The transfer fee equal to one percent (1%) of any direct or indirect ownership interests in Guarantor, including, without limitation, the outstanding principal balance transfer of the Loan at the time of such transfer;any common or preferred stock; or
(ii) Any tenant lease of Property entered into by Borrower shall pay any in accordance with the terms and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 conditions of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 2 contracts
Sources: Loan Agreement (IMH Financial Corp), Loan Agreement (IMH Financial Corp)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall pay shall, no less than thirty (30) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies). In addition, at all times, (a) Guarantor must continue to Control, and own, directly or indirectly, in the aggregate, at least a 51% legal and beneficial interest in, Borrower, and (b) Acadia Realty Trust must continue to Control, and own, directly or indirectly, at least a 20% legal and beneficial interest in, each of Guarantor and any Affiliated Manager.
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its No consent to any waiver of a prohibited Transfer upon satisfaction assumption of the Loan shall occur on or before the date that is twelve (12) Payment Dates after the Completion of the Improvements. Thereafter, Lender’s consent to a Transfer of the Property and assumption of the Loan shall not be unreasonably withheld provided that Lender receives sixty (60) days prior written notice of such Transfer and no Event of Default has occurred and is continuing, and further provided that the following minimum conditionsadditional requirements are satisfied for all Transfers other than those described in subsection (d) above:
(i) Borrower shall pay Lender at the time of such Transfer a transfer fee equal to one half of one percent (10.5%) of the outstanding principal balance of the Loan at for the time first Transfer and one percent (1.0%) of such transferthe outstanding principal balance of the Loan for each subsequent Transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth Net Worth and liquidity Liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.35, 5.1.23 5.1.46 and 5.2.9 5.2.10 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, agreements and covenants and legal opinions reasonably required by Lender;
(x) Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender;
(xii) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty of Completion, the Guaranty of Recourse Carveouts and the Environmental Indemnity executed by Guarantor or execute a replacement guaranty guaranties and environmental indemnity reasonably satisfactory to Lender.;
(xixiii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;; and
(xiixiv) If applicable, the The Property shall be managed by a Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets . Immediately upon a Transfer to such Transferee and the satisfaction of all of the Lender’s underwriting standards related to its financial conditionabove requirements, cash flow, operating income, physical condition, management the named Borrower and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor herein shall be released from any guaranty or indemnity agreement by virtue of all liability under this Agreement, the Additional Permitted Note, the Mortgage and the other Loan Documents accruing after such Transfer; (D) Borrower . The foregoing release shall be responsible for effective upon the costs and expenses date of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted such Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior but Lender agrees to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory provide written evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon thereof reasonably requested by Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 2 contracts
Sources: Building Loan Agreement (Acadia Realty Trust), Building Loan Agreement (Acadia Realty Trust)
Transfers. Notwithstanding any other provision of this Agreement or any other Sponsor Document, subject to the provisions of the Series Certificate Agreement regarding (i) the delivery of an investor letter and (ii) the requirement that any transfer of a beneficial ownership interest in the Class B Certificates shall be made only in accordance with or subject to an exemption from, the Securities Act of 1933, as amended, the Sponsor and any transferee thereof shall be permitted to transfer any portion of its beneficial ownership interest in Class B Certificates (provided the Sponsor shall at all times maintain the Minimum Sponsor Interest). Any beneficial ownership interest in a Class B Certificate transferred, and all proceeds thereof, shall nonetheless remain Pledged Security Collateral subject to the security interest created by this Agreement, and each transferee shall be deemed to have agreed to each and every provision of this Agreement, including without limitation (a) Borrower acknowledges that Lender has examined the assignment and relied on pledge to the experience Pledge Custodian and grant to the Pledge Custodian, for the benefit of Borrower and its stockholdersF▇▇▇▇▇▇ Mac, general partners, members, Key Principals and (if Borrower is of a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as continuing security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure thatand a lien on, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any all of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to the Class B Certificates acquired and all proceeds thereof, pursuant to Section 8.1 and (b) the appointment and powers of the Pledge Custodian as collateral agent for F▇▇▇▇▇▇ Mac as set forth in this Article VIII. In addition, the Pledge Custodian shall have no duty to ascertain the identity of any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition transferee of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial ownership interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerClass B Certificates, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and make all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations payments with respect to any other Indebtedness Class B Certificate that is permitted to be paid to the Sponsor only to the Sponsor or a single entity designated by the Sponsor in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all accordance with the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which written instructions thereof. The Pledge Custodian shall be reasonably satisfactory permitted to Lender rely on and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of assume the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), accuracy of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transferinstructions.
Appears in 2 contracts
Sources: Bond Exchange, Reimbursement, Pledge and Security Agreement (America First Multifamily Investors, L.P.), Bond Exchange, Reimbursement, Pledge and Security Agreement (America First Tax Exempt Investors Lp)
Transfers. Beginning on the date hereof until the Termination Date, each Stockholder hereby covenants and agrees that, except as expressly permitted by this Proxy and Agreement, (a) Borrower acknowledges that Lender has examined and relied on such Stockholder shall not, directly or indirectly (i) tender any Covered Shares into any tender or exchange offer, (ii) offer, sell, transfer, assign, exchange, pledge, hypothecate, encumber or otherwise dispose of (collectively, “Transfer”) or enter into any contract, option, agreement, understanding or other arrangement with respect to the experience Transfer of, any Covered Shares or beneficial ownership, voting power or any other interest thereof or therein (including by operation of Borrower and its stockholderslaw), general partners, members, Key Principals and except pursuant to the Rollover Agreement (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10applicable to such Stockholder) or as a Permitted Transfer, Borrower shall not(iii) grant any proxies or powers of attorney, and shall not permit deposit any Restricted Party to do any of the following (collectively, Covered Shares into a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options voting trust or enter into a voting agreement with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, to any Covered Shares that is inconsistent with this Proxy and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted TransfersAgreement, or (iiiiv) enter into any plan of division, commit or divide, establish a protected series, create a new registered series, or convert agree to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for take any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees actions. Notwithstanding the foregoing, but subject to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part terms of the Property for other than actual occupancy Rollover Agreement (to the extent applicable to such Stockholder), this Proxy and Agreement shall not restrict Transfers by a space Tenant thereunder Stockholder of any or all of its Covered Shares to any of its Affiliates provided, that prior to and as a salecondition to the effectiveness of such Transfer, such Affiliate shall have executed and delivered to the Company a counterpart of this Proxy and Agreement pursuant to which such Affiliate shall be bound by all of the terms and provisions of this Proxy and Agreement. Any Transfer in violation of this Section 3.1 shall be void ab initio. “Permitted Transfer” shall mean (A) a pledge, hypothecation, or collateral assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases Covered Shares or any Rents; interest or rights therein as security or collateral for a bona fide loan or other obligation (iii) if collectively, a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest“Pledge”), or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificatesafter notice to the Acquiror, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior the transfer or conversion of ownership of Covered Shares or any interests or rights therein to any release of Guarantor, one (1) a lender or more substitute guarantors acceptable to Lender shall have assumed all other beneficiary of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager Pledge pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of foreclosure thereof following a default under the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operationloan or other obligation secured by the Pledge.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 2 contracts
Sources: Irrevocable Proxy and Agreement (Us Xpress Enterprises Inc), Irrevocable Proxy and Agreement (Us Xpress Enterprises Inc)
Transfers. (a) Borrower acknowledges that Lender has examined Except as provided under Sections 8.01(b), 8.02 and relied on 8.03 of this Agreement, no Limited Partner may assign, pledge, sell or in any way directly or indirectly transfer, distribute, encumber or otherwise dispose of (whether voluntarily or involuntarily) or otherwise grant a security interest in (each such act, a “Transfer”) any of its interest in the experience of Borrower and its stockholdersPartnership or in this Agreement, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as except with the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control unanimous consent of the Property as a means Partners. Any attempted disposition of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid an interest in maintaining the value of the Property so as to ensure that, should Borrower default Partnership or in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt this Agreement by a sale of the PropertyLimited Partner not made in accordance with this Section 8.01(a) shall be void and shall not be effective.
(b) Without the prior written consent The prohibitions of Lender, and except to the extent otherwise Transfers set forth in this Section 5.2.10, Borrower shall not, and 8.01(a) shall not permit any Restricted Party apply to do any of the following Transfers (collectively, “Permitted Transfers” and the transferee of a Permitted Transfer being a “TransferPermitted Transferee”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose the Transfer of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower interests in the Loan (including Partnership by any of Limited Partner among its rightsrespective Affiliates or Family Group, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit the pledge or hypothecation of interests in the Partnership by any Limited Partner to a Sale financial institution or Pledge other Person in order to provide collateral security for a bona fide loan or other financing from such financial institution or Person; provided, however, that, in each case, (1) the Limited Partner shall inform the General Partner of an such Transfer prior to effecting it and (2) prior to the completion of the Transfer, shall have executed documents, in form and substance satisfactory to the General Partner, assuming the obligations of the Limited Partner under this Agreement with respect to the Transferred interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentPartnership.
(c) A Any transferee of an interest in the Partnership pursuant to a Transfer shall include in compliance with this Section 8.01 (i) an installment sales agreement wherein Borrower agrees shall become a substituted Partner hereunder upon the acceptance by the General Partner of a counterpart hereof executed by such transferee and the execution and delivery by such transferee of any other documentation that may be reasonably required by the General Partner to sell determine that the Property or any part thereof for a price to be paid in installmentsTransfer satisfies the requirements of this Section 8.01; (ii) an agreement by Borrower leasing all or a substantial part of shall have the Property for other than actual occupancy by a space Tenant thereunder or a salesame rights and responsibilities under this Agreement as its transferor, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge shall succeed to the Capital Account of such corporation’s stock or transferor and the creation or issuance of new stock; balances thereof (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or to the change, removal, resignation or addition extent allocable to such interest). In the case of a general partner or Transfer by the Sale or Pledge General Partner of its entire interest in the Partnership pursuant to Section 8.01(b), the transferee shall be admitted as the General Partner hereunder immediately prior to the effective date of such Transfer and shall continue the business of the partnership interest Partnership without dissolution, and such Transfer shall not be deemed an event of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge withdrawal of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge transferring General Partner for purposes of the legal or beneficial interest termination provisions set forth in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof6.01.
(d) Notwithstanding No Transfer of any interest in the provisions of this Section 5.2.10, Lender’s consent shall not Partnership will be required allowed if such Transfer or the actions to be taken in connection with one that Transfer would:
(i) result in a violation of any law, rule or regulation by the Partnership;
(ii) cause the termination or dissolution of the Partnership;
(iii) cause the Partnership to be classified other than as a series partnership for Federal income tax purposes;
(iv) cause the Partnership to be classified as a “publicly traded partnership” within the meaning of Transfers, of not more than ten percent (10%Section 469(k)(2) of the stock, Code or for the limited partnership interests or non-managing membership interests purposes of Section 512(c)(2) of the Code;
(as the case may bev) result in a Restricted Partyviolation of the Securities Act;
(vi) require the Partnership or the General Partner to register as an investment company under the Investment Company Act;
(vii) require the Partnership or the General Partner to register as an investment adviser under the Investment Advisers Act; provided, however, no such Transfer shall or
(viii) result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses termination of the Rating Agencies)Partnership for Federal or state income tax purposes.
(e) Without limiting Lender’s discretion to approve If a natural person Limited Partner dies or disapprove any request for a waiver of the prohibition against Transfersbecomes incapacitated, Lender specifically reserves the right to condition its consent to any waiver then his or her Legal Representative will, upon execution of a prohibited counterpart of this Agreement, be substituted as a Limited Partner, subject to all the terms and conditions of this Agreement.
(f) Any Transfer of a Limited Partner’s interest otherwise permitted hereunder shall be made only upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal such Limited Partner taking all such actions and executing and delivering all such documents as may be reasonably requested by the General Partner in order to one percent (1%) of consummate the outstanding principal balance of the Loan at the time of such transfer;
Transfer in accordance with this Agreement and (ii) Borrower shall pay receipt by the Partnership of a written opinion of counsel, in form and substance reasonably satisfactory to the General Partner, as to compliance with Section 8.01(d) and such other legal matters as the General Partner may reasonably request. The General Partner may waive, in whole or in part, the requirement to deliver an opinion pursuant to this Section 8.01(f).
(g) Any Limited Partner that requests or otherwise seeks to effect a Transfer of all or a portion of its interest in the Partnership hereby agrees to reimburse the Partnership, at the request of the General Partner, for any and all reasonable out-of-pocket costs expenses reasonably incurred by the Partnership in connection with such Transfer, including Lender’s counsel fees the costs of seeking and disbursements obtaining the legal opinion required by Section 8.01(f) and all recording feesany other legal, title insurance premiums accounting and mortgage miscellaneous expenses (“Transfer Expenses”), whether or not such Transfer is consummated. At its election, and intangible taxes;
in any event the transferor has not reimbursed the Partnership for any Transfer Expenses incurred by the Partnership in preparing for or consummating a proposed or completed Transfer within 15 days after the General Partner has delivered to such Partner written demand for payment, the General Partner may seek reimbursement from the transferee of such interest (iiior portion thereof). If the transferee does not reimburse the Partnership for such Transfer Expenses within a reasonable time (or, in the case of a Transfer not consummated, the prospective transferor does not reimburse the Partnership within a reasonable time), the General Partner may charge the Capital Account related to such interest with such Transfer Expenses. For avoidance of doubt, Transfer Expenses shall include the additional accounting, tax preparation and other administrative expenses reasonably incurred (or to be incurred) The proposed transferee (by the “Transferee”) Partnership in the case of a Transfer that results in tax basis adjustments to be made by the Partnership under Section 743 of the Code or Transferee’s Principals must have demonstrated expertise related provisions. In the case of a Transfer that is expected to result in owning future expenses of the type described in the preceding sentence, the General Partner may estimate the amount of such expenses in good faith, and operating properties similar in location, size, class and operation to the Property, which expertise such estimate shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lenderfinal.
(xih) Borrower If a Transfer has been proposed or attempted but the requirements of this Section 8.01 have not been satisfied, then the General Partner shall deliver, at its sole cost and expense, an endorsement to not admit the Title Insurance Policy, as modified by the assumption agreement, purported transferee as a valid first lien on the Property and naming the Transferee as owner of the Propertysubstituted Limited Partner but, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of shall use its reasonable best efforts to ensure that the fee set forth in Section 5.2.10(e)(i): Partnership (i) among limited partners or members, continues to treat the transferor as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as the sole owner of the date interest in the Partnership purportedly transferred, (ii) makes no distributions to the purported transferee and (iii) does not furnish to the purported transferee any tax or financial information regarding the Partnership. The General Partner shall use its reasonable best efforts to ensure that the Partnership does not otherwise treat the purported transferee as an owned of any interest in the Partnership (either legal or equitable), unless required by law to do so. The Partnership shall be entitled to seek injunctive relief to the fullest extent permitted by law, at the expense of the purported transferor, to prevent any such purported Transfer.
(i) If any Transfer results in multiple ownership of any Limited Partner’s interest in the Partnership, the General Partner may require one or more trustees or nominees to be designated as representing a portion of or the entire interest transferred for purposes of (i) receiving all notices which may be given, and all payments which may be made, under this Agreement (each a “Current Owner”), and (ii) exercising all rights which the transferor as a Limited Partner has pursuant to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transferthis Agreement.
Appears in 2 contracts
Sources: Limited Partnership Agreement (SWK Holdings Corp), Limited Partnership Agreement (SWK Holdings Corp)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower Tenant shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether (a) assign, transfer, mortgage, pledge, hypothecate or not for consideration or of record) otherwise encumber this Lease, the Property Premises or any part thereof of or interest in this Lease or the Premises, (b) grant any concession or license within the Premises, (c) sublet all or any legal or beneficial interest therein part of the Premises or any interest of Borrower in right or privilege appurtenant to the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted TransfersPremises, or (iiid) enter into permit any plan of division, other party to occupy or divide, establish a protected series, create a new registered series, use all or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any part of the foregoing Premises (collectively, a "TRANSFER"), without Lender's the prior written consent.
(c) A consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. This prohibition against a Transfer shall include includes, without limitation, (i) an installment sales agreement wherein Borrower agrees to sell the Property any subletting or any part thereof for a price to be paid in installmentsassignment which would otherwise occur by operation of law, merger, consolidation, reorganization, transfer or other change of Tenant's corporate or proprietary structure; (ii) an agreement by Borrower leasing all assignment or a substantial part of the Property for other than actual occupancy subletting to or by a space Tenant thereunder receiver or a trustee in any federal or state bankruptcy, insolvency, or other proceedings; (iii) the sale, assignment or other transfer ofof all or substantially all of the assets of Tenant, with or the grant without specific assignment of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stockLease; (iv) if the change in control in a Restricted Party is partnership; or (v) conversion of Tenant to a limited liability entity. If Tenant converts to a limited liability entity without obtaining the prior written consent of Landlord: (i) the conversion shall be null and void for purposes of the Lease, including the determination of all obligations and liabilities of Tenant and its partners to Landlord; (ii) all partners of Tenant immediately prior to its conversion to a limited liability shall be fully liable, jointly and severally, for obligations of Tenant accruing under this Lease pre-conversion and post-conversion, and all members and other equity holders in Tenant post-conversion shall be fully liable for all obligations and liabilities of Tenant accruing under the Lease after the date such members and other equity holders are admitted to the limited liability entity as if such person or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of entity had become a general partner or in a partnership; and (iii) Landlord shall have the Sale or Pledge option of declaring Tenant in default under this Lease. If Tenant requests Landlord's consent to any Transfer, then Tenant shall provide Landlord with a written description of all terms and conditions of the partnership interest proposed Transfer, copies of the proposed documentation, and the following information about the proposed transferee: name and address; reasonably satisfactory information about its business and business history; its proposed use of the Premises; a copy of the proposed sublease or assignment agreement; banking, financial and other credit information; and general references sufficient to enable Landlord to determine the proposed transferee's creditworthiness and character. Landlord's consent to a Transfer shall not release Tenant from performing its obligations under this Lease, but rather Tenant's transferee shall assume all of Tenant's obligations under this Lease in a writing satisfactory to Landlord, and Tenant and its transferee shall be jointly and severally liable therefor. Landlord's consent to any general partner Transfer shall not waive Landlord's rights as to any subsequent Transfer. While the Premises or any profits part thereof are subject to a Transfer, Landlord may collect directly from such transferee all rents or proceeds other sums relating to the Premises becoming due to Tenant or Landlord and apply such partnership interestrents and other sums against the Rent and any other sums payable hereunder. If the aggregate rental, bonus or other consideration paid by a transferee for any such space exceeds the Sale or Pledge sum of limited partnership interests or any profits or proceeds relating (y) Tenant's Rent to be paid to Landlord for such limited partnership interest or the creation or issuance of new limited partnership interests; space during such period and (vz) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket Tenant's costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs actually incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording reasonable brokerage fees, title insurance premiums reasonable costs of finishing or renovating the space affected and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Propertyreasonable cash rental concessions, which expertise costs and expenses are to be amortized over the term of the Transfer, then fifty percent (50%) of such excess shall be reasonably determined paid to Landlord within fifteen (15) days after such amount is earned by Lender;
Tenant. Such arrearage amounts in the case of a sublease shall be calculated and adjusted (ivif necessary) Transferee on a Lease Year (or partial Lease Year) basis, and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There there shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable cumulative adjustment for the Term. Landlord shall have the right to Lender;
(viii) Transferee, Transferee’s Principals audit Tenant's books and Related Entities shall not have defaulted under records relating to the Transfer. Tenant authorizes its or their obligations with respect transferees to make payments of rent and any other Indebtedness sums due and payable, directly to Landlord upon receipt of notice from Landlord to do so. Any attempted Transfer by Tenant in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all violation of the representations terms and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which ARTICLE IX shall be reasonably satisfactory to Lender and (B) all certificatesvoid. In the event that Tenant requests that Landlord consider a sublease or assignment hereunder, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender Tenant shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): pay (i) among limited partners or membersLandlord's reasonable and documented expenses, as applicablenot to exceed Five Hundred and No/100 Dollars ($500.00) per transaction, actually incurred in connection with the consideration of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”)such request, and (ii) to immediate family members (which shall be limited to a spouse, parent, child all reasonable attorneys' fees and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender Landlord in connection with the Additional Permitted Transferconsideration of such request or such sublease or assignment. Notwithstanding any provision to the contrary, whether Tenant may assign this Lease or not consummatedsublet the Premises without Landlord's consent (i) to any corporation or other entity that controls, is controlled by or is under common control with Tenant; (Fii) once the Additional Permitted Transfer is completeto any corporation or other entity resulting from a merger, the persons acquisition, consolidation or reorganization of or with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted TransferTenant; (Giii) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory sale of all or substantially all of the assets of Tenant, so long as Tenant provides evidence to Lender thatLandlord in writing that such assignment or sublease complies with the criteria set forth in (i), (ii) or (iii) above and provided the following conditions are met: (1) the net worth of the transferee is equal to or greater than the greater of Tenant's net worth on the date of this Lease, (2) if Tenant remains in existence as a separate legal entity following the Additional Permitted Transfertransfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender it shall not be required released from liability under this Lease, (3) the transferee shall assume in a writing delivered to demonstrate any actual impairment Landlord all of its security or any increased risk Tenant's obligations under the Lease effective upon the consummation of default hereunder the transfer, and (4) Tenant shall give written notice to Landlord of the proposed transfer at least fifteen (15) days in order advance of the consummation thereof. Any transferee that meets the criteria in this paragraph shall hereinafter be referred to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transferas a "PERMITTED TRANSFEREE".
Appears in 2 contracts
Sources: Lease (Texas Roadhouse, Inc.), Lease (Texas Roadhouse, Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholdersshall not, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without without the prior written consent of Lender, and except to suffer or permit the extent otherwise set forth in this Section 5.2.10sale, Borrower shall not, and shall not permit any Restricted Party to do any of the following assignment or transfer (collectively, a “"Transfer”): ") of (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property all or any part thereof or of the Property (except pursuant to any legal or beneficial interest therein or any interest of Borrower Lease) other than in the Loan (including any of its rightsconnection with a Special Transfer, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale any direct interest in Borrower or Pledge of an (iii) any direct or indirect interest in any Restricted Party, member of Borrower other than (A) pursuant to Leases the issuance or transfer of space beneficial interests in Prime Group Realty Trust, a Maryland real estate investment trust, so long as such issuance or transfer does not result in a change in Control of Prime Group Realty Trust and so long as such issuance or transfer does not affect the Improvements to Tenants in accordance with the provisions of Section 5.1.20 non-consolidation opinion delivered by Borrower, and (B) Permitted Transfersthe issuance or transfer of limited partner interests in Prime Group Realty L.P., a Delaware limited partnership, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant conversion of a security one percent general partnership interest inowned beneficially by The Nardi Group, Borrower’s right, title and L.L.C. in Prime Group Realty L.P. into a limited part▇▇▇▇▇ip interest in Prime Group Realty L.P., so long as such issuance or transfer does not result in a change in Control of Prime Group Realty L.P. and to any Leases so long as such issuance or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or transfer does not affect the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Partyopinion delivered by Borrower; provided, however, no that Borrower may grant the easements and other rights in the Property specifically permitted under Section 8(f) of the Mortgage. No Transfer consented to by Lender pursuant to clause (ii) or (iii) above shall be permitted unless Lender shall have received (a) evidence in writing from the applicable Rating Agencies to the effect that such a Transfer will not result in a qualification, withdrawal or downgrading of the ratings in effect immediately prior to such Transfer shall result for the Securities issued in connection with the Change Securitization which are then outstanding and (b) a non-consolidation opinion satisfactory to Lender from the transferee's counsel. On or before the completion of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such permitted Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall will pay any and all reasonable out-of-pocket costs and expenses of Lender incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation therewith. Notwithstanding anything to the Propertycontrary contained in this clause (j), which expertise shall be reasonably determined by Lender;
holders of interests in Borrower (ivor holders of interests in any entity directly or indirectly holding an interest in Borrower) Transferee and Transferee’s Principals shall, as of the date of such transfer, hereof (the "Interest Holders") shall have an aggregate net worth and liquidity acceptable the right to Lender;
transfer their interest in Borrower (v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled any entity directly or indirectly by Transferee’s Principals (“Related Entities”holding an interest in Borrower) must to another Person who is not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respectsInterest Holder, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to limitation immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (eachpurposes, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s 's consent. This provision shall apply to every Transfer regardless of whether voluntary or not; provided, or whether or not Lender has consented to any previous Transfer.however, that:
Appears in 2 contracts
Sources: Loan Agreement (Prime Group Realty Trust), Loan Agreement (Prime Group Realty Trust)
Transfers. (a) Borrower acknowledges Each Shareholder agrees to execute a customary lock-up agreement with the underwriters in connection with the IPO, provided that Lender has examined and relied on the experience duration of Borrower and the lock-up period shall not exceed 180 days. In addition, each Shareholder agrees, other than as contemplated in the registration statement therefore, (i) not to Transfer any of its stockholdersSecurities in a manner that would not be permitted under the terms of the Original Shareholders Agreement, general partners(ii) not to take any other action that would not be permitted under the terms of the Original Shareholders Agreement (or if action can only be taken with the consent or approval of one or more Persons, membersnot to take any such action without obtaining the consent(s) or approval(s) of the Person(s) specified in the Original Shareholders Agreement), Key Principals or (iii) fail to take any action required to be taken by the Original Shareholders Agreement, in each of such cases (i), (ii) and (if Borrower is a trustiii), prior to the earlier of (x) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control consummation of the Property as a means IPO and (y) the date that is ten Business Days after the date of maintaining this Agreement. For the value avoidance of doubt, the ten Business Day time period set forth in clause (y) of the Property as security for repayment of immediately preceding sentence shall not expire before the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest ten Business Day time period set forth in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the PropertySection 4.16.
(b) Without the prior written consent of LenderAny and all rights and obligations under this Agreement that apply to a Shareholder will apply with equal force to any Person to whom such Shareholder Transfers (in compliance with this Agreement) Securities, and except it will be a condition to any Transfer of Securities otherwise permitted by this Agreement that the Transferee execute an agreement by which the Transferee agrees to become a party to and be bound by this Agreement, and acknowledges that the Securities Transferred to such Transferee by a Shareholder will be subject to the terms of this Agreement, unless such Transfer is made (i) pursuant to an offering registered under the Securities Act, or to the public through a broker, dealer or market-maker pursuant to Rule 144 promulgated thereunder, (ii) in a transaction that will result in the termination of this Agreement or (iii) by any Sponsor Holder to the limited partners or other equity owners of such Sponsor Holder.
(c) Any attempt by a Shareholder to Transfer any Securities not in compliance with this Agreement will be null and void and any such improper Transfer will not be registered, or otherwise recognized in the Corporation’s records. No Shareholder will enter into any transaction or series of transactions for the purpose or with the effect of, directly or indirectly, denying or impairing the rights or obligations of any other Person under this Agreement, and any such transaction will be null and void and, to the extent that such transaction requires any action by the Corporation, it will not be registered or otherwise recognized in the Corporation’s records or otherwise.
(d) For so long as the transfer restrictions set forth in this Section 5.2.102.1 remain in effect, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, each certificate or option representing a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating Security subject to such partnership interestrestrictions and owned by any Shareholder, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; if certificated, will (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding unless otherwise permitted by the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with 2.1(d)) include one or a series of Transfers, of not more than ten percent (10%) of the stockfollowing legends, as applicable, in addition to any other legends required by applicable Law or agreement: THE OFFER AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AND VOTING AS SET FORTH IN A SHAREHOLDERS AGREEMENT, A COPY OF WHICH MAY BE OBTAINED FROM THE CORPORATION. THE OFFER AND SALE OF THIS OPTION AND THE SECURITIES REPRESENTED BY THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND THIS OPTION AND THE SECURITIES REPRESENTED BY THIS OPTION MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS OPTION AND THE SECURITIES REPRESENTED BY THIS OPTION ARE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AND VOTING AS SET FORTH IN A SHAREHOLDERS AGREEMENT, A COPY OF WHICH MAY BE OBTAINED FROM THE CORPORATION. If such Securities are not certificated, a similar notation will be made on the limited partnership interests or non-managing membership interests books and records of the Corporation. Any Shareholder may, upon providing evidence, including an opinion of counsel reasonably satisfactory to the Corporation that such Securities either are not “restricted securities” (as defined in Rule 144) or may be sold pursuant to Rule 144(b)(1), exchange the case certificate representing such Securities for a new certificate that does not bear the first sentence of the applicable legend set forth in this Section 2.1(d) or remove such notation from the books and records of the Corporation. Upon termination or expiration of the provisions of this Agreement restricting the Transfer and voting of the Securities, any Shareholder may beexchange its certificate(s) in representing its Securities for a Restricted Party; provided, however, no such Transfer shall result new certificate that does not bear the legend set forth in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses second sentence of the Rating Agencies)applicable legend set forth in this Section 2.1(d) or such notation may be removed.
(e) Without limiting Lender’s discretion In order to approve allow the Shareholders to fulfill any beneficial ownership reporting obligations they may have, if a Shareholder acquires or disapprove any request for a waiver disposes of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction registered or beneficial ownership (as such term is defined in Rule 13d-3 of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%Exchange Act) of the outstanding principal balance of the Loan at the time any Securities, such Shareholder shall, within two Business Days following consummation of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transferacquisition or disposition, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation deliver notice thereof to the PropertyCorporation, which expertise the Corporation shall be reasonably determined by Lender;
(iv) Transferee promptly, and Transferee’s Principals shall, as of the date in any event within two Business Days following receipt of such transfernotice, have an aggregate net worth and liquidity acceptable forward to Lender;
(v) Transferee, Transferee’s Principals and all each other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to LenderShareholder.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 2 contracts
Sources: Shareholders Agreement (Regional Management Corp.), Shareholders Agreement (Regional Management Corp.)
Transfers. Beginning on the date hereof until the Termination Date, each Stockholder hereby covenants and agrees that, except as expressly permitted by this Proxy and Agreement, (a) Borrower acknowledges that Lender has examined and relied on such Stockholder shall not, directly or indirectly (i) tender any Covered Shares into any tender or exchange offer, (ii) offer, sell, transfer, assign, exchange, pledge, hypothecate, encumber or otherwise dispose of (collectively, “Transfer”) or enter into any contract, option, agreement, understanding or other arrangement with respect to the experience Transfer of, any Covered Shares or beneficial ownership, voting power or any other interest thereof or therein (including by operation of Borrower and its stockholderslaw), general partners, members, Key Principals and except pursuant to the Rollover Agreement (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10applicable to such Stockholder) or as a Permitted Transfer, Borrower shall not(iii) grant any proxies or powers of attorney, and shall not permit deposit any Restricted Party to do any of the following (collectively, Covered Shares into a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options voting trust or enter into a voting agreement with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, to any Covered Shares that is inconsistent with this Proxy and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted TransfersAgreement, or (iiiiv) enter into any plan of division, commit or divide, establish a protected series, create a new registered series, or convert agree to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for take any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees actions. Notwithstanding the foregoing, but subject to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part terms of the Property for other than actual occupancy Rollover Agreement (to the extent applicable to such Stockholder), this Proxy and Agreement shall not restrict Transfers by a space Tenant thereunder Stockholder of any or all of its Covered Shares to any of its Affiliates provided, that prior to and as a salecondition to the effectiveness of such Transfer, such Affiliate shall have executed and delivered to the Company a counterpart of this Proxy and Agreement pursuant to which such Affiliate shall be bound by all of the terms and provisions of this Proxy and Agreement. Any Transfer in violation of this Section 3.1 shall be void ab initio. “Permitted Transfer” (A) a pledge, hypothecation, or collateral assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases Covered Shares or any Rents; interest or rights therein as security or collateral for a bona fide loan or other obligation (iii) if collectively, a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest“Pledge”), or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificatesafter notice to the Acquiror, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior the transfer or conversion of ownership of Covered Shares or any interests or rights therein to any release of Guarantor, one (1) a lender or more substitute guarantors acceptable to Lender shall have assumed all other beneficiary of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager Pledge pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of foreclosure thereof following a default under the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operationloan or other obligation secured by the Pledge.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 2 contracts
Sources: Irrevocable Proxy and Agreement (Fuller Max L), Irrevocable Proxy and Agreement (Knight-Swift Transportation Holdings Inc.)
Transfers. (a) Borrower acknowledges that Lender ▇▇▇▇▇▇ has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower▇▇▇▇▇▇▇▇’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale one (1) or more sales of the PropertyProperties.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): following: (i) sell, convey, mortgage, grant, bargaingrant a security interest in, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Individual Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or therein; (ii) permit a Sale or Pledge of an equity interest in any Restricted PartyParty (clauses (i) and (ii), collectively, a “Transfer”), in each case other than (A) any Transfer otherwise expressly permitted pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of this Section 5.1.20 5.2.10, and (B) any Permitted TransfersDebt, in each case, provided that the same does not result in a Prohibited Change of Control, unless otherwise expressly approved in writing by ▇▇▇▇▇▇. All Transfers that result in a Person holding a direct or indirect interest in Borrower of 10% or more, who did not hold a direct or indirect interest in Borrower of 10% or more as of the Closing Date, shall be subject to the satisfaction of ▇▇▇▇▇▇’s “know-your-customer requirements” with respect to such Person (iii) enter into any plan of division, unless such direct or divide, establish indirect interests in Borrower are publicly listed or traded on a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business national securities exchange or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentelectronic quotation system).
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property one (1) or more Individual Properties or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower▇▇▇▇▇▇▇▇’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; and (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender▇▇▇▇▇▇’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Partyany Permitted Transfer; provided, however, no that (A) other than with respect to any Permitted Transfer occurring under clause (n), (o) or (p) of the definition thereof, if such Transfer shall result transfer results in any Person acquiring more than 49% of the direct or indirect equity interest in any Borrower (even if not constituting a Prohibited Change of Control Control), Borrower shall have delivered to Lender with respect to such Person an Additional Insolvency Opinion that in a Restricted Party Lender’s reasonable judgment satisfies the then-current criteria of the Rating Agencies; (B) with respect to any Permitted Transfer that results in Borrower ceasing to be both Controlled and owned at least 51% directly or cause indirectly by Guarantor (and in connection with each subsequent conveyance or transfer that again changes the identity of any Key Principal Permitted Transferee that Controls Borrower), the following conditions shall have been satisfied: (1) no Event of Default shall have occurred and be continuing; (2) Borrower shall have delivered to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty ten (3010) days days’ prior written notice of such proposed Transfer. ; (3) Borrower shall pay any and have paid of all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including of Lender’s counsel fees reasonable and disbursements and any documented fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Rating Agency fees; and (4) Borrower shall have paid to Lender a transfer fee in an amount equal to 0.25% of the Principal Indebtedness at the time of such conveyance or transfer; and (C) other than with respect to any Permitted Transfer occurring under clause (n), (o) or (p) of the definition thereof, if any Transfer results in a Person holding a direct or indirect interest in Borrower of 10% or more (and such Person did not hold a direct or indirect interest in Borrower of 10% or more as of the Closing Date), such Person must satisfy Lender’s counsel fees “know-your-customer requirements”, unless such direct or indirect interests in Borrower are publicly listed or traded on a national securities exchange or other electronic quotation system.
(e) Other than the transfer of the Condemnation Parcel in accordance with the terms of this Agreement, no direct Transfer of any Individual Property (or any direct equity interests in any Individual Borrower) shall occur during the Blackout Window.
(f) Except during the Blackout Window, the initial Borrower shall have the right to contemporaneously Transfer all of the Collateral to a successor borrower that will assume all of the obligations of ▇▇▇▇▇▇▇▇ hereunder and disbursements under the other Loan Documents, provided the following conditions are met to the reasonable satisfaction of ▇▇▇▇▇▇:
(i) no Event of Default shall have occurred and all recording fees, title insurance premiums and mortgage and intangible taxesbe continuing;
(ii) Lender shall receive thirty (30) days’ prior written notice of such proposed Transfer;
(iii) The assumption of this Agreement, the Note, the Mortgage and/or the other Loan Documents by the proposed transferee successor borrower, and a reaffirmation of each applicable Loan Document by each of Borrower, Sole Member and Guarantor (the “Transferee”prior to giving effect to such Transfer) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in locationas reasonably requested by ▇▇▇▇▇▇, size, class and operation subject to the Property, which expertise shall be reasonably determined by Lenderprovisions of Section 9.3 hereof;
(iv) Transferee payment of all of reasonable and Transferee’s Principals shalldocumented fees and expenses incurred in connection with such Transfer including, as without limitation, the cost of any third party reports, legal fees and expenses, application fees, Rating Agency fees and expenses or required legal opinions;
(v) payment of an assumption fee equal to 0.25% of the date Principal Indebtedness at the time of such transfer, have Transfer;
(vi) delivery of an aggregate net worth Additional Insolvency Opinion reflecting the proposed Transfer reasonably satisfactory in form and liquidity acceptable substance to Lender;
(vvii) Transfereethe proposed successor ▇▇▇▇▇▇▇▇’s continued compliance with the representations and covenants set forth in Section 4.1.9, Transferee’s Principals Section 4.1.30, Section 4.1.35, Section 5.1.23, Section 5.1.24 and all other entities which may Section 5.2.9 hereof;
(viii) delivery of evidence reasonably satisfactory to ▇▇▇▇▇▇ that the proposed successor borrower is a Special Purpose Entity;
(ix) the proposed successor borrower shall be Controlled and at least 51% owned or Controlled by (directly or indirectly by Transferee’s Principals indirectly) one or more Permitted Transferees, and Lender shall be provided with reasonable evidence thereof;
(“Related Entities”x) must the proposed successor borrower and its Controlling Permitted Transferee(s) shall not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage subject of any insolvency act, or any act for the benefit of debtors Bankruptcy Action within seven (7) years prior to the date of the proposed Transfer;
(vixi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There there shall be no material litigation or regulatory action pending or threatened against Transfereethe proposed successor borrower or its Controlling Permitted Transferee(s) which would reasonably be expected to materially impair, Transfereeor does not impair, the proposed transferee’s Principals or Related Entities which is not acceptable ability to Lendercomply with the terms of the Loan Documents;
(viiixii) Transferee, Transferee’s Principals and Related Entities neither the proposed successor borrower nor its Controlling Permitted Transferee(s) shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ixxiii) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior prior to any release of Guarantor, one (1) or more a substitute guarantors guarantor reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Limited Recourse Guaranty and Environmental Indemnity executed by Guarantor or execute executed a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.Lender and delivered an Additional Insolvency Opinion covering the replacement guarantor; upon assumption of the Limited Recourse Guaranty and Environmental Indemnity by such substitute guarantor reasonably acceptable to Lender or deliver of an executed a replacement guaranty and environmental indemnity reasonably satisfactory to Lender by such substitute guarantor and delivery of an Additional Insolvency Opinion covering such substitute guarantor, Lender shall release Guarantor from any matters arising from and after the date of such release;
(xixiv) Borrower if required by ▇▇▇▇▇▇, proposed successor borrower and its Controlling Permitted Transferee(s) shall deliverbe approved by the Approved Rating Agencies selected by Lender, which approval, if required by ▇▇▇▇▇▇, shall take the form of a Rating Agency Confirmation with respect to the assumption of the Loan;
(xv) delivery of (i) all organizational documentation reasonably requested by ▇▇▇▇▇▇, which shall be reasonably satisfactory to Lender and, following a Securitization, satisfactory to the Approved Rating Agencies and (ii) all certificates, agreements and legal opinions reasonably required by ▇▇▇▇▇▇;
(xvi) Lender shall have received, at its sole no cost and expenseor expense to Lender, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property Properties and naming the Transferee proposed successor borrower as owner of the PropertyProperties, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property Properties shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and hereof, the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Encumbrances and Liens being contested in accordance with this Agreement; and
(xiiixvii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, such other conditions as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower required for Lender to comply with its own internal policies as of the date of this Agreement (each a “Current Owner”)such Transfer, including, without limitation, any policies with respect to the creditworthiness, reputation and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each qualifications of the following conditions is satisfied: proposed successor borrower or its Controlling Permitted Transferee(s).
(Ag) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrowera Transfer that requires ▇▇▇▇▇▇’s Transfer without Lender’s consentconsent hereunder and which consent has not been obtained prior to such Transfer. This provision shall apply to every Transfer that requires ▇▇▇▇▇▇’s consent hereunder regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer that requires ▇▇▇▇▇▇’s consent.
(h) Except for a Permitted Transfer or as otherwise expressly permitted hereunder, no direct or indirect equity interest in or right to distributions from Borrower shall be subject to a Lien in favor of any Person, and neither Borrower nor any holder of a direct or indirect interest in Borrower shall issue preferred equity (or debt granting the holder thereof rights substantially similar to those generally associated with preferred equity); provided, however, that, notwithstanding anything to the contrary herein, the following shall be permitted without the consent of Lender: (A) a Lien permitted as a Permitted Transfer, (B) any Lien on direct or indirect equity interests in and/or rights to distributions from Guarantor or any Person owning a direct or indirect interest in Guarantor and (C) the issuance of direct or indirect preferred equity interests in Guarantor or any Person owning a direct or indirect interest in Guarantor. To the extent a transaction is permitted under the definition of Permitted Transfer or clause (f) above, such transaction shall for all purposes be deemed permitted, notwithstanding that another clause may otherwise limit such transaction, provided that any requirements and/or conditions expressly set forth in the definition of Permitted Transfer or clause (f) above are satisfied and no Event of Default is continuing.
(i) Notwithstanding anything contained herein or in any other Loan Document to the contrary, so long as Lineage Logistics Holdings, LLC is a Guarantor under the Loan, Lineage Logistics Holdings, LLC shall, subject to the MT Enforcement Rights, (A) continue to own (beneficially and of record) one hundred percent (100%) of the direct or indirect equity interests in each Master Tenant and (B) cause each Master Tenant, any subtenant of any Master Tenant and/or any Taxable REIT Subsidiary to continue to engage in the businesses conducted by such Master Tenant as of the Closing Date, in each case of clauses (A) and (B), unless Lender shall otherwise consent (not to be unreasonably withheld, conditioned or delayed). Borrower and ▇▇▇▇▇▇ hereby acknowledge and agree that any breach or violation of this Section 5.2.10(i) shall be (and shall be deemed and construed to be) (x) a Prohibited Change of Control and (y) a prohibited Transfer. For the avoidance of doubt, (i) to the extent an exercise of the MT Enforcement Rights by one or more of the MT Secured Lenders results in the foreclosure or transfer in lieu of foreclosure of the direct or indirect equity interests in any Master Tenant, any subtenant of any Master Tenant or any Taxable REIT Subsidiary, the same shall not be deemed or construed to be a breach or violation of the requirement described in this paragraph or a Prohibited Change of Control or a prohibited Transfer, and (ii) upon the occurrence of any such foreclosure or transfer in lieu of foreclosure, the provisions described in this paragraph will automatically terminate and have no further force and effect with respect to any Person that is the subject of any such foreclosure or transfer in lieu of foreclosure.
Appears in 2 contracts
Sources: Loan Agreement (Lineage, Inc.), Loan Agreement (Lineage, Inc.)
Transfers. (a) Borrower acknowledges that Lender ▇▇▇▇▇▇ has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the 156506983 Property in agreeing to make the Loan, and will continue to rely on Borrower▇▇▇▇▇▇▇▇’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of and all other obligations of Borrower under this Agreement, the Other ObligationsSecurity Instrument, the Note and the other Loan Documents. Borrower acknowledges that Lender ▇▇▇▇▇▇ has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsother obligations of Borrower under this Agreement, the Security Instrument, the Note and the other Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender▇▇▇▇▇▇, and except to the extent otherwise set forth in this Section 5.2.107.1, Borrower shall not, and shall not permit any Restricted Party to do any of the following (individually and collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or therein, (ii) enter into any interest of Borrower in the PACE Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (iiiii) permit a Sale or Pledge of an any direct or indirect interest in any Restricted Party, Borrower; other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 4.15 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any RentsRents and Profits; (iii) if a Restricted Party is a corporation, any merger, consolidation or a Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal any change in Control of any Individual Borrower or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereofGuarantor, directly or indirectly.
(d) Notwithstanding the provisions of this Section 5.2.107.1, Lender▇▇▇▇▇▇’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership direct or indirect ownership interests in any Individual Borrower or non-managing membership interests (as the case may be) in Guarantor or a Restricted PartyREIT Transfer; provided, however, no in each case, each of the following conditions (collectively, the “Transfer Conditions”) are satisfied: (i) intentionally omitted; (ii) if such Transfer shall result in the Change of Control in is a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such KYC Triggering Transfer, (A) Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Transfer and (B) Lender shall have performed searches and/or received other diligence such that Lender is in compliance with Lender’s then current “know your customer” requirements 156506983 and Lender shall have received Satisfactory Search Results, at Borrower’s cost and expense, with respect to the applicable transferee; (iii) Borrower shall pay remake (or if such Transfer is not a KYC Triggering Transfer, Borrower shall be deemed to have automatically remade, effective as of the date of the consummation of such Transfer) the representations and warranties contained herein relating to ERISA, OFAC and Prohibited Persons (and, upon ▇▇▇▇▇▇’s request, each Individual Borrower shall deliver to Lender an Officer’s Certificate containing such updated representations effective as of the date of the consummation of the applicable Transfer); (iv) no Event of Default shall be continuing at the time of such Transfer and such Transfer shall not result in the occurrence of an Event of Default; and (v) at all times, General Partner must continue to (A) Control each of Individual Borrower, Guarantor and any Affiliated Manager and all reasonable out-of-pocket costs (B) own, directly or indirectly, at least a 51% legal and expenses incurred beneficial interest in each Individual Borrower, Guarantor and any Affiliated Manager. Upon request from ▇▇▇▇▇▇, Borrower shall promptly provide Lender with a revised version of the organizational chart delivered to Lender in connection with such Transfers (including Lender’s counsel fees and disbursements and the Loan reflecting any fees and expenses of the Rating AgenciesTransfer consummated in accordance with this Section 7.1(d).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower▇▇▇▇▇▇▇▇’s Transfer without Lender▇▇▇▇▇▇’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 2 contracts
Sources: Loan Agreement (Wheeler Real Estate Investment Trust, Inc.), Loan Agreement (Wheeler Real Estate Investment Trust, Inc.)
Transfers. (ai) Borrower Each Issuer acknowledges that Lender Initial Noteholder has examined and relied relied, and each Noteholder will rely, on the experience of Borrower Issuers and its stockholders, their respective general partners, members, Key Principals principals and (if Borrower Issuer is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make purchase the LoanNotes, and will continue to rely on Borrower’s Issuers’ ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Financing Documents. Borrower Each Issuer acknowledges that Lender Trustee has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower Issuers default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Financing Documents, Lender Trustee can recover the Debt by a sale of the Property.
(bii) Without the prior written consent of Lender, and except Except to the extent otherwise set forth in this Section 5.2.107.02(j), Borrower no Issuer shall, nor shall not, and shall not any Issuer permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty (collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.7.01
Appears in 2 contracts
Sources: Note Indenture (Kerzner International LTD), Note Indenture (Kerzner International LTD)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loanamend and restate this Agreement, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.105.2.10 and Section 5.2.11, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any direct legal or direct beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an a direct interest in Borrower or ▇▇▇▇▇▇’▇ Manager held by HOC on the Closing Date, or any Restricted Partyindirect interest (an “Intermediate Interest”) in Borrower or ▇▇▇▇▇▇’▇ Manager created by conveying direct interests held by HOC on the Closing Date to an intermediate subsidiary of HOC (collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers5.1.20. For the purposes of this Section 5.2.10, or (iii) enter into any plan removal from the Property of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business memorabilia or other entity personal property provided to Borrower for use or provide display at the Property pursuant to the terms of the PH License (other than any replacement of the same in accordance with the terms hereof) shall be deemed to constitute a Transfer of a part of the Property and shall require the prior written consent of Lender in its operating agreement for any reasonable discretion in each instance. Borrower acknowledges that Lender may impose conditions to its approval of a Transfer, including, with respect to a Transfer of the foregoing without Lender's prior written consentProperty in connection with which the transferee assumes the obligations of Borrower under the Loan and the Loan Documents, payment of an assumption fee of one quarter of one percent (0.25%) of the outstanding principal balance of the Loan.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof5.1.23.
(d) Notwithstanding the foregoing provisions of this Section 5.2.105.2.10 or anything else to the contrary contained in this Agreement or any other Loan Document, but subject to the satisfaction of all conditions set forth or referenced in this Section 5.2.10(d), Lender’s consent shall not be required in connection with any of the following Transfers (each, a “Permitted Transfer”):
(i) the Transfer, in one or a series of Transferstransactions, of not more than ten percent (10%) 49% in the aggregate of the stock, the limited partnership direct or indirect interests in Borrower or non-managing membership interests (as the case may be) in a Restricted Party▇▇▇▇▇▇’▇ Manager; provided, howeverprovided that after giving effect to such Transfer and any other Transfers, no such Transfer shall result in the Change of Control shall occur;
(ii) the Transfer, in one or a series of transactions, of any direct or indirect interests in any Restricted Party to any other Restricted Party, any Affiliate of a Restricted Party or cause to any Key Principal direct or indirect member or partner of any Restricted Party provided that after giving effect to such Transfer and any other Transfers, no Change of Control shall occur;
(iii) any Transfer by maintenance, devise or bequest or by operation of law upon the death of a natural person that was the holder of any direct or indirect interest in any Restricted Party to a member of the immediate family of such person or a trust established for the benefit of such immediate family member, provided that after giving effect to such Transfer and any other Transfers, no Change of Control shall occur;
(iv) the Transfer, in one or a series of transactions, of any direct or indirect interests in Guarantor or, subject to the provisions of subsection (e) below, in HOC;
(v) any arm’s-length sale of Personal Property by Borrower to a third party in the ordinary course of business and any disposition of Equipment and FF&E which is being replaced in the ordinary course of business or is otherwise no longer necessary or is immaterial; and
(vi) Permitted Encumbrances. Notwithstanding the foregoing, each of the Permitted Transfers set forth in this Section 5.2.10(d) shall be a Key Principal of Borrowersubject to, and as Lender’s agreement to permit the same without specific consent, shall be conditioned upon the satisfaction of the following conditions:
(A) if such Transfer (either individually or in the aggregate with any prior Transfers) would result in a condition Change in Control of Borrower or ▇▇▇▇▇▇’▇ Manager, Lender shall receive not less than ten (10) Business Days prior written notice from Borrower of such Transfer;
(B) if such Transfer is of a direct interest or Intermediate Interest in Borrower or ▇▇▇▇▇▇’▇ Manager, Lender shall receive not less than ten (10) Business Days prior written notice from Borrower of such Transfer;
(C) if such Transfer (either individually or in the aggregate with any prior Transfers) would result in Sponsor or HOC no longer holding any direct or indirect interest in Borrower or ▇▇▇▇▇▇’▇ Manager, Lender shall receive not less than ten (10) Business Days prior written notice from Borrower of such Transfer;
(D) if neither of the circumstances set forth in clauses (A), (B) or (C) shall apply with respect to each such Transfer, Lender shall receive not written notice of such Transfer from Borrower within ten (10) Business Days following the effective date of such Transfer; provided that, no such notice shall be required with respect to any Transfer of a direct or indirect interest in Guarantor or HOC;
(E) if after giving effect to any Permitted Transfer, more than forty-nine percent (49%) in the aggregate of the direct interests or Intermediate Interests in Borrower or ▇▇▇▇▇▇’▇ Manager are owned by a Person and its Affiliates that owned less than forty-nine percent (49%) of the direct interests or Intermediate Interests in Borrower or ▇▇▇▇▇▇’▇ Manager, as applicable, as of the Closing Date, a Rating Agency Confirmation shall have been obtained and, no less than thirty (30) days prior written notice to the effective date of any such proposed Transfer. , Borrower shall pay any deliver to Lender an Additional Insolvency Opinion acceptable to Lender and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies);
(F) no Permitted Transfer (either individually or in the aggregate with any prior Transfers) shall cause or otherwise result in the termination, revocation and/or suspension of any Gaming License or otherwise have any material and adverse effect on the ability of Manager or Borrower to operate the Casino Component in accordance with all applicable Gaming Laws;
(G) no such Permitted Transfer of a direct interest in Borrower or ▇▇▇▇▇▇’▇ Manager that results in a Change of Control of Borrower or ▇▇▇▇▇▇’▇ Manager shall be to any Disqualified Transferee; and
(H) no such Permitted Transfer shall result, directly or indirectly, either individually or in the aggregate, in any Disqualified Transferee being in Control of Borrower or ▇▇▇▇▇▇’▇ Manager or having a direct interest in Borrower or ▇▇▇▇▇▇’▇ Manager.
(e) Without limiting Lender’s discretion Notwithstanding anything to approve the contrary contained in this Section 5.2.10 or disapprove any request for a waiver elsewhere in the Loan Documents, no transfer or conveyance, directly or indirectly, by Guarantor of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
interests in HOC that results in Guarantor (i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
no longer Controlling HOC or (ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred owning less than 49% of the direct or indirect interests in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise HOC shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as permitted without the prior consent of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver unless (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty are simultaneously by a guarantor that satisfies the “Net Worth” and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee “Liquid Assets” requirements set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as 4.7 of the date of this Agreement (each a “Current Owner”), Guaranty and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be managed by a Qualified Manager as required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transferhereunder.
Appears in 2 contracts
Sources: Loan Agreement (Caesars Acquisition Co), Loan Agreement (Harrahs Entertainment Inc)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its Mortgage Borrower and their stockholders, general partners, members, Key Principals principals and (if Borrower or Mortgage Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Mortgage Borrower’s ownership and control of the Property and Borrower’s ownership of the Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other ObligationsDebt. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Collateral and the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other ObligationsDebt, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit Mortgage Borrower or any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Collateral or the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest any Equity Interests in Borrower, Mortgage Borrower, or any Restricted Party, other than (A) pursuant to Leases . Any Transfer made in violation of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of this Agreement shall be void. Notwithstanding the foregoing to the contrary, Permitted Transfers may occur without Lender's ’s prior written consent.
(c) A Transfer shall include include, but not be limited to: (i) an installment sales agreement wherein Borrower agrees to sell the Property Collateral or any part thereof for a price to be paid in installments; (ii) an agreement by Mortgage Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest Equity Interests of any general partner or any profits or proceeds relating to such partnership interestEquity Interests, or the Sale or Pledge of Equity Interests of limited partnership interests partners or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-non member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest Equity Interests of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-non managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereofthe terms of this Agreement; or (viii) the cash flow from the Property (or Borrower’s rights to cash distributions from Mortgage Borrower) or any portion thereof are sold, assigned, transferred, hypothecated, pledged or otherwise encumbered, directly or indirectly, or occurring by operation of law or otherwise, other than pursuant to the Mortgage Loan Documents.
(d) Notwithstanding the provisions of this Section 5.2.105.2.9, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted PartyBorrower or Guarantor; provided, however, no such Transfer shall result in the Change change of Control in a Restricted Party Borrower or cause any Key Principal to no longer be a Key Principal of BorrowerGuarantor, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in Borrower shall pay or Guarantor are owned by any Person and all reasonable outits Affiliates that owned less than forty-of-pocket costs nine percent (49%) direct or indirect interest in such party as of the Closing Date, Borrower shall, no less than thirty (30) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for Solely in connection with a waiver sale of the prohibition against TransfersProperty permitted pursuant to and in accordance with Section 5.2.10(e) of the Mortgage Loan Agreement, Lender specifically reserves a new borrower (“New Borrower”), owning indirectly 100% of the right to condition its consent to any waiver unencumbered equity interests in the proposed new owner of the Property (the “New Owner”) may assume Borrower’s obligations hereunder (hereafter, a prohibited Transfer upon satisfaction “Proposed Loan Assumption”) provided that each of the following minimum conditionsterms and conditions is satisfied in Lender’s discretion:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) each of the outstanding principal balance of the Loan at the time of such transferNew Borrower and New Owner are approved by Lender;
(ii) each of the conditions set forth in Section 5.2.10 of the Mortgage Loan Agreement has been satisfied, as determined by Mortgage Lender;
(iii) no Event of Default has occurred and is continuing and no event shall have occurred that by the passage of time or delivery of notice would become an Event of Default;
(iv) Borrower shall give Lender written notice of such Transfer request not less than sixty (60) days prior to the proposed date of such Transfer and such Proposed New Assumption does not occur 60 days prior to or 60 days after a Securitization;
(v) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, Transfer (including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (taxes and the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning fees and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as expenses of the date of such transferRating Agencies, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transferif applicable);
(vi) Transferee If applicable, Lender has received a Rating Agency Confirmation regarding the Proposed Loan Assumption;
(vii) New Borrower shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities Borrower shall not have defaulted under its or their obligations with respect pay Lender a transfer fee equal to any other Indebtedness in a manner which is not acceptable to Lenderone percent (1%) of the outstanding principal balance of the Loan at the time of such Transfer;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31Lender shall have received such documents, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants certificates and legal opinions as it may reasonably required by Lenderrequest;
(x) Prior New Owner, New Borrower and the property manager shall have sufficient experience in the ownership and management of properties similar to the Property, and Lender shall be provided with reasonable evidence thereof (and Lender reserves the right to approve the New Borrower without approving the substitution of the property manager);
(xi) prior to any release of the Guarantor, one (1) or more a substitute guarantors guarantor acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute executed a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicableBorrower and New Borrower execute, without any cost or expense to Lender, any additional documents reasonably requested by Lender to evidence and perfect Lender’s interests under the Loan Documents;
(xiii) New Borrower delivers certificated securities to Lender representing 100% of the equity ownership interests in New Owner (such interests, along with any other collateral securing the Loan, the Property shall be managed by Qualified Manager pursuant “New Collateral”) and grants Lender a perfected first priority lien in such New Collateral;
(xiv) New Borrower delivers to a Replacement Management AgreementLender, without any cost or expense to Lender, such endorsements to Lender’s “Eagle 9” or “UCC Plus” (or equivalent) insurance policy which insures Lender’s lien in the New Collateral, hazard insurance policy endorsements or certificates and other similar materials as Lender may reasonably deem necessary at the time of the Proposed Loan Assumption, all in form and substance satisfactory to Lender; and
(xiiixv) The Property meets all of the Lender may, as a condition to evaluating any requested consent to a transfer, require that Borrower post a cash deposit with Lender in an amount equal to Lender’s underwriting standards related anticipated costs and expenses in evaluating any such request for consent. The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to its financial condition, cash flow, operating income, physical condition, management and operationprovide written evidence thereof reasonably requested by Borrower.
(f) Notwithstanding any provision in this Section 5.2.10 5.2.9 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i5.2.9(e)(viii): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuingno event has occurred that with notice and/or the passage of time, or both, would constitute an Event of Default; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor Indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 4.1.20 hereof. ; (I) upon Lender’s request, delivery of an Additional Insolvency Opinion acceptable to Lender; and (J) the Additional Permitted Transfer is permitted under the Mortgage Loan Documents.
(g) Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
(h) Borrower shall pay all costs and expenses of Lender in connection with any Transfer, including all fees and expenses of Lender’s counsel, whether internal or outside, and the cost of any required counsel opinions related to REMIC or other securitization or tax issues and any Rating Agency fees.
Appears in 2 contracts
Sources: Mezzanine Loan Agreement, Mezzanine Loan Agreement (TNP Strategic Retail Trust, Inc.)
Transfers. Beginning on the date hereof until the Termination Date, each Stockholder hereby covenants and agrees that, except as expressly contemplated by this Agreement, (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower Stockholder shall not, and shall direct its Affiliates and their respective Representatives not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily (i) tender any Covered Shares into any tender or involuntarilyexchange offer, (ii) offer, sell, transfer, assign, exchange, pledge, hypothecate, hedge, gift, loan, encumber or otherwise dispose of (collectively, “Transfer”) or enter into any Contract, option, agreement, understanding or other arrangement with respect to the Transfer of, any Covered Shares or beneficial ownership, voting power or any other interest thereof or therein (including by operation of law law), (iii) grant any proxies or otherwisepowers of attorney, and whether deposit any Covered Shares into a voting trust or not for consideration or of record) the Property or enter into a voting agreement with respect to any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under Covered Shares that is inconsistent with this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted TransfersAgreement, or (iiiiv) enter into any plan of division, commit or divide, establish a protected series, create a new registered series, or convert agree to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for take any of the foregoing without Lender's prior written consent.
(c) A actions. Any Transfer in violation of this Section 4.1 shall include (i) an installment sales agreement wherein Borrower agrees be void ab initio. Notwithstanding anything to sell the Property contrary in this Agreement, any Stockholder may Transfer any or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a saleCovered Shares, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
applicable law, to (dA) Notwithstanding such Stockholder’s Affiliates or (B) to any custodian or nominee for the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) purpose of the stock, Covered Shares for the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Partyaccount of such Stockholder; provided, howeverthat, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal prior to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice the effectiveness of such proposed Transfer. Borrower shall pay Transfer contemplated by the foregoing clause (A), each Person to whom any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower Covered Shares or any interest in any of such Covered Shares is or may be transferred shall pay any have executed and all reasonable out-of-pocket costs incurred delivered to Parent a counterpart of this Agreement in connection with a form reasonably acceptable to Parent pursuant to which such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise Affiliate shall be reasonably determined bound by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents terms and provisions hereof in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There which case such Affiliate shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in deemed a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such TransferStockholder hereunder, and Transferee and Transferee’s Principals the transferor shall deliver (A) remain liable for all organizational documentation reasonably requested by Lenderof its obligations hereunder. From the date hereof until the Exchange Time, which subject to the immediately preceding sentence, the Stockholders shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed retain all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to LenderSponsor Shares.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 2 contracts
Sources: Support Agreement (HireRight Holdings Corp), Support Agreement (HireRight Holdings Corp)
Transfers. (a) Borrower acknowledges Borrowers acknowledge that Lender has examined and relied on the experience of Borrower Borrowers and its stockholders, general partners, members, Key Principals their direct and (if Borrower is a trust) beneficial owners indirect members in owning and operating properties such as the Property Collateral and Mortgage Borrowers in agreeing to make the Loan, and will continue to rely on Borrower’s Borrowers’ ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Additionally, Borrowers acknowledge that Lender has examined and relied on the experience of Mortgage Borrowers and their general partners, members, principals and (if any Mortgage Borrower acknowledges is a trust) beneficial owners, as applicable, in owning and operating properties such as the Properties and in owning intellectual property such as the IP, in agreeing to make the Loan, and will continue to rely on Mortgage Borrowers’ ownership of the Properties and the IP as a means of maintaining the value of the Properties and the IP and, therefore, indirectly the value of the Collateral, as security for repayment of the Debt and the performance of the obligations contained in the Loan Documents. Borrowers acknowledge that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower Borrowers default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower Borrowers shall not, and shall not permit any Transfer Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, license, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Property or any part thereof or any legal or beneficial interest therein therein, or any IP or any part thereof or any legal or beneficial interest of Borrower in therein, or the Loan (including Collateral or any of its rights, duties and obligations under this Agreement and the other Loan Documents) part thereof or any legal or beneficial interest therein; or (ii) permit a Sale or Pledge of an any interest in any Transfer Restricted PartyParty (any of the actions in the foregoing clauses (i) or (ii), a “Transfer”), other than than, notwithstanding anything to the contrary contained in this Section 5.2.10:
(A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and hereof, including, without limitation, the HRHI Lease;
(B) the pledge of the membership interests in each Mortgage Borrower as collateral for the First Mezzanine Loan and, if applicable, the exercise of applicable remedies or a transfer in lieu of foreclosure under the First Mezzanine Loan Documents by First Mezzanine Lender, subject to the conditions and restrictions set forth in the Intercreditor Agreement;
(C) the pledge of the membership interests in each First Mezzanine Borrower as collateral for the Loan and, if applicable, the exercise of applicable remedies or a transfer in lieu of foreclosure under the Loan Documents by Lender, subject to the conditions and restrictions set forth in the Intercreditor Agreement;
(D) the pledge of the membership interests in each Borrower as collateral for the Third Mezzanine Loan and, if applicable, the exercise of applicable remedies or a transfer in lieu of foreclosure under the Third Mezzanine Loan Documents by Third Mezzanine Lender, subject to the conditions and restrictions set forth in the Intercreditor Agreement;
(E) any Release Parcel Sale, any Adjacent Parcel Sale or an IP Sale, in each instance in accordance with the applicable provisions of Section 2.5 of the Mortgage Loan Agreement;
(F) a conveyance of the Deeded Adjacent Property as contemplated by Section 3.2(u) of the Mortgage Loan Agreement;
(G) any IP License or Adjacent Property IP License granted in accordance with the provisions of Section 5.1.26 hereof;
(H) the Permitted TransfersEncumbrances and Permitted IP Encumbrances; and
(I) the issuance of new stock in, the merger or consolidation of, and/or the Sale or Pledge of the stock in, any Publicly Traded Entity who owns a direct or indirect ownership interest in any Transfer Restricted Party;
(iiiJ) enter into the transfer of indirect ownership interests in any plan of division, Mortgage Borrower in order to create one or divide, establish a protected series, create a more new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement mezzanine borrowers for any New Mezzanine Loan as contemplated under the Mortgage Loan Agreement; and
(K) the transfer by deed of any applicable Partial Release Parcel and/or Partial Adjacent Parcel to a Subsidiary Transferee and the subsequent transfer of all of the membership interests held by Adjacent Borrower in such Subsidiary Transferee, in each instance in accordance with Section 2.5.1(f) or 2.5.2(f) of the Mortgage Loan Agreement, as applicable; provided, however, that in the case of each of the foregoing clauses (A) – (K), such Transfer shall only be permitted hereunder if it does not violate any Legal Requirements, including specifically, but without Lender's prior written consentlimitation, any Gaming Laws.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein any Borrower or Mortgage Borrower, as applicable, agrees to sell a Property or any part thereof, the Property IP, the Collateral or any part thereof for a price to be paid in installments; (ii) an agreement by any Mortgage Borrower leasing all or a substantial part of the a Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, any Mortgage Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Transfer Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Transfer Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation resignation, admission or addition of a general partner or the Sale or Pledge of the general partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Transfer Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation resignation, admission or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing or managing membership interests or the creation or issuance of new non non-managing or managing membership interests; (vi) if a Transfer Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Transfer Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent any Manager (including including, without limitation, an Affiliated Manager) other than in accordance with the Mortgage Loan Agreement and Section 5.1.22 hereof; or (viii) any deed-in-lieu or consensual foreclosure relating to any Property with or for the benefit of Mortgage Lender or any Affiliate thereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (so long as the case may be) following Transfers do not violate any Legal Requirements in a Restricted Party; providedany instance, howeverincluding specifically, no such Transfer shall but without limitation, any Gaming Laws, or cause or otherwise result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrowersuspension, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage termination and/or revocation of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreementGaming License, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicableHRHI Lease, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of Gaming Sublease or the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interestsCasino Component Lease, as applicable, in Borrower the following Transfers may be transferred occur without Lender’s the consent and without application of Lender or the fee set forth in Section 5.2.10(e)(i): payment of any transfer or other fee, excluding, however, any Transfer of (i) among limited partners any direct interest in any Mortgage Borrower for so long as the Loan, the Mortgage Loan or membersany Mezzanine Loan is outstanding, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and and/or (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner direct interest in any Borrower for so long as the Loan or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions any Mezzanine Loan is satisfied: outstanding:
(A) the Transfer of any direct or indirect interest in any Transfer Restricted Party, provided that (1) no Event of Default, Mortgage Event of Default or any Mezzanine Event of Default has occurred and is continuing; , (2) (y) one or both Guarantors continue to Control, directly or indirectly, each Loan Party and HRHI, and (z) one or both Guarantors own, directly or indirectly, at least a fifty-one percent (51%) economic interest in each Loan Party and in HRHI, (3) Lender receives (y) at least ten (10) days prior written notice of any such voluntary Transfer and copies of the documents transferring such interest, or (z) written notice of any such involuntary Transfer and copies of the documents transferring such interest within thirty (30) days following such involuntary Transfer, (4) if after such Transfer any Person and its Affiliates collectively would own more than forty-nine (49%) in the aggregate of the direct and/or indirect interests of any Loan Party and as of the Closing Date such Person and its Affiliates collectively owned forty-nine percent (49%) or less in the aggregate of the direct and/or indirect interests of any Loan Party, Lender shall have received, prior to such Transfer, an Additional Insolvency Opinion reasonably satisfactory to Lender and the Rating Agencies and, if a Securitization has occurred, a confirmation in writing from the Rating Agencies to the effect that such Transfer will not result in a re-qualification, reduction or withdrawal of the then current rating assigned to the Securities or any class thereof in any applicable Securitization, and (5) Borrowers deliver, or cause Mortgage Borrowers to deliver, to Lender a copy of any consents or approvals required by any Governmental Authority, including specifically, but without limitation, any Gaming Authority, in connection with such Transfer;
(B) the Transfer of any direct or indirect interest in any Transfer Restricted Party to any other Person who is, as of the Closing Date, a holder of any direct or indirect interest in any Transfer Restricted Party, provided that (1) no Event of Default, Mortgage Event of Default or any Mezzanine Event of Default has occurred and is continuing, (2) (y) one or both Guarantors continue to Control, directly or indirectly, each Loan Party and HRHI, and (z) one or both Guarantors own, directly or indirectly, at least a fifty-one percent (51%) economic interest in each Loan Party and in HRHI, (3) Lender has received Borrower’s receives (y) at least ten (10) days prior written notice of any such voluntary Transfer and copies of the Additional Permitted documents transferring such interest, or (z) written notice of any such involuntary Transfer no less than 30 and copies of the documents transferring such interest within thirty (30) days prior following such involuntary Transfer, and (4) Borrowers deliver, or cause Mortgage Borrowers to the commencement deliver, to Lender a copy of any consents or approvals required by any Governmental Authority, including specifically, but without limitation, any Gaming Authority, in connection with such transfer; Transfer;
(C) no indemnitor the Transfer of any direct or Guarantor shall be released from indirect interest in any guaranty Transfer Restricted Party by inheritance, devise, bequest or indemnity agreement by virtue operation of law upon the death of a natural person who owned such interest, provided that (1) such Transfer is to a non-minor member of the immediate family of the deceased holder of such interest or a trust established for the benefit of one or more members of the immediate family of the deceased holder of such interest, (2) (y) one or both Guarantors continue to Control, directly or indirectly, each Loan Party and HRHI, and (z) one or both Guarantors own, directly or indirectly, at least a fifty-one percent (51%) economic interest in each Loan Party and in HRHI, (3) such Transfer shall not result in a change of Control of the day-to-day operations of any of the Properties, (4) Lender receives written notice of such Transfer and copies of the documents transferring such interest not later than thirty (30) days following such Transfer, (5) the legal and financial structure of each Loan Party and the other Transfer Restricted Parties, and the single purpose nature and bankruptcy remoteness of each Loan Party and the other Transfer Restricted Parties, after such Transfer shall satisfy the applicable provisions of the Loan Documents, the Mortgage Loan Documents and/or the First Mezzanine Loan Documents (including, without limitation, Section 4.1.30 hereof and/or Section 4.1.30 of the Mortgage Loan Agreement or the First Mezzanine Loan Agreement, as applicable), (6) if after such Transfer any Person and its Affiliates would collectively own more than forty-nine (49%) in the aggregate of the direct and/or indirect interests of any Loan Party and as of the Closing Date such Person and its Affiliates collectively owned forty-nine percent (49%) or less in the aggregate of the direct and/or indirect interests of any Loan Party, Lender shall have received an Additional Permitted Insolvency Opinion reasonably satisfactory to Lender and the Rating Agencies and, if a Securitization has occurred, a confirmation in writing from the Rating Agencies to the effect that such Transfer will not result in a re-qualification, reduction or withdrawal of the then current rating assigned to the Securities or any class thereof in any applicable Securitization, and (7) Borrowers deliver, or cause Mortgage Borrowers to deliver, to Lender a copy of any consents or approvals required by any Governmental Authority, including specifically, but without limitation, any Gaming Authority, in connection with such Transfer; and
(D) Borrower shall be responsible for (1) the costs and expenses merger or consolidation of documenting any Guarantor or any Constituent Member of any Guarantor with or into any other Person, (2) the Additional Permitted sale of any Guarantor or substantially all of any Guarantor’s assets to any other Person, or (3) the issuance of new stock or limited partnership or membership interests in, and/or the Sale or Pledge of stock, limited partnership or membership interests in, any Guarantor or any Constituent Member thereof (any of the occurrences in the foregoing clauses (1), (2) or (3), a “Guarantor Transfer”); (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender provided, that, in connection with each of the Additional Permitted Transferforegoing instances, whether or not consummated; the applicable Guarantor or the applicable Constituent Member of a Guarantor is or is not a Publicly Traded Company, (FI) once after giving effect to such Guarantor Transfer, when viewed both individually and together with any prior Guarantor Transfers, (y) the Additional Permitted Transfer is completeGuarantors, collectively, shall continue to satisfy the persons with Control of Borrower Net Worth Requirements, and management (z) at least one of the Property are Guarantors shall be a Qualified Real Estate Guarantor, (II) except if the same persons who applicable Guarantor or the applicable Constituent Member of a Guarantor is a Publicly Traded Company, Lender receives at least ten (10) days prior written notice of any such Guarantor Transfer, (III) if after such Guarantor Transfer any Person and its Affiliates collectively would own more than forty-nine (49%) in the aggregate of the direct and/or indirect interests of any Loan Party and as of the Closing Date such Person and its Affiliates collectively owned forty-nine percent (49%) or less in the aggregate of the direct and/or indirect interests of any Loan Party, Lender shall have such Control and management rights immediately received, prior to such Guarantor Transfer, an Additional Insolvency Opinion reasonably satisfactory to Lender and the Additional Permitted Transfer; Rating Agencies and, if a Securitization has occurred, a confirmation in writing from the Rating Agencies to the effect that such Guarantor Transfer will not result in a re-qualification, reduction or withdrawal of the then current rating assigned to the Securities or any class thereof in any applicable Securitization, and (GIV) Borrower shall furnish Borrowers deliver, or cause Mortgage Borrowers to deliver, to Lender copies a copy of any documentation executed consents or approvals required by any Governmental Authority, including specifically, but without limitation, any Gaming Authority, in connection with the Additional Permitted such Guarantor Transfer.
(e) With respect to any Transfer promptly after execution thereof; and (H) Borrower permitted under this Section 5.2.10 or otherwise consented to by Lender, Borrowers shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or notpay, or whether or not Lender has consented to any previous Transfer.shall caus
Appears in 1 contract
Sources: Second Mezzanine Loan Agreement (Hard Rock Hotel Holdings, LLC)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-non member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-non managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall, no less than thirty (30) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender and the Rating Agencies. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) No Transfer of the Property (or any portion thereof) and assumption of the Loan shall occur during the period that is sixty (60) days prior to and sixty (60) days after a Securitization. Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, Transfer (including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the each Individual Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) If required by Lender, Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xixii) Borrower shall deliver, at its sole cost and expense, an endorsement to the each Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the each Individual Property and naming the Transferee as owner of the each Individual Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the each Individual Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy Policies issued on the date hereof and the Permitted Encumbrances;
(xiixiii) If applicable, the Each Individual Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiiixiv) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(xv) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuingno event has occurred that with notice and/or the passage of time, or both, would constitute an Event of Default; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor Indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 4.1.30 hereof; and (I) upon Lender’s request, delivery of an Additional Insolvency Opinion acceptable to Lender. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Individual Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty (collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 hereof; and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentEncumbrances.
(c) A Subject to subclauses (A) and (B) of Section 5.2.10(b), a Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein any Individual Borrower agrees to sell the Property its Individual Property, or any part thereof thereof, for a price to be paid in installments; (ii) an agreement by any Individual Borrower leasing all or a substantial part of the its Individual Property for other than actual occupancy by a space Tenant thereunder tenant thereunder, or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s its right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following transfers shall not be required deemed to be a Transfer: (i) the pledge, sale or transfer, in connection with one or a series of Transferstransactions, of not more than ten forty-nine percent (1049%) of the stockstock in a Restricted Party; provided, however, no such pledges, sales or transfers shall result in the change of control in the Restricted Party, and as a condition to each such pledge, sale or transfer, Lender shall receive not less than ten (10) Business Days prior notice of such pledge, proposed sale or transfer, (ii) the pledge, sale or transfer, in one or a series of transactions, of not more than forty-nine percent (49%) of the limited partnership interests or non-managing or membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer pledges, sales or transfers shall result in the Change change of Control control in a the Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transferpledge, sale or transfer, Lender shall receive not less than ten (10) Business Days prior notice of such proposed pledge, sale or transfer, and (iii) the sale, transfer or issuance of not more than eighty-five percent (85%) of the beneficial ownership interests in Guarantor, provided that (A) such beneficial ownership interests are securities listed on the New York Stock Exchange or such other nationally-recognized stock exchange, (B) no such sales or transfers shall result in the change of control in Guarantor, and (C) if required by Lender, the delivery of a nonconsolidation opinion reflecting the proposed transfer satisfactory in form and substance to Lender, and provided, further, that the subsequent sale, transfer, exchange or trading of such securities shall not be deemed a Transfer.
(e) Lender’s consent to a one (1) time Transfer of the Properties shall not be unreasonably withheld provided that Lender receives thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any Transfer and all reasonable out-of-pocket costs no Event of Default has occurred and expenses incurred in connection with such Transfers (including Lender’s counsel fees is continuing, and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one-half of one percent (10.50%) of the outstanding principal balance of the Loan at the time of such transferTransfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “TransfereeAssignee”) or TransfereeAssignee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the PropertyProperties, which expertise shall be reasonably determined by Lender;
(iv) Transferee Assignee and TransfereeAssignee’s Principals shall, as of the date of such transferTransfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, TransfereeAssignee and Assignee’s Principals and all other entities which may be which, as of the date of such Transfer, will have any equity interest in Assignee and are owned or Controlled directly or indirectly by TransfereeAssignee’s Principals (“Assignee Related Entities”) must not have been party to a debtor in any bankruptcy proceedings, voluntary or involuntary, made an assignment for proceeding under the benefit of creditors or taken advantage of any insolvency act, Bankruptcy Code or any act for the benefit of debtors other Federal or state bankruptcy or insolvency law within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee Assignee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against TransfereeAssignee, TransfereeAssignee’s Principals or Assignee Related Entities which is not reasonably acceptable to Lender;
(viii) TransfereeAssignee, TransfereeAssignee’s Principals and Assignee Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee Assignee and TransfereeAssignee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 4.1.30 and 5.2.9 of this Agreementhereof, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee Assignee and TransfereeAssignee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, agreements and covenants and legal opinions reasonably required by Lender;
(x) If a Securitization shall have occurred, Lender shall have received written confirmation from the applicable Rating Agencies that such Transfer shall not result in a downgrade, withdrawal or qualification of the then current ratings of the Securities or any class thereof;
(xi) Borrower or Assignee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender;
(xii) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.; and
(xixiii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance PolicyPolicies, as modified by the assumption agreement, as a valid first lien on the Property Properties and naming the Transferee Assignee as owner of the PropertyProperties, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property Properties shall not be subject to any additional exceptions or liens other than those contained in the relevant Title Insurance Policy Policies issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, Encumbrances relating thereto. Immediately upon a Transfer to such Assignee and the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets satisfaction of all of the Lender’s underwriting standards related above requirements, the named Borrower and Guarantor herein shall be released from all liability under this Agreement, the Note, the Mortgages and the other Loan Documents accruing after such Transfer. The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to its financial condition, cash flow, operating income, physical condition, management and operationprovide written evidence thereof reasonably requested by Borrower.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the creditworthiness and experience of Borrower and its stockholdersgeneral partner, general managing member, limited partners, membersmembers and beneficial owners, Key Principals and (if Borrower is a trust) beneficial owners as applicable, in owning and operating properties such as the Property in agreeing to make the Loanloan secured by the Mortgage, and that Lender will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other ObligationsDebt. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the shall not without Lender’s prior written consent of Lender, and except to the extent as otherwise set forth expressly provided in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): : (i) sell, assign, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, transfer or otherwise dispose of its legal or beneficial interests in the Property or any part thereof other than pursuant to Leases permitted under, and entered into in accordance with, Section 5.1.20 hereof, (ii) permit any owner, directly or indirectly, of an ownership interest the Property, to transfer or dispose of such interest, whether by transfer of stock or other interest in a Restricted Party, or otherwise, (iii) incur Indebtedness (other than the Indebtedness permitted pursuant to the terms of this Agreement), (iv) mortgage, hypothecate or otherwise encumber or grant a security interest in the Property or any part thereof, (v) sell, assign, convey, transfer, mortgage, encumber, grant a security interest in, or otherwise transfer or dispose of (directly any direct or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an indirect ownership interest in any Restricted Party, other than (A) pursuant or permit any Restricted Party that owns an interest in another Restricted Party to Leases of space in do the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transferssame, or (iiivi) enter into any plan file a declaration of division, or divide, establish a protected series, create a new registered series, or convert condominium with respect to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for the Property (any of the foregoing without Lender's prior written consenttransactions, a “Transfer”). Notwithstanding the foregoing, for purposes hereof, a “Transfer” shall not include Permitted Transfers.
(cb) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or Notwithstanding Section 5.2.10(a), at any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for time other than actual occupancy by the period commencing thirty (30) days prior to a space Tenant thereunder or Securitization and ending thirty (30) days after a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10Securitization, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten up to forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a such Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. In addition, at all times, IREIT must continue to (i) Control the applicable Restricted Party, and (ii) own, directly or indirectly, not less than fifty-one percent (51%) of the legal and beneficial interest in the applicable Restricted Party.
(c) Notwithstanding Section 5.2.10(a), at any time other than the period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization, Lender shall not withhold its consent to a Transfer of the entire Property or all of the outstanding ownership interests in Borrower in a single transaction to one newly-formed Special Purpose Entity which shall be a wholly-owned subsidiary of IREIT (“Permitted Affiliate Transferee”) which shall be approved by Lender in its reasonable discretion (“Permitted Affiliate Transfer”), provided (1) no Event of Default shall have occurred and be continuing, (2) the creditworthiness of IREIT, as applicable, has not deteriorated, in the sole discretion of Lender, from the Closing Date to the date of the proposed Transfer, and (3) Borrower shall pay any and have paid all reasonable out-of-pocket costs and customary third party expenses (including reasonable attorneys’ fees and disbursements) actually incurred by Lender in connection with such Transfers Transfer (including Lender’s counsel fees and disbursements and but not any fees and expenses of the Rating Agenciesassumption or processing fee).
(ed) Without limiting Lender’s discretion Notwithstanding Section 5.2.10(a), at any time after other than during the period that is thirty (30) days prior to approve or disapprove any request for and thirty (30) days after a waiver of the prohibition against TransfersSecuritization, Lender specifically reserves the right to condition shall not withhold its consent to any waiver of a prohibited Transfer upon satisfaction of the Property and assumption of the Loan, provided that Lender receives thirty (30) days’ prior written notice of such Transfer and further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) the proposed transferee of the outstanding principal balance of Property shall be a Special Purpose Entity (the Loan “Transferee”) which at the time of such transfertransfer will be in compliance with, and must be able to satisfy all of, the representations, warranties and covenants contained in Section 4.1.30, Section 4.1.35, Section 5.1.23 and Section 5.2.9 and which shall have assumed in writing (subject to the terms of Section 9.3 hereof) and agreed to comply with all the terms, covenants and conditions set forth in this Loan Agreement and the other Loan Documents, expressly including, without limitation the representations, warranties and covenants contained in Section 4.1.30, Section 4.1.35, Section 5.1.1 and Section 5.1.23 hereof;
(ii) Borrower shall pay deliver confirmation in writing from the Rating Agencies that such proposed Transfer will not cause a downgrading, withdrawal, reduction or qualification of the ratings in effect immediately prior to such Transfer for the Securities, or any and all reasonable out-of-pocket costs incurred class thereof, issued in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxesa Securitization which are then outstanding;
(iii) The proposed transferee Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity not worse than the net worth and liquidity of Borrower and its Principals as of the date hereof or an aggregate net worth and liquidity otherwise reasonably acceptable to Lender;
(the “Transferee”iv) Transferee or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance reasonably satisfactory to Lender;
(vii) There there shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) the Property shall be managed by a Qualified Manager pursuant to a Replacement Management Agreement;
(ix) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ixx) Transferee no Event of Default shall have occurred and Transferee’s Principals must be able to satisfy all the representations continuing and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the each existing Title Insurance PolicyPolicy insuring the related Mortgage, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the fee estate (or leasehold estate, as applicable) of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the such Property shall not be subject to any additional exceptions or liens other than those contained in the such Title Insurance Policy issued on the date hereof and the Permitted EncumbrancesEncumbrances relating thereto;
(xii) If Intentionally omitted;
(xiii) Intentionally omitted;
(xiv) Transferee, at its sole cost and expense, shall deliver opinions regarding existence, authority and enforceability, which opinions may be relied upon by Lender, the Rating Agencies and their respective counsel, agents and representatives with respect to the proposed transaction;
(xv) Transferee and Transferee’s Principals shall deliver (1) all organizational documentation reasonably requested by Lender, which shall be reasonably acceptable to Lender, and (2) all certificates, agreements and covenants reasonably required by Lender;
(xvi) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity (if any) executed by Guarantor or execute a replacement guaranty and environmental indemnity (if applicable) reasonably satisfactory to Lender;
(xvii) Borrower shall have paid an assumption fee equal to one-half of one percent (0.5%) of the then outstanding principal balance of the Loan in connection with the first such Transfer, and an assumption fee equal to one percent (1.0%) of the then outstanding principal balance of the Loan in connection with each subsequent Transfer, provided, however, no such assumption fee shall be payable if the Transferee is wholly owned by an Identified Affiliate; and;
(xviii) Borrower shall pay (or cause to be paid) any and all reasonable out-of-pocket costs actually incurred by Lender in connection with such Transfer (including, without limitation, Lender’s reasonable counsel fees and disbursements) and all recording fees, title insurance premiums and mortgage and intangible taxes and the fees and expenses of the Rating Agencies (if any) pursuant to clause (ii) above.
(e) Notwithstanding Section 5.2.10(a), at any time after other than during the period that is thirty (30) days prior to and thirty (30) days after a Securitization, Lender shall not withhold its consent to a Transfer of all of the outstanding ownership interests in Borrower in a single transaction to an Identified Affiliate, provided that Lender receives thirty (30) days’ prior written notice of such Transfer and further provided that the following additional requirements are satisfied:
(i) Borrower shall deliver confirmation in writing from the Rating Agencies that such proposed Transfer will not cause a downgrading, withdrawal, reduction or qualification of the ratings in effect immediately prior to such Transfer for the Securities, or any class thereof, issued in connection with a Securitization which are then outstanding;
(ii) The Identified Affiliate shall, as of the date of such transfer, have an aggregate net worth and liquidity not worse than the net worth and liquidity of IREIT as of the date hereof or an aggregate net worth and liquidity otherwise reasonably acceptable to Lender;
(iii) The Identified Affiliate and all other entities which may be owned or Controlled directly or indirectly by the Identified Affiliate (“Identified Affiliate Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(iv) there shall be no material litigation or regulatory action pending or threatened against the Identified Affiliate or Identified Affiliate Related Entities which is not reasonably acceptable to Lender;
(v) the Property shall continue to be managed by Manager or be managed by a Qualified Manager pursuant to a Replacement Management Agreement;
(vi) no Event of Default shall have occurred and be continuing and no Default or Event of Default shall otherwise occur as a result of such Transfer;
(vii) intentionally omitted;
(viii) The Identified Affiliate, at its sole cost and expense, shall deliver opinions regarding existence, authority and enforceability, which opinions may be relied upon by Lender, the Rating Agencies and their respective counsel, agents and representatives with respect to the proposed transaction;
(ix) The Identified Affiliate shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably acceptable to Lender, and (B) all certificates, agreements and covenants reasonably required by Lender;
(x) Prior to any release of Guarantor, the Identified Affiliate shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity (if any) executed by Guarantor or execute a replacement guaranty and environmental indemnity (if applicable) reasonably satisfactory to Lender; and
(xiiixi) The Property meets Borrower shall pay all of the Lender’s underwriting standards related reasonable and customary third-party expenses (including reasonable attorneys’ fees and disbursements) actually incurred by Lender in connection with such Transfer and a processing fee equal to its financial condition, cash flow, operating income, physical condition, management $5,000 and operationall expenses of the Rating Agencies (if any) pursuant to clause (i) above.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary5.2.10(a), limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application shall not be required with respect to the merger of the fee set forth in Section 5.2.10(e)(i): IREIT with any other Identified Affiliate; provided that (i) among limited partners or membersLender shall receive not less than thirty (30) days prior written notice of any such proposed merger, as applicable(ii) no Event of Default shall have occurred and be continuing, of Borrower who are limited partners or members, as applicable, of Borrower as (iii) the net worth of the date entity surviving such merger shall equal or exceed the net worth of this Agreement IREIT immediately prior to such merger, and (each iv) immediately following such merger, the entity surviving the merger shall be publicly registered with the Securities and Exchange Commission.
(g) Notwithstanding Section 5.2.10(a), at any time other than the period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization, Lender’s consent shall not be required in connection with the acquisition by IREIT of any entity whether by merger, stock purchase, asset purchase or any other manner; provided that: (i) Lender shall receive not less than thirty (30) days prior written notice of any such proposed transaction, (ii) no Event of Default shall have occurred and be continuing, (iii) IREIT is the surviving entity following such a transaction, and (iv) the net worth of IREIT after the transaction shall equal or exceed the net worth of IREIT immediately prior to such a transaction.
(h) Notwithstanding Section 5.2.10(a), at any time other than the period that is thirty (30) days prior to and thirty (30) days after a Securitization, Lender shall not withhold its consent to, and shall not charge an assumption fee in connection, with a Transfer by IREIT of one hundred percent (100%) of the membership interests in Borrower to a joint venture in which IREIT owns at least twenty-five percent (25%) of the stock, partnership interests or membership interests (“Current OwnerJV Transferee”), and provided that (i) Lender receives at least thirty (30) days’ prior written notice of such Transfer, (ii) no Event of Default shall have occurred and be continuing at the time of such written notice or the Transfer, (iii) IREIT maintains operational and managerial control of the JV Transferee and Borrower, (iv) subject to immediate family members Section 5.16 of the Guaranty Agreement, IREIT and IREIC continue to be Guarantor, (which v) IREIT’s partner in the JV Transferee (the “JV Partner”) or the JV Partner’s parent entity shall be limited have at least $350,000,000.00 in assets, (vi) the JV Partner or the JV Partner’s parent entity shall have a net worth of at least $175,000,000.00; (vii) neither the JV Partner nor any of its Affiliates shall have been a party to a spouseany bankruptcy proceedings, parentvoluntary or involuntary, child and grandchild (each, made an “Immediate Family Member”)), of any Current Owner or to trusts formed assignment for the benefit of Immediate Family Members creditors or taken advantage of such Current Owner any insolvency act, or any act for bona fide estate planning purposes the benefit of debtors within seven (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A7) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days years prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue date of the Additional Permitted proposed Transfer; , (Dviii) Borrower shall be responsible for the costs pay all of Lender’s reasonable and customary third-party expenses of documenting the Additional Permitted Transfer; (Eincluding reasonable attorneys’ fees and disbursements) Borrower shall reimburse Lender for all actual costs and expenses actually incurred by Lender in connection with the Additional Permitted Transfersuch Transfer and a processing fee equal to $5,000, whether and (ix) if required or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management requested by any of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted TransferRating Agencies, Borrower shall continue deliver a substantive non-consolidation opinion with respect to comply with such Transfer to the provisions of Section 4.1.31 hereof. JV Transferee.
(i) Lender shall not be required to demonstrate approve or disapprove any actual impairment proposed Transfer governed by this Section 5.2.10 within thirty (30) days of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless receipt of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.a wr
Appears in 1 contract
Sources: Loan Agreement (Inland Real Estate Income Trust, Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners owners, as applicable, in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other ObligationsObligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty (clause (i) and (ii) above, collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consenthereof.
(c) A Transfer shall include include, but not be limited to: (i) an installment sales agreement wherein Borrower agrees to sell the Property Property, or any part thereof thereof, for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part substantially all of the Property for other than actual occupancy by a space Tenant thereunder tenant thereunder, or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership limited liability company interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership limited liability company interest, or the Sale or Pledge of non-managing membership limited liability company interests or the creation or issuance of new non non-managing membership limited liability company interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following transfers shall not be required deemed to be a Transfer and shall not require Lender’s consent: (i) the sale or transfer, in connection with one or a series of Transferstransactions, of not more than ten forty-nine percent (1049%) of the stockstock in a Restricted Party; and (ii) the sale or transfer, directly or indirectly, in one or a series of transactions, of not more than forty-nine percent (49%) of the limited partnership interests or non-managing membership limited liability company interests (as the case may be) in a Restricted Party; provided, however, that with respect to each such sale or transfer (A) no such Transfer sales or transfers shall result in the Change change of Control voting control in a the Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and (B) as a condition to each such Transfersale or transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. sale or transfer, (C) no such sale or transfer of any direct ownership interests in Borrower or Mezzanine Borrower shall be permitted, (D) Borrower shall pay or cause to be paid any and all reasonable outcosts imposed or incurred as a result of any such sale or transfer, including any transfer taxes, and (E) if after giving effect to any such sale or transfer, more than forty-ofnine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-pocket costs nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion acceptable to Lender and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies). In addition, at all times, except following a transfer of the Property permitted pursuant to Section 5.2.10(f) hereof, the Operating Partnership must continue to (1) Control Borrower, Guarantor, and any Affiliated Manager, and (2) own, directly or indirectly, at least a fifty-one percent (51%) interest in Borrower, Guarantor and any Affiliated Manager. The sale, transfer or issuance of stock in the REIT shall not be deemed a Transfer hereunder, provided, that the stock of the REIT is listed and traded on the New York Stock Exchange or such other nationally recognized stock exchange.
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s a Transfer without Lender’s written consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
(f) Notwithstanding anything to the contrary contained herein, and without limiting any Transfers or rights under Section 5.2.10(g) hereof, Lender agrees that it shall not unreasonably withhold its consent to a Transfer (or to an unlimited number of Transfers) of the Property by Borrower (or the then owner of the Property), provided that the following terms and conditions are satisfied: (i) Borrower (or the then owner of the Property) shall have given at least thirty (30) days prior written notice to Lender of the proposed Transfer and the proposed Transfer shall not be effective earlier than the date that is twelve (12) months after the first Payment Date; (ii) no Default, Event of Default, Mezzanine Default or Mezzanine Event of Default shall have occurred or be continuing; (iii) the proposed transferee of the Property shall have executed and delivered an express assumption of this Agreement, the Note, the Mortgage and the other Loan Documents, subject to the provisions of Section 9.4 hereof; (iv) payment of all of fees and expenses incurred in connection with such Transfer, including the cost of any third party reports, reasonable legal fees and expenses, Rating Agency fees and expenses or required legal opinions; (v) payment of an assumption fee equal to one half of one percent (0.50%) of the Outstanding Principal Balance with respect to the initial transfer and one percent (1.00%) of the Outstanding Principal Balance with respect to each transfer thereafter; (vi) the delivery of an Additional Insolvency Opinion reflecting the proposed Transfer reasonably satisfactory in form and substance to Lender; (vii) the proposed transferee’s compliance with the representations and covenants set forth in Section 4.1.30 and Section 5.2.9 hereof; (viii) the delivery of evidence satisfactory to Lender that the single purpose nature and bankruptcy remoteness of the proposed transferee, and its shareholders, partners or members, as the case may be, following such Transfer is in accordance with the then current standards of Lender and the Rating Agencies; (ix) prior to any release of Guarantor, a substitute guarantor acceptable to Lender in its discretion shall have assumed the Guaranty and the Environmental Indemnity executed by Guarantor, or executed a replacement guaranty, environmental indemnity, reasonably satisfactory to Lender; (x) Lender shall have received confirmation in writing from the Rating Agencies to the effect that such Transfer will not result in a re-qualification, reduction or withdrawal of the then current ratings assigned to the Securities or any class thereof in any applicable Securitization; (xi) the satisfaction of all of the conditions set forth in Section 5.2.10(f) of the Mezzanine Loan Agreement; and (xii) the satisfaction of such other conditions as Lender shall determine in its reasonable discretion to be in the interest of Lender, including the creditworthiness, reputation and qualifications of the transferee with respect to the Loan and the Property.
(g) A Transfer that occurs by inheritance, devise or bequest or by operation of law upon the death or disability of a natural Person who holds a direct or indirect interest in Borrower, and a Transfer by a natural Person of direct or indirect interests in Borrower for estate planning purposes, shall not require the consent of Lender and no transfer fee shall be payable in connection therewith, provided, however, that, in each case, such Transfer is to a non-minor member of the immediate family of the holder of such interest, or a trust established for the benefit of a member of the immediate family of the holder of such interest, and provided further that, in each such case, each of the following transfer conditions are satisfied:
(i) no Event of Default or Mezzanine Event of Default shall have occurred and remain uncured;
(ii) Borrower shall give Lender notice of such Transfer together with copies of all instruments effecting such transfer not less than ten (10) days prior to the date of such Transfer, or if any such Transfer or series of Transfers shall result in any Person that does not own more than a twenty percent (20%) direct or indirect interest in the Borrower as of the date hereof owning more than a twenty percent (20%) direct or indirect interest in Borrower, Borrower shall give Lender thirty (30) days prior written notice of such Transfer and Lender shall have an opportunity to perform its customary credit and background searches with respect to such transferee, except in the case of the death or disability of an interest holder, in which event Borrower shall give Lender notice of such Transfer within ten (10) Business Days after such Transfer;
(iii) no such Transfer of interest shall result in a change of Control of Borrower (or its managing member/general partner) or the day-to-day operations of the Property, or, if such Transfer would result in a change of Control of Borrower (or its managing member/general partner) or the day-to-day operations of the Property, as a result of the death or disability of an interest holder that is a natural Person, Lender shall have approved in good faith the Person that will Control Borrower and/or the day-to-day operations of the Property;
(iv) the legal and financial structure of Borrower and its shareholders, partners or members, and the single purpose nature and bankruptcy remoteness of Borrower and its shareholders, partners or members, after such Transfer shall satisfy Lender’s then current applicable underwriting criteria and requirements;
(v) if, after taking into account any prior Transfers pursuant to this Section 5.2.10(g), whether to the proposed transferee or otherwise, such Transfer (or series of Transfers) shall result in (A) the proposed transferee, together with all members of his/her immediate family or any Affiliates thereof, owning in the aggregate (directly, indirectly or beneficially) more than forty-nine percent (49%) of the interests in Borrower (or any entity directly or indirectly holding an interest in Borrower), or (B) a Transfer in the aggregate of more than forty–nine percent (49%) of the interests in Borrower as of the date hereof, Borrower shall deliver to Lender, (x) a non-consolidation opinion reasonable satisfactory to Lender, and (y) at the request of Lender, written confirmations from the Rating Agencies that such Transfer or series of Transfers will not result in a qualification, downgrade or withdrawal of the then applicable ratings of the Securities; and
(vi) Borrower shall pay all fees and expenses incurred by Lender in connection with such Transfer, including the cost of any third party reports, legal fees and expenses, Rating Agency fees and expenses and required legal opinions.
(h) Notwithstanding anything to the contrary contained herein, a Qualified Pledgor shall have the right to, and may, pledge, without Lender’s consent, its or their direct or indirect equity interests in the Mezzanine Borrower, to secure (i) a loan facility or loan facilities to one or more Qualified Pledgors from a group of lenders for which a Qualified Institutional Lender acts as agent or collateral agent or will act as initial administrative and collateral agent, and (ii) related hedging arrangements in connection with the loan facility or loan facilities described in clause (i); provided, however, that in either case, such Qualified Pledgor(s) pledges, directly or indirectly, its or their equity interests in substantially all of the property owning subsidiaries in which Operating Partnership holds a direct or indirect interest, and provided further that any enforcement action taken pursuant to such pledge shall constitute a Transfer that is subject to the terms of this Section 5.2.10 and the holder of such pledge shall be required to comply with all of the applicable provisions of this Section 5.2.10.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its members, stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owners, as applicable, owning and operating properties such as the Property Collateral in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other ObligationsObligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall notnot (and shall not permit any Mortgage Borrower to), and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Collateral, the Properties or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an any interest in any Restricted PartyParty or (iii) incur Indebtedness (other than the Indebtedness permitted pursuant to the terms of this Agreement) (any of the foregoing transactions, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and hereof, (B) Permitted Transfers, or the Loan Documents and (iiiC) enter into any plan the Mortgage Loan and the granting of division, or divide, establish a protected series, create a new registered series, or convert security interests pursuant to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentMortgage Loan Documents.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Collateral, or any part thereof, or any Mortgage Borrower agrees to sell any Property or any part thereof thereof, for a price to be paid in installments; (ii) an agreement by any Mortgage Borrower leasing all or a substantial part substantially all of the Property or Properties owned by such Mortgage Borrower for other than actual occupancy by a space Tenant thereunder tenant thereunder, or a sale, assignment or other transfer of, or the grant of a security interest in, such Mortgage Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following transfers shall not be required deemed to be a Transfer, and so long as all of the applicable conditions contained therein shall have been fulfilled, such transfer may occur without consent from Lender: (i) transfers of shares in ▇▇▇▇ Credit Property Trust I, Inc. or ▇▇▇▇ Credit Property Trust III, Inc. or (ii) transfers of ownership interests in any Restricted Party and ownership interests in any member, partner or shareholder of any Restricted Party to any Affiliate or subsidiary of a Restricted Party, provided that, at all times, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ Holdings Corporation, ▇▇▇▇ Credit Property Trust I, Inc. or ▇▇▇▇ Credit Property Trust III, Inc. continues to Control the Restricted Party, provided after giving effect to such transfer, (A) the Person receiving such interest and each Restricted Party who shall exist following such transfer, shall be able to satisfy (x) the requirements and representations set forth in Sections 5.2.10(f)(v), (vii) and (viii) of the Mortgage Loan Agreement, and Section 4.1.35 hereof, in each case mutatis, mutandis and if the individual or individuals who have direct or indirect Control over the Person to whom such interests are to be transferred is someone other than ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, such individuals shall be reasonably acceptable to Lender and (B) Borrower shall execute, or cause the applicable Person or Persons to execute, without any cost or expense to Lender, such documents and agreements as Lender may reasonably require to evidence and effectuate said transfer and deliver such legal opinions as Lender may require, including, without limitation, a pledge substantially in the form of the Pledge Agreement, a new UCC Title Insurance Policy and a new mezzanine endorsement to the Owner’s Title Policy, new UCC Financing Statements or amendments to any existing UCC Financing Statements, new Certificates evidencing the Pledged Company Interests, and any other ancillary documents substantially similar to the Loan Documents executed on the Closing Date as Lender may reasonably require, all in form and substance satisfactory to Lender. It shall be a condition of any such transfer specified in the foregoing clause (ii) that Lender shall have received written confirmation from the parties to the Management Agreement that provides that all Properties, which are the subject of any such transfer, shall have been removed from the application of such Management Agreement. Lender agrees that, in connection with one or any transfer contemplated by the foregoing clause (ii), Borrower shall have the right to substitute a series replacement guarantor for Guarantor under the Loan Documents, provided that the replacement guarantor (A) shall have a net worth at least equal to $150,000,000 and liquidity at least equal to $5,000,000, as shown on a current balance sheet of Transferssuch replacement guarantor, of not more than ten percent (10%B) shall have made the representations and met the requirements set forth in Sections 4.1.1, 4.1.2, 4.1.3, 4.1.11, 4.1.18, 4.1.37, 4.1.35 hereof and Section 5.2.10(f)(v), (vii) and (viii) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Mortgage Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the PropertyAgreement, which expertise apply to Guarantor, such that the replacement guarantor shall be reasonably determined by Lender;
deemed to make such representations and fulfill such requirements, mutatis, mutandis, (ivC) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must shall not have been a party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
such transfer, (viD) Transferee shall assume all of the obligations of Borrower under the Loan Documents not be involved in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no any pending or threatened material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
, and (viiiE) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee . Upon the execution and Transferee’s Principals must be able delivery of any documents necessary to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of consummate such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreementsubstitution, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or original Guarantor shall be released from all liability and obligations under the Guaranty, the Environmental Indemnity and the other Loan Documents with respect to any guaranty acts or indemnity agreement by virtue omissions after any such replacement guarantor shall have executed and delivered a replacement Guaranty and fulfilled all of the Additional Permitted Transfer; conditions set forth in the immediately preceding sentence.
(De) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s a Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
(f) In the event Mortgage Borrowers desire to transfer all of the Properties pursuant to Section 5.2.10(f) of the Mortgage Loan Agreement, Borrower must provide written notice of such proposed transfer to Lender contemporaneously with Mortgage Borrowers’ notification of Mortgage Lender pursuant to Section 5.2.10(f) of the Mortgage Loan Agreement, together with such information concerning the transferee(s) and the transferee(s)’ direct and indirect owners and Affiliates as Mortgage Borrowers are required to deliver to Mortgage Lender pursuant to Section 5.2.10(f) of the Mortgage Loan Agreement. Such transferee(s) and the owners of the equity interests in the transferee(s), who shall replace the Borrower, shall have an aggregate net worth and liquidity reasonably acceptable to the Lender, and the Lender must otherwise approve all other aspects of such transfer and the related elements that might affect Lender’s security interest in such transferee(s) and the owner(s) of equity interests in such transferee(s). Lender shall have fifteen (15) days from receipt of Borrower’s notice to approve of or object to the proposed transfer. If Lender objects to the proposed transfer within said fifteen (15) days, Borrower shall not permit Mortgage Borrowers to transfer the Properties in accordance with Section 5.2.10(f) of the Mortgage Loan Agreement. If Lender fails to respond within said fifteen (15) days, and Borrower sends a second request for approval containing a legend clearly marked in not less than fourteen (14) point bold fact type, underlined, in all capital letters “REQUEST DEEMED APPROVED IF NO RESPONSE WITHIN FIFTEEN (15) DAYS”, Lender shall be deemed to have approved such transfer of the Properties if Lender fails to respond to such second written request before expiration of such fifteen (15) day period. Upon a transfer in accordance with Section 5.2.10(f) of the Mortgage Loan Agreement, Borrower shall execute, or cause the applicable Person or Persons to execute, without any cost or expense to Lender, such documents and agreements as Lender may reasonably require to evidence and effectuate said transfer and deliver such legal opinions as Lender may require, including, without limitation, a pledge substantially in the form of the Pledge Agreement, a new UCC Title Insurance Policy and a new mezzanine endorsement to the Owner’s Title Policy, new UCC Financing Statements or amendments to any existing UCC Financing Statements, new Certificates evidencing the Pledged Company Interests, and any other ancillary documents substantially similar to the Loan Documents executed on the Closing Date as Lender may reasonably require, all in form and substance satisfactory to Lender.
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Cole Credit Property Trust Inc)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower Owner and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on BorrowerOwner’s ownership and control of the Property Properties as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise expressly permitted and set forth in Article 2 or this Section 5.2.105.2.11, Borrower shall not, shall not permit Owner to and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Individual Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an a direct or indirect ownership interest in any Restricted PartyParty (collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into permit a Sale or Pledge of all or any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any part of the foregoing without Lender's prior written consentCollateral.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower Owner agrees to sell the an Individual Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower Owner leasing all or a substantial part of the an Individual Property for other than actual occupancy or actual operation by a space Tenant tenant or operator thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.105.2.10 or any other provisions of any Loan Document, Lender’s the following shall be permitted without the consent shall not be required of Lender or Servicer: (i) the Sale or Pledge or other Transfer, in connection with one or a series of Transferstransactions, of not more than ten percent (10%) indirect ownership interests in Borrower provided that immediately after such Transfer Guarantor must continue to Control Borrower and own, directly or indirectly, at least a 51% interest in Borrower and the Sale or Pledge or other Transfer of any ownership interest in Guarantor. As used herein, the term “Control” means the possession, directly or indirectly of the stockpower to direct or cause the direction of the management and policies of the Person in question through the ownership of voting securities, by contract or otherwise.
(e) No consent to any assumption of the Loan shall occur on or before the first anniversary of the first Payment Date. Thereafter, Lender reserves the right to condition the consent required hereunder upon (a) a modification of the terms hereof, the limited partnership interests Note, the Pledge or non-managing membership interests the other Loan Documents; (b) an assumption of this Agreement, the Note, the Pledge and the other Loan Documents as so modified by the case may beproposed transferee, subject to the provisions of Section 9.4 hereof; (c) in a Restricted Party; provided, however, no such Transfer shall result in the Change payment of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal all of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs fees and expenses incurred in connection with such Transfers (including Lender’s counsel Transfer including, without limitation, the cost of any third party reports, legal fees and disbursements and any expenses, Rating Agency fees and expenses of or required legal opinions; (d) the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver payment of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer non-refundable $5,000 application fee and an assumption fee equal to one percent (1%) of the outstanding principal balance of the Loan at Loan; (e) the time delivery of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of a nonconsolidation opinion reflecting the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner transfer satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
; (viif) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transfereethe proposed transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations continued compliance with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 Section 4.1.30 and Section 5.2.9 hereof; (g) the delivery of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably evidence satisfactory to Lender that the single purpose nature and bankruptcy remoteness of Borrower, its shareholders, partners or members, as the case may be, following such transfers are in accordance with the then current standards of Lender and the Rating Agencies; (Bh) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior prior to any release of the Guarantor, one (1) or more a substitute guarantors guarantor acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute executed a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
; (xii) Borrower shall deliverif required by Lender, at its sole cost and expense, an endorsement confirmation in writing from the Rating Agencies to the Title Insurance Policyeffect that such transfer will not result in a re-qualification, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner reduction or withdrawal of the Propertythen current rating assigned to the Securities or any class thereof in any applicable Securitization; (j) such other conditions as Lender shall determine in its reasonable discretion to be in the interest of Lender, which endorsement shall insure thatincluding, as without limitation, the creditworthiness, reputation and qualifications of the date transferee with respect to the Loan and the Collateral; and (k) if the Properties are being transferred, a concurrent assumption of the recording Senior Loan by one or more wholly owned subsidiaries of the assumption agreement, transferee with the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager consent of Senior Lender pursuant to a Replacement Management Agreement; and
(xiiiSection 5.2.10(e) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operationSenior Loan Agreement.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s a Transfer without Lender’s consent. This provision shall apply to every Transfer other than a Transfer permitted under Section 5.2.10(b) or (d) regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the creditworthiness and experience of Borrower and its stockholdersthe Restricted Parties, general partnersas applicable, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loanloan secured by the Security Instrument, and that Lender will continue to rely on Borrower’s such Restricted Parties’ direct or indirect ownership and control and/or operation of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other ObligationsDebt. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the shall not without Lender’s prior written consent of Lender(not to be unreasonably withheld, conditioned or delayed) and except to the extent as otherwise set forth expressly provided in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): : (i) sell, assign, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, transfer or otherwise dispose of its legal or beneficial interests in the Property or any part thereof other than pursuant to Leases permitted under, and entered into in accordance with, Section 5.1.20 hereof, and/or with respect to other Permitted Encumbrances, (ii) permit any owner, directly or indirectly, of an ownership interest the Property, to transfer or dispose of such interest, whether by transfer of stock or other interest in a Restricted Party, or otherwise, (iii) [intentionally omitted], (iv) mortgage, hypothecate or otherwise encumber or grant a security interest in the Property or any part thereof, (v) sell, assign, convey, transfer, mortgage, encumber, grant a security interest in, or otherwise transfer or dispose of any direct or indirect ownership interest in any Restricted Party, or permit any Restricted Party that owns an interest in another Restricted Party to do the same, or (directly or indirectlyvi) file a declaration of condominium with respect to the Property (any of the foregoing transactions, voluntarily or involuntarilya “Transfer”). Notwithstanding the foregoing, by operation for purposes hereof, a “Transfer” shall not include Permitted Transfers. Further notwithstanding the foregoing, for purposes of law or otherwisedetermining recourse liability pursuant to Section 9.3, and whether or a “Transfer” shall not for consideration or include any of recordthe following (1) the Property granting of, amendment of, extension or renewal of, or any part thereof or other action taken with respect to any legal or beneficial interest therein or Permitted Encumbrance (without limiting Borrower’s obligations with respect to any interest Permitted Encumbrances pursuant to the terms and provisions of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents), (2) the settlement of any claim, dispute, litigation or regulatory proceeding (ii) permit a Sale or Pledge of an interest in without limiting Borrower’s obligations with respect to any Restricted Party, other than (A) such settlements pursuant to Leases of space in the Improvements to Tenants in accordance with the terms and provisions of Section 5.1.20 this Agreement and the other Loan Documents), (B3) Permitted Transfersthe expenditure of funds by Borrower or any other Restricted Party (without limiting Borrower’s obligations with respect to any such expenditures pursuant to the terms and provisions of this Agreement and the other Loan Documents), or (iii4) enter into any plan the disposition or removal of divisionpersonal property owned or leased by Major Tenant to the extent not prohibited under the Major Tenant Lease, or divideprovided, establish a protected serieshowever, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentshall not preclude a determination that the foregoing result in recourse liability for reasons other than being deemed a Transfer.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(db) Notwithstanding the provisions of this Section 5.2.105.2.10(a), Lender’s consent shall not be required in connection with (1) one or a series of Transfers, of not more than ten up to forty-nine percent (1049%) of the stock, the limited partnership interests, membership interests or non-managing membership beneficial interests (as the case may be) in a Restricted Party, (2) one or a series of Transfers of the stock in Sponsor, (3) one or a series of Transfers of the limited partnership interests in Operating Partnership and (4) one or a series of Transfers of the direct membership interests owned as of the Closing Date by CF Loyalty Holdings, LLC in Borrower to the Operating Partnership; provided, however, no (x) after giving effect to each such Transfer described in clauses (1), (2), (3) and (4), Borrower and Guarantor each shall result be Controlled, directly or indirectly, by CFLP (or in connection with any Transfer pursuant to clause (4) above resulting in Operating Partnership acquiring ninety-five percent (95%) of the Change of Control membership interests owned by CF Loyalty Holdings, LLC in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, Sponsor), and Borrower shall continue to comply with the representations, warranties and covenants under Sections 4.1.30 (Special Purpose Entity), 4.1.34 (Investment Company Act), 4.1.35 (Embargoed Persons), 5.1.23 (Embargoed Persons) and 5.2.9 (ERISA) and upon reasonable request of Lender, from time to time, Borrower will reaffirm its ongoing compliance with the same; and (y) as a condition to any Transfers described in clause (4) above, upon Operating Partnership acquiring ninety-five percent (95%) of the membership interest owned by CF Loyalty Holdings, LLC in Borrower, (A) Sponsor shall have assumed all of the obligations of Guarantor under the Loan Documents and become the replacement Guarantor in accordance with the terms of the Loan Documents, (B) Borrower shall have delivered prior written notice to Lender of such Transfer and (C) the Operating Partnership shall have become the managing member of Borrower in accordance with the terms of Borrower’s operating agreement and Operating Partnership shall Control Borrower and the Property. In addition, (i) after giving effect to each such Transfer, Lender Guarantor (or a Qualified Replacement Guarantor) shall receive Control the Borrower or be under common Control with the Borrower, and (ii) if such Transfer is a Material Owner Transfer, Borrower shall deliver with respect to each transferee, prior to such transfer and at Borrower’s sole cost and expense, “know your customer” searches confirming compliance with the sections referenced above, and verifying the transferee has not less than been convicted of a felony, is not then, nor has it been in the prior seven (7) years, the subject of a Bankruptcy Action. If a Transfer described in this clause (b) involves a Transfer of a direct interest in Borrower, no such Transfer shall be permitted during the period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization.
(c) Notwithstanding Section 5.2.10(a), Lender’s consent shall not be required in connection with a Transfer of the direct or indirect interests in Borrower; provided, however, that after giving effect to such Transfer, Borrower and Guarantor each shall be Controlled, directly or indirectly, by CFLP, and after giving effect to such Transfer, Borrower shall continue to comply with the representations, warranties and covenants under Sections 4.1.30 (Special Purpose Entity), 4.1.34 (Investment Company Act), 4.1.35 (Embargoed Persons), 5.1.23 (Embargoed Persons) and 5.2.9 (ERISA). Upon reasonable request of Lender, from time to time, Borrower will reaffirm its ongoing compliance with the same. In addition, (i) Guarantor or a Qualified Replacement Guarantor at all times must continue to Control the Borrower, or be under common Control with the entity that Controls Borrower, and (ii) if such Transfer is a Material Owner Transfer, Borrower shall deliver with respect to each transferee, prior to such transfer and at Borrower’s sole cost and expense, “know your customer” searches confirming compliance with the sections referenced above, and verifying the transferee has not been convicted of a felony, is not then, nor has it been in the prior seven (7) years, the subject of a Bankruptcy Action. If a Transfer described in this clause (c) involves a Transfer of a direct interest in Borrower, no such Transfer shall be permitted during the period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization;
(d) Notwithstanding Section 5.2.10(a), at any time other than during the period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization, Borrower may undertake one or more Transfers of the entire Property to an unrelated third party transferee (or a Transfer of more than fifty percent (50%) of the direct or indirect beneficial interests in Borrower to an unrelated third party transferee in a single Transfer, to the extent such Transfer is not otherwise compliant with clause (c) above) and assumption of the entire Loan, provided that Lender receives thirty (30) days’ prior written notice of such proposed Transfer. Borrower shall pay any Transfer and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) the proposed transferee of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower Property shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee be a Special Purpose Entity (the “Transferee”) or Transferee’s Principals which at the time of such transfer will be in compliance with, and must be able to satisfy all of, the representations, warranties and covenants contained in Section 4.1.30, Section 4.1.35, Section 5.1.23 and Section 5.2.9 and which shall have demonstrated expertise assumed in owning and operating properties similar in location, size, class and operation writing (subject to the Propertyterms of Section 9.3 hereof) and agreed to comply with all the terms, which expertise shall be reasonably determined by Lendercovenants and conditions set forth in this Agreement and the other Loan Documents, expressly including, without limitation the representations, warranties and covenants contained in Section 4.1.30, Section 4.1.35, Section 5.1.1 and Section 5.1.23 hereof;
(ivii) if the Loan is held by a REMIC Trust, Borrower shall deliver confirmation in writing from the Rating Agencies that such proposed Transfer will not cause a downgrading, withdrawal, reduction or qualification of the ratings in effect immediately prior to such Transfer for the Securities, or any class thereof, issued in connection with a Securitization which are then outstanding;
(iii) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity be (or be Controlled by) a Person satisfying the requirements for a Qualified Replacement Guarantor, Qualified Fund Manager or Qualified Real Estate Investor, or otherwise be reasonably acceptable to Lender;
(iv) Lender shall have received with respect to Transferee, prior to such Transfer and at Borrower’s sole cost and expense, “know your customer” searches confirming compliance with the sections referenced in clause (i) above, and verifying the transferee has not been convicted of a felony, is not then, nor has it been in the prior seven (7) years, the subject of a Bankruptcy Action;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer, unless otherwise reasonably acceptable to Lender;
(vi) if the Transfer involves Transfer of the Property, Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner reasonably satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance reasonably satisfactory to Lender;
(vii) There there shall be no material litigation or regulatory action pending or threatened threatened, in writing, against Transferee, Transferee or Controlling Transferee’s Principals which in Lender’s reasonable judgment would likely result in a material adverse change in the financial condition, operations or Related Entities which is not acceptable to Lenderbusiness of Transferee or Guarantor;
(viii) Transfereeunless the Property is self-managed, the Property shall be managed by a Qualified Manager pursuant to a replacement Management Agreement;
(ix) Transferee and Controlling Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ixx) Transferee no Event of Default shall have occurred and Transferee’s Principals must be able to satisfy all the representations continuing and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) if the Transfer involves a Transfer of the Property, Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance PolicyPolicy insuring the Security Instrument, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the fee estate (or leasehold estate, as applicable) of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted EncumbrancesEncumbrances relating thereto;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and[Reserved];
(xiii) The Property meets proposed Transfer shall be permitted under the terms of each Major Lease and Borrower shall have assigned each Lease to Transferee and Transferee shall have assumed, in writing, all obligations of landlord under each Lease;
(xiv) The proposed Transfer shall be permitted under the terms of the CRA and the Transferee shall have obtained an assumption agreement (in the form attached as an exhibit to the CRA agreement or such other form as may be required by the City at such time) from the City in accordance with the terms of the CRA Agreement;
(xv) Transferee, at its sole cost and expense, shall deliver opinions regarding existence, authority and enforceability, which opinions may be relied upon by Lender, the Rating Agencies and their respective counsel, agents and representatives with respect to the proposed transaction;
(xvi) Transferee shall deliver (1) all organizational documentation reasonably requested by Lender, which shall evidence due formation and existence, and shall comply with Section 4.1.30, and (2) all certificates, agreements or covenants reasonably required by Lender, provided that, in each case, the same do not increase its obligations, decrease its rights, or otherwise adversely affect Borrower, any other Affiliate of Borrower or Transferee, in each case, except to a de minimis extent;
(xvii) Prior to any release of Guarantor, if such a release is requested by Borrower, one (1) or more Qualified Replacement Guarantors (or substitute guarantors reasonably acceptable to Lender) shall have assumed all of the Lender’s underwriting standards related liabilities and obligations first arising thereafter of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to its financial condition, cash flow, operating income, physical condition, management Lender (and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to upon the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application execution of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or memberssame, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or then-existing Guarantor shall be released from any guaranty or indemnity agreement by virtue of and all liabilities under the Additional Permitted Transfer; Guaranty and Environmental Indemnity with respect to events first occurring thereafter);
(Dxviii) Borrower shall be responsible for have paid an assumption fee equal to (A) one-quarter of one percent (0.25%) of the costs then Outstanding Principal Balance in connection with the first such Transfer, and expenses (B) one percent (1.0%) of documenting the Additional Permitted then Outstanding Principal Balance in connection with the any subsequent Transfer; and
(Exix) Borrower shall reimburse Lender for pay (or cause to be paid) (A) any and all actual reasonable out-of-pocket costs and expenses actually incurred by Lender in connection with such Transfer (including, without limitation, Lender’s reasonable counsel fees and disbursements), (B) all recording fees, title insurance premiums and mortgage and intangible taxes and (C) all the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower fees and management expenses of the Property are Rating Agencies (if any) pursuant to clause (ii) above. With respect to matters above in this Section 5.2.10(d) wherein Lender’s approval, satisfaction or consent is required, it is agreed that Lender shall not condition its approval, satisfaction or consent upon the same persons who have such Control payment of any other fee, and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of not otherwise be required to pay any documentation executed additional fee or expense to Lender, except as specifically provided in connection with the Additional Permitted Transfer promptly after execution thereof; clauses (xvii) and (Hxviii).
(e) Borrower shall have delivered satisfactory evidence [Reserved.]
(f) After any Transfer permitted hereunder or consented to Lender that, following the Additional Permitted Transferby Lender, Borrower shall continue to comply with shall, upon request, provide Lender an updated organizational chart certified by Borrower as true, correct and complete.
(g) [Reserved.]
(h) Notwithstanding the provisions of Section 4.1.31 hereof. Lender 5.2.10(a) above, Lender’s consent shall not be required to demonstrate in connection with a pledge of the direct or indirect interests in Sponsor by an Upstream Borrower as part of a financing secured by all or substantially all of the assets of such Upstream Borrower (such financing, together with any actual impairment renewal or replacement financing, an “Upstream Loan”).
(i) Borrower, without the consent of its security or any increased risk Lender, may grant easements, restrictions, covenants, reservations and right of default hereunder way in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless ordinary course of whether voluntary or notbusiness for access, or whether or not Lender has consented to any previous Transfer.par
Appears in 1 contract
Transfers. (a) Borrower acknowledges Borrower, Operating Lessee and each other Loan Party acknowledge that Lender has examined and relied on the experience of Borrower Borrower, Operating Lessee and its stockholders, each other Loan Party and their general partners, members, Key Principals principals and (if Borrower Borrower, Operating Lessee or such other Loan Party is a trust) beneficial owners in owning and operating properties and other assets such as the Property Properties and the other Collateral in agreeing to make the Loan, and will continue to rely on Borrower’s, Operating Lessee’s and the other Loan Party’s ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges Borrower, Operating Lessee and the other Loan Parties acknowledge that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower (or any other Loan Party that is liable for the Debt, whether as a primary obligor or as a guarantor thereof) default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of LenderLender and except for (a) Permitted Encumbrances, (b) the release of any Individual Property in accordance with Section 2.5 or Section 6.4, and except (c) to the extent otherwise set forth in this Section 5.2.10, Borrower Borrower, Operating Lessee and the other Loan Parties shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Transfer Collateral or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, Party other than (A) pursuant to (I) Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (II) occupancy agreements with hotel guests, and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentDebt.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower Borrower, Operating Lessee or any other Loan Party agrees to sell the Property applicable Transfer Collateral or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower and/or Operating Lessee leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s, Operating Lessee’s or any other Loan Party’s (as applicable) right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following shall not be required in connection with deemed to be a Transfer:
(i) A Permitted Transfer; provided, that, (A) after giving effect to such Permitted Transfer, BREP VII (1) shall own not less than fifty-one or a series of Transfers, of not more than ten percent (1051%) of the stock, the limited partnership direct or indirect legal and beneficial interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, Operating Lessee and as a condition any other Loan Party (on an unencumbered and look-through basis and without regard to the Preferred Shares) and (2) shall Control Borrower, Operating Lessee and each such Transferother Loan Party, (B) Lender shall receive notice of any Sale or Pledge described in this Section 5.2.10(d)(i) not less than thirty (30) days prior written following the consummation thereof (but the failure to deliver any such notice shall not cause the applicable Permitted Transfer to be a Transfer and shall not constitute an Event of Default unless such failure continues for ten (10) Business Days following notice of such proposed Transfer. failure from Lender), (C) no Permitted Transfer of any direct interest in any Borrower or other Loan Party pledged as a portion of the Transfer Collateral shall be permitted, (D) for so long as the Mezzanine A Loan shall remain outstanding, no such Permitted Transfer of any direct interests in any Loan Party shall be permitted, (E) for so long as the Mezzanine B Loan shall remain outstanding, no such Permitted Transfer of any direct interests in Mezzanine A Borrower shall pay be permitted, (F) for so long as the Loan or any Mezzanine Loan shall remain outstanding, (i) no pledge or other encumbrance of any direct interests in any Restricted Pledge Party shall be permitted (other than the pledges securing the Loan, the Mezzanine A Loan or the Mezzanine B Loan), and all reasonable outexcept that a pledge of the direct ownership interests in the most upper-tier Restricted Pledge Party shall be permitted if such pledge directly or indirectly secures indebtedness that is also directly or indirectly secured by substantial assets other than the Transfer Collateral; and (ii) no Restricted Pledge Party shall issue preferred equity that has the characteristics of mezzanine debt (such as a fixed maturity date, regular payments of interest, a fixed rate of return and rights of the equity holder to demand repayment of its investment), and (G) no Individual Borrower, Operating Lessee or other Loan Party shall fail to be a Special Purpose Entity by reason of such Sale or Pledge. If after giving effect to any such Permitted Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party (excluding any Restricted Party that no longer owns a direct or indirect interest in a Loan Party after such Transfer and excluding the Preferred Shares) are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party (excluding any Restricted Party that no longer owns a direct or indirect interest in a Loan Party after such Transfer and excluding the Preferred Shares) as of the Closing Date, Borrower, Operating Lessee or such other Loan Party shall deliver to Lender an Additional Insolvency Opinion acceptable to Lender and the Approved Rating Agencies. Notwithstanding anything to the contrary contained in this Agreement, no notice to, or consent of, Lender shall be required in connection with any Permitted Transfer in any Excluded Entity.
(ii) A (x) Public Listing or (y) Public Sale; provided in the case of both (x) and (y) that (A) if after giving effect to any such Public Listing or Public Sale, more than forty-pocket costs nine percent (49%) in the aggregate of direct or indirect interests in the Restricted Party are owned by any Person and expenses incurred its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and the Approved Rating Agencies, (B) Lender shall have received a Rating Agency Confirmation from each of the Approved Rating Agencies with respect to such Public Listing or Public Sale, (C) no Individual Borrower, Operating Lessee or other Loan Party shall fail to be a Special Purpose Entity by reason of such Public Listing or Public Sale, (D) for so long as the Loan shall remain outstanding, no Sale or Pledge of any direct interest in any Borrower, Operating Lessee or other Loan Party shall be permitted in connection with such Transfers Public Listing or Public Sale, (including Lender’s counsel fees and disbursements and any fees and expenses E) for so long as the Mezzanine A Loan shall remain outstanding, no Sale or Pledge of the Rating Agencies).
direct interests in any Loan Party shall be permitted in connection such Public Listing or Public Sale, (eF) Without limiting Lender’s discretion to approve for so long as the Mezzanine B Loan shall remain outstanding, no Sale or disapprove Pledge of any request direct interests in Mezzanine A Borrower shall be permitted in connection such Public Listing or Public Sale, and (G) for a waiver of so long as the prohibition against TransfersLoan or any Mezzanine Loan shall remain outstanding, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower no pledge or other encumbrance of any direct interests in any Restricted Pledge Party shall pay Lender a transfer fee equal to one percent be permitted (1%other than the pledges securing the Loan, the Mezzanine A Loan or the Mezzanine B Loan) of the outstanding principal balance of the Loan at the time of such transfer;
and (ii) Borrower no Restricted Pledge Party shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transferissue preferred equity interests (except as otherwise permitted pursuant to the Loan Documents, including Lender’s counsel fees and disbursements and all recording feesMezzanine A Loan Documents or Mezzanine B Loan Documents, title insurance premiums and mortgage and intangible taxes;as applicable).
(iii) The proposed transferee (the “Transferee”) Sale or Transferee’s Principals must have demonstrated expertise Pledge, in owning and operating properties similar in locationone or a series of transactions, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth direct or indirect equity interests in Borrower and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness Loan Party or direct or indirect interests in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31any Restricted Party; provided, 4.1.35that, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lenderafter giving effect to such Sale or Pledge, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one BREP VII (1) or more substitute guarantors acceptable to Lender shall have assumed all own not less than fifty-one percent (51%) of the liabilities direct or indirect legal and obligations of Guarantor under the Guaranty beneficial interests in Borrower, Operating Lessee and Environmental Indemnity executed by Guarantor or execute a replacement guaranty any other Loan Party (on an unencumbered and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost look-through basis and expense, an endorsement without regard to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xiiPreferred Shares) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii2) to immediate family members (which shall be limited to a spouseControl Borrower, parentOperating Lessee and each other Loan Party, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s shall receive notice of the Additional Permitted Transfer no any Sale or Pledge described in this Section 5.2.10(d)(iii) not less than 30 thirty (30) days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue consummation thereof (but the failure to comply with the provisions of Section 4.1.31 hereof. Lender deliver any such notice shall not cause the applicable Sale or Pledge to be required to demonstrate any actual impairment a Transfer and shall not constitute an Event of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.Default unless such failure continues for ten
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals members and (if Borrower is a trust) beneficial owners owners, as applicable, and principals of Borrower in owning and operating properties such as the Property Collateral in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligationsother obligations of Borrower set forth in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsother obligations of Borrower set forth in the Loan Documents, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) any Individual Property, or all or any part of the Property Collateral or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than than, in either case, to the extent that such Transfer constitutes a Permitted Transfer. Any Transfer made without Lender’s prior written consent (A) to the extent that such consent is required pursuant to Leases this Section 5.2.10) shall be null and void. For the avoidance of space doubt, notwithstanding anything in this Agreement to the Improvements to Tenants contrary, the Sale or Pledge of a direct or indirect interest in accordance with an Excluded Entity shall not constitute a Transfer and may be effectuated by the provisions of Section 5.1.20 and (B) Permitted Transfersapplicable Person without the consent of, or (iii) enter into any plan of divisionnotice to, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Collateral or any part thereof or Mortgage Borrower agrees to sell the Individual Property or any part thereof thereof, in each case for a price to be paid in installments; (ii) an agreement by Mortgage Borrower leasing all or a substantial part of the an Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-non- member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.105.2.10 but subject to the final two sentences of this Section 5.2.10(d), Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (provided that, in the case of any multi-member Restricted Party, excluding any interests of the managing member) (as the case may be) in a Restricted Party; provided, however, (i) no such Transfer shall result in the Change change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and (ii) as a condition to each such Transfer, Lender shall receive not less than thirty (30) days days’ prior written notice of such proposed Transfer. , and (iii) if after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall pay shall, no less than thirty (30) days prior to the effective date of any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of Transfer, deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and, following a Securitization, acceptable to the Rating Agencies. Notwithstanding anything contained in this Section 5.2.10(d), no Transfer of any direct ownership interests in any Borrower, any SPE Constituent Entity, any Mortgage Borrower, any Mortgage SPE Constituent Entity, any Junior Mezzanine Borrower or any Junior Mezzanine SPE Entity shall be permitted. In addition, at all times, Guarantor must continue to Control Borrower, each SPE Constituent Entity, Mortgage Borrower, each Mortgage SPE Constituent Entity, each Junior Mezzanine Borrower, and each Junior Mezzanine SPE Constituent Entity and own, directly or indirectly, at least a fifty-one percent (51%) legal and beneficial interest in Borrower, each SPE Constituent Entity, Mortgage Borrower, each Mortgage Borrower SPE Constituent Entity, each Junior Mezzanine Borrower, and each Junior Mezzanine SPE Constituent Entity.
(e) Without limiting No Transfer of all of the Properties and assumption of the Loan shall occur during the period that is sixty (60) days prior to a Securitization or the period that is sixty (60) days after a Securitization. Otherwise, Lender’s discretion consent to approve or disapprove any request for a waiver one (1) time Transfer of all of the prohibition against TransfersProperties or of Mortgage Borrower and Borrower, in each case, that results in an assumption of the entire Loan and the Mortgage Loan by the proposed Transferee (the “Transferee”) shall be given in Lender’s sole discretion provided that Lender specifically reserves receives sixty (60) days’ prior written notice of such Transfer and no Event of Default has occurred and is continuing at the right time Lender receives such notice and at the time such Transfer is consummated. In determining whether to condition its consent to any waiver of a prohibited proposed Transfer upon satisfaction of pursuant to this Section 5.2.10(e), Lender may require or consider, without limitation, the following minimum conditionsactions and matters:
(i) Borrower shall pay Lender a transfer fee equal to one one-half percent (10.5%) of the outstanding principal balance of the Loan at the time of such transferTransfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums (whether for title insurance with respect to the Properties and/or UCC title insurance with respect to the Collateral) and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) Transferee or Transferee’s Principals Sponsors must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the PropertyProperties, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals Sponsors shall, as of the date of such transferTransfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals Sponsors and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals Sponsors (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals Sponsors or any Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals Sponsors and any Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals SPE Constituent Entities must be able to satisfy make all of the representations set forth in Sections 4.1.30, 4.1.35, and 4.1.38 of each of this Agreement and the Mortgage Loan Agreement, and perform all of the covenants set forth in the respective Sections 4.1.315.1.27, 4.1.35, 5.1.23 5.1.32 and 5.2.9 of each of this Agreement and the Mortgage Loan Agreement, as applicable, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals SPE Constituent Entities shall deliver (A) all organizational documentation Organizational Documents reasonably requested by Lender, which shall be reasonably satisfactory to Lender Lender, and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Following a Securitization, if required by Lender, Transferee shall be approved by the Rating Agencies rating the Loan, which approval, if required by Lender, shall take the form of a Rating Agency Confirmation with respect to such Transfer;
(xi) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and the Environmental Indemnity or executed by Guarantor or execute a replacement guaranty and and/or environmental indemnity agreement reasonably satisfactory to Lender.;
(xixii) Borrower shall deliver, at its sole cost and expense, (A) an endorsement to the UCC Title Insurance PolicyPolicy confirming the Lien of the Pledge Agreement, as modified by the assumption agreement, as a valid first lien on the Property Collateral and naming the Transferee as owner of the PropertyCollateral, which endorsement shall insure that, as of the date of that such Transferee assumes the recording of the assumption agreementLoan, the Property Collateral shall not be subject to any additional exceptions or liens Liens other than those contained in the UCC Title Insurance Policy issued on the date hereof Closing Date and (B) in the case of a Transfer that includes the Transfer of the Properties, an owner’s title insurance policy reasonably acceptable to Lender insuring that the applicable Transferee has (a) good and insurable leasehold title to each Ground Lease Property, (b) good and insurable fee simple title to the real property comprising part of each Individual Property (excluding each Ground Lease Property), and (c) good title to the balance of such Individual Property, free and clear of all Liens whatsoever except Permitted Encumbrances;
(xiixiii) If applicable, the Each Individual Property shall be managed by Qualified Manager (and, if the Qualified Manager managing any one or more Individual Properties prior to the Transfer is being replaced, the replacement Qualified Manager shall manage such Individual Properties pursuant to a Replacement Management Agreement);
(xiv) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender (A) an Additional Insolvency Opinion in respect of such Transfer satisfactory in form and substance to Lender and (B) a fraudulent conveyance opinion in respect of such Transfer, each of which opinions may be relied upon by Lender and the Rating Agencies with respect to the proposed Transfer;
(xv) if the Junior Mezzanine Loan is still outstanding, Junior Mezzanine Borrower shall have complied with all of the terms and conditions set forth in the Junior Mezzanine Loan Documents with respect to the Transfer and to effectuate the assumption of the Junior Mezzanine Loan; and
(xiiixvi) The Property meets Mortgage Borrower shall have complied with all of the Lender’s underwriting standards related terms and conditions set forth in the Mortgage Loan Documents with respect to its financial conditionthe Transfer and the assumption of the Mortgage Loan and Mortgage Lender shall have approved such Transfer pursuant to the Mortgage Loan Documents. Immediately upon the consummation of a Transfer pursuant to this Section 5.2.10(e) (provided that Lender has consented thereto in accordance with the foregoing), cash floweach Borrower and Guarantor shall be released from all liability under this Agreement, operating incomethe Note, physical conditionthe Pledge Agreement and the other Loan Documents and, management in the case of an assumption of the Mortgage Loan, each Mortgage Borrower and operationGuarantor (as defined in the Mortgage Loan Agreement shall be released from all liability under the Mortgage Loan Documents, in each case accruing after the date of such Transfer (other than to the extent such liability is expressly stated herein to survive). The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to provide written evidence thereof if the same is reasonably requested by Borrower.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s the consummation of a purported Transfer without Lender’s consent. This provision shall apply that is prohibited (and as such, null and void) pursuant to every Transfer regardless the terms of whether voluntary or not, or whether or not Lender has consented to any previous Transferthis Section 5.
Appears in 1 contract
Sources: Senior Mezzanine Loan Agreement (Brixmor Property Group Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners owners, as applicable, in owning and operating properties such as the Property Property, in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) . Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Transfer Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, license, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an any interest in any Transfer Restricted PartyParty (any of the actions in the foregoing clauses (i) or (ii), a “Transfer”), other than than, notwithstanding anything to the contrary contained in this Section 5.2.10, (A) pursuant to Leases of space in at the Improvements Property to Tenants tenants in accordance with the provisions of Section 5.1.20 and hereof, (B) a Five Acre Release in accordance with Section 2.5 hereof, (C) Permitted TransfersEncumbrances, (D) the issuance of new stock in, the merger or consolidation of, and/or the Sale or Pledge of the stock in, any Publicly Traded Entity who owns a direct or indirect ownership interest in any Transfer Restricted Party, (iiiE) enter into any plan the transfer of division, indirect ownership interests in Borrower in order to create one or divide, establish a protected series, create a more new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement mezzanine borrowers for any New Mezzanine Loan as contemplated hereunder, (F) the transfer by deed of the Six Acre Parcel to a Subsidiary Transferee and the subsequent transfer of all of the membership interests held by Borrower in such Subsidiary Transferee, in each instance in accordance with Section 5.2.11(d) hereof, as applicable, and (G) the Assumption; provided, however, that in the case of each of the foregoing without Lender's prior written consentclauses (A) – (G), such Transfer shall only be permitted hereunder if it does not violate any Legal Requirements.
(cb) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Transfer Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Transfer Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation resignation, admission or addition of a general partner or the Sale or Pledge of the general partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Transfer Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation resignation, admission or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing or managing membership interests or the creation or issuance of new non non-managing or managing membership interests; or (vi) if a Transfer Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Transfer Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(dc) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall so long as the following Transfers do not be required violate any Legal Requirements in connection with one or a series of Transfers, of not more than ten percent (10%) of the stockany instance, the limited partnership interests following Transfers may occur without the consent of Lender or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change payment of Control in a Restricted Party any transfer or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditionsother fee:
(iA) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage Transfer of any insolvency actdirect or indirect interest in any Transfer Restricted Party, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one provided that (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; , (2) (y) one or both Guarantors continue to Control, directly or indirectly, Borrower, and (z) one or both Guarantors own, directly or indirectly, at least a fifty-one percent (51%) economic interest in Borrower, (3) Lender receives (y) at least ten (10) days prior written notice of any such voluntary Transfer and copies of the documents transferring such interest, or (z) written notice of any such involuntary Transfer and copies of the documents transferring such interest within thirty (30) days following such involuntary Transfer, (4) if after such Transfer any Person and its Affiliates collectively would own more than forty-nine (49%) in the aggregate of the direct and/or indirect interests of Borrower and as of the Closing Date such Person and its Affiliates collectively owned forty-nine percent (49%) or less in the aggregate of the direct and/or indirect interests of Borrower, Lender shall have received, prior to such Transfer, an Additional Insolvency Opinion reasonably satisfactory to Lender and the Rating Agencies and, if a Securitization has occurred, a confirmation in writing from the Rating Agencies to the effect that such Transfer will not result in a re-qualification, reduction or withdrawal of the then current rating assigned to the Securities or any class thereof in any applicable Securitization, and (5) Borrower delivers to Lender a copy of any consents or approvals required by any Governmental Authority in connection with such Transfer;
(B) the Transfer of any direct or indirect interest in any Transfer Restricted Party to any other Person who is, as of the Closing Date, a holder of any direct or indirect interest in any Transfer Restricted Party, provided that (1) no Event of Default has occurred and is continuing, (2) (y) one or both Guarantors continue to Control, directly or indirectly, Borrower, and (z) one or both Guarantors own, directly or indirectly, at least a fifty-one percent (51%) economic interest in Borrower, (3) Lender has received Borrower’s receives (y) at least ten (10) days prior written notice of any such voluntary Transfer and copies of the Additional Permitted documents transferring such interest, or (z) written notice of any such involuntary Transfer no less than 30 and copies of the documents transferring such interest within thirty (30) days prior following such involuntary Transfer, and (4) Borrower delivers to the commencement Lender a copy of any consents or approvals required by any Governmental Authority in connection with such transfer; Transfer;
(C) no indemnitor the Transfer of any direct or Guarantor shall be released from indirect interest in any guaranty Transfer Restricted Party by inheritance, devise, bequest or indemnity agreement by virtue operation of law upon the death of a natural person who owned such interest, provided that (1) such Transfer is to a non-minor member of the immediate family of the deceased holder of such interest or a trust established for the benefit of one or more members of the immediate family of the deceased holder of such interest, (2) (y) one or both Guarantors continue to Control, directly or indirectly, Borrower, and (z) one or both Guarantors own, directly or indirectly, at least a fifty-one percent (51%) economic interest in Borrower, (3) such Transfer shall not result in a change of Control of the day-to-day operations of the Property, (4) Lender receives written notice of such Transfer and copies of the documents transferring such interest not later than thirty (30) days following such Transfer, (5) the legal and financial structure of Borrower and the other Transfer Restricted Parties, and the single purpose nature and bankruptcy remoteness of Borrower and the other Transfer Restricted Parties, after such Transfer shall satisfy the applicable provisions of the Loan Documents, including, without limitation, Section 4.1.30 hereof, (6) if after such Transfer any Person and its Affiliates would collectively own more than forty-nine (49%) in the aggregate of the direct and/or indirect interests of Borrower and as of the Closing Date such Person and its Affiliates collectively owned forty-nine percent (49%) or less in the aggregate of the direct and/or indirect interests of Borrower, Lender shall have received an Additional Permitted Insolvency Opinion reasonably satisfactory to Lender and the Rating Agencies and, if a Securitization has occurred, a confirmation in writing from the Rating Agencies to the effect that such Transfer will not result in a re-qualification, reduction or withdrawal of the then current rating assigned to the Securities or any class thereof in any applicable Securitization, and (7) Borrower delivers to Lender a copy of any consents or approvals required by any Governmental Authority in connection with such Transfer; and
(D) (1) the merger or consolidation of any Guarantor or any Constituent Member of any Guarantor with or into any other Person, (2) the sale of any Guarantor or substantially all of any Guarantor’s assets to any other Person, or (3) the issuance of new stock or limited partnership or membership interests in, and/or the Sale or Pledge of stock, limited partnership or membership interests in, any Guarantor or any Constituent Member thereof (any of the occurrences in the foregoing clauses (1), (2) or (3), a “Guarantor Transfer”); provided, that, in each of the foregoing instances, whether or not the applicable Guarantor or the applicable Constituent Member of a Guarantor is or is not a Publicly Traded Company, (I) after giving effect to such Guarantor Transfer, when viewed both individually and together with any prior Guarantor Transfers, (y) the Guarantors, collectively, shall continue to satisfy the Net Worth Requirements, and (z) at least one of the Guarantors shall be a Qualified Real Estate Guarantor, (II) except if the applicable Guarantor or the applicable Constituent Member of a Guarantor is a Publicly Traded Company, Lender receives at least ten (10) days prior written notice of any such Guarantor Transfer, (III) if after such Guarantor Transfer any Person and its Affiliates collectively would own more than forty-nine (49%) in the aggregate of the direct and/or indirect interests of Borrower and as of the Closing Date such Person and its Affiliates collectively owned forty-nine percent (49%) or less in the aggregate of the direct and/or indirect interests of Borrower, Lender shall have received, prior to such Guarantor Transfer, an Additional Insolvency Opinion reasonably satisfactory to Lender and the Rating Agencies and, if a Securitization has occurred, a confirmation in writing from the Rating Agencies to the effect that such Guarantor Transfer will not result in a re-qualification, reduction or withdrawal of the then current rating assigned to the Securities or any class thereof in any applicable Securitization, and (IV) Borrower delivers to Lender a copy of any consents or approvals required by any Governmental Authority in connection with such Guarantor Transfer.
(d) With respect to any Transfer permitted under this Section 5.2.10 or Section 5.2.11 hereof or otherwise consented to by Lender, Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; pay, in addition to any amounts contemplated under Section 2.5 hereof (E) Borrower shall reimburse Lender for without duplication), all actual costs fees and expenses incurred by Lender in connection with the Additional Permitted such Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is completeincluding, without limitation, the persons with Control cost of Borrower any third party reports, reasonable legal fees and management expenses, Rating Agency fees and expenses and required legal opinions.
(e) Notwithstanding anything to the contrary set forth in this Agreement or in any of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transferother Loan Documents, Borrower expressly acknowledges and agrees, on behalf of itself and the other Transfer Restricted Parties, that any Transfer or Guarantor Transfer stated to be permitted hereunder or thereunder shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall only be permitted if it does not be required to demonstrate violate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous TransferLegal Requirements.
Appears in 1 contract
Transfers. (a) Each Borrower acknowledges that Lender has examined and relied on the experience of each Borrower and its members, stockholders, general partners, members, Key Principals principals and (if any Borrower is a trust) beneficial owners in owners, as applicable, owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s Borrowers’ ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligations. Each Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower Borrowers default in the repayment of the Debt or the performance of the Other ObligationsObligations contained in the Loan Documents, Lender can recover the Debt by a sale of one or more of the PropertyProperties.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, no Borrower shall, and no Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or Properties owned by such Borrower or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an any interest in any Restricted PartyParty or (iii) incur Indebtedness (other than the Indebtedness permitted pursuant to the terms of this Agreement) (any of the foregoing transactions, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and hereof, (B) Permitted Transfers, or the Loan Documents and (iiiC) enter into any plan the Mezzanine Loan and the granting of division, or divide, establish a protected series, create a new registered series, or convert security interests pursuant to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentMezzanine Loan Documents.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein any Borrower agrees to sell the Property or Properties owned by such Borrower, or any part thereof thereof, for a price to be paid in installments; (ii) an agreement by any Borrower leasing all or a substantial part substantially all of the Property or Properties owned by such Borrower for other than actual occupancy by a space Tenant thereunder tenant thereunder, or a sale, assignment or other transfer of, or the grant of a security interest in, such Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, the following transfers shall not be deemed to be a Transfer, and so long as all of the applicable conditions contained therein shall have been fulfilled, such transfer may occur without consent from Lender’s consent : (i) transfers of shares in ▇▇▇▇ Credit Property Trust I, Inc. or ▇▇▇▇ Credit Property Trust III, Inc., (ii) transfers of ownership interests in any Restricted Party and ownership interests in any member, partner or shareholder of any Restricted Party to any Affiliate or subsidiary of a Restricted Party, provided that, at all times, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ Holdings Corporation, ▇▇▇▇ Credit Property Trust I, Inc. or ▇▇▇▇ Credit Property Trust III, Inc. continues to Control the Restricted Party provided after giving effect to such transfer, the Person receiving such interest and each Restricted Party who shall exist following such transfer, shall be able to satisfy the requirements and representations set forth in Section 4.1.35, and Section 5.2.10(f), (v), (vii) and (viii), mutatis, mutandis and if the individual or individuals who have direct or indirect Control over the Person to whom such interests are to be transferred is someone other than ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, such individuals shall be reasonably acceptable to Lender, or (iii) the pledge of equity interests in Borrowers and Principal in connection with the Mezzanine Loan, and the exercise of any rights or remedies of Mezzanine Lender (including foreclosure and an assignment in lieu of foreclosure), as applicable, in accordance with and subject to the terms of the Intercreditor Agreement. It shall be a condition of any such transfer specified in the foregoing clause (ii) that Lender shall have received a written confirmation from the parties to the Management Agreement that provides that all Properties, which are the subject of any such transfer or which are directly or indirectly owned by the Restricted Party and/or any member, partner or shareholder of any Restricted Party whose interest were the subject of any such transfer, shall have been removed from the application of such Management Agreement. Lender agrees that, in connection with any transfer contemplated by the foregoing clause (ii), Borrower shall have the right to substitute a replacement guarantor for Guarantor under the Loan Documents, provided that the replacement guarantor (A) shall have a net worth at least equal to $150,000,000 and liquidity at least equal to $5,000,000, as shown on a current balance sheet of such replacement guarantor, (B) shall have made the representations and met the requirements set forth in Sections 4.1.1, 4.1.2, 4.1.3, 4.1.11, 4.1.18, 4.1.37, 4.1.35 and Section 5.2.10(f)(v), (vii) and (viii), which apply to Guarantor, such that the replacement guarantor shall be deemed to make such representations and fulfill such requirements mutatis, mutandis, (C) shall not have been a party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of such transfer, (D) shall not be involved in any pending or threatened material litigation or regulatory action which is not reasonably acceptable to Lender, and (E) shall not have defaulted under its obligations with respect to any Indebtedness in a manner which is not reasonably acceptable to Lender. Upon the execution and delivery of any documents necessary to consummate such substitution, the original Guarantor shall be released from all liability and obligations under the Guaranty, the Environmental Indemnity and the other Loan Documents with respect to any acts or omissions after any such replacement guarantor shall have executed and delivered a replacement Guaranty and fulfilled all of the conditions set forth in the immediately preceding sentence.
(e) Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in connection with order to declare the Debt immediately due and payable upon a Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
(f) No consent to any assumption of the Loan shall occur on or before the end of the Lockout Period. Thereafter, Lender’s consent to a one or a series (1) time Transfer of Transfers, all of not the Properties (which may be to more than ten percent one (10%1) transferee, provided each such transferee shall either be Transferee’s Sponsor or an Affiliate of Transferee’s Sponsor and assumption of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer Loan shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer not be a Key Principal of Borrower, and as a condition to each such Transfer, unreasonably withheld provided that Lender shall receive receives not less than thirty sixty (3060) days prior written notice of such proposed Transfer. Borrower shall pay any Transfer and all reasonable out-of-pocket costs no Default has occurred and expenses incurred in connection with such Transfers (including Lender’s counsel fees is continuing, and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower Borrowers shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan Outstanding Principal Balance at the time of such transferTransfer;
(ii) Borrower Borrowers shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The Persons comprising the proposed transferee transferees (collectively, the “Transferee”) ), Transferee’s Principal or Transferee’s Principals Sponsor must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to each of the PropertyProperties, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee, Transferee’s Principals principal and the owner of equity interests in Transferee who shall replace the original Mezzanine Borrower as contemplated in clause (xv) below (“Replacement Mezzanine Borrower”) shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender and Mezzanine Lender;
(v) Transferee, Replacement Mezzanine Borrower, Transferee’s Principals or Replacement Mezzanine Borrower’s Principal and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals or Replacement Mezzanine Borrower’s Principal (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume (subject to Section 9.4) all of the obligations of Borrower Borrowers under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender, and a Person (who shall be an Affiliate or direct or indirect equity owner of Transferee; which is herein called “Transferee’s Sponsor”) shall agree at all times (x) to Control each of Transferee, Transferee’s general partner or managing member, if any (“Transferee’s Principal”), Replacement Mezzanine Borrower’s general partner or managing member, if any (“Replacement Mezzanine Borrower’s Principal”), and (y) to own, directly or indirectly, at least a 0.5% beneficial interest in Transferee’s Principal and Replacement Mezzanine Borrower’s Principal, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Replacement Mezzanine Borrower, Transferee’s Principals Principal, Replacement Mezzanine Borrower’s Principal or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Replacement Mezzanine Borrower, Transferee’s Principals Principal, Replacement Mezzanine Borrower’s Principal and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee, Replacement Mezzanine Borrower, Transferee’s Principals Principal and Replacement Mezzanine Borrower’s Principal must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee, Replacement Mezzanine Borrower, Transferee’s Principals Principal and Replacement Mezzanine Borrower’s Principal shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, agreements and covenants and legal opinions reasonably required by Lender provided that such certificates, agreements and covenants shall not increase the obligations of Borrowers under the Loan Documents or decrease the rights of Borrowers under the Loan Documents;
(x) If required by Lender, Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Borrowers or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender;
(xxii) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.;
(xixiii) Borrower Borrowers shall deliver, at its Borrowers’ sole cost and expense, an endorsement to the Title Insurance PolicyPolicies, which endorsement shall insure the Lien of the Mortgages as modified by the assumption agreement, as a valid first lien on each of the Property and naming Properties, shall name the Transferee as owner of the PropertyProperties, which endorsement and shall insure that, as of the date of the recording of the assumption agreement, the Property Properties shall not be subject to any additional exceptions or liens other than those contained in the applicable Title Insurance Policy Policies issued on the date hereof and the Permitted Encumbrances;
(xiixiv) If applicable, the Property The Properties shall be managed by one or more Qualified Manager Managers pursuant to a one or more Replacement Management Agreements;
(xv) Replacement Mezzanine Borrower shall assume the obligations of Mezzanine Borrower under the existing Mezzanine Loan Agreement, Mezzanine Note, and other Mezzanine Loan Documents, except that the pledge agreement securing the Mezzanine Loan shall be modified to grant a pledge of the equity interests in Transferee;
(xvi) The organizational documents of Transferee, Replacement Mezzanine Borrower, Transferee’s Principal and Replacement Mezzanine Borrower’s Principal, shall include provisions which shall cause each of them to be a SPE, and shall otherwise be in form and substance reasonably satisfactory to Lender;
(xvii) Immediately upon a Transfer to such Transferee and the satisfaction of all of the above requirements, the named Borrowers and Guarantor herein shall be released from all liability under this Agreement, the Note, the Mortgages and the other Loan Documents accruing after such Transfer (provided such release of the Guarantor shall be conditioned on one (1) or more substitute guarantors reasonably acceptable to Lender having assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity or entering into new comparable documentation, in each case in accordance with the provisions set forth in the immediately preceding sub-clause(xii)). The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to provide written evidence thereof reasonably requested by Borrowers; and
(xiiixviii) The Property meets all of the Lender’s underwriting standards related Mezzanine Lender shall have permitted its Mezzanine Loan to its financial condition, cash flow, operating income, physical condition, management have been assigned and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender assumed in connection with the Additional Permitted TransferTransfer to be implemented by this Section 5.2.10(f), whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.effe
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Pledged Collateral as a means of maintaining the value of the Property Pledged Collateral as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Pledged Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the PropertyPledged Collateral.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Property, the Pledged Collateral or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty or any assignment of the Operating Lease in violation of the terms of the Mortgage Loan Agreement, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or and (iiiC) enter into subject to the provisions set forth in Section 5.2.10(d), (e) and (f) hereof, any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of Transfer permitted (without obtaining Mortgage Lender’s consent) under the foregoing without Lender's prior written consentMortgage Loan Documents.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property Pledged Collateral or any part thereof, Mezzanine A Borrower agrees to sell the Mezzanine A Pledged Collateral or any part thereof or Mortgage Borrower agrees to sell the Property, or any part thereof, in each case for a price to be paid in installments; (ii) an agreement by Mortgage Borrower or Operating Lessee leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s or Operating Lessee’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following shall not be deemed a Transfer: the Sale or Pledge in one or a series of transactions, of the direct or indirect equity interests in Borrower or direct or indirect interests in any Restricted Party (excluding the direct interests in Mortgage Borrower or any Mezzanine Borrower); provided, that, (i) after giving effect to such Sale or Pledge, (A) BREP VI and/or Strategic (I) shall own not less than fifty-one percent (51%) of the direct or indirect legal, economic and beneficial interests in Borrower, in the aggregate and (II) shall Control Borrower, or (B) (I) Strategic shall own not less than 36.3747% of the direct or indirect legal, economic and beneficial interest in Borrower and (II) an Approved BREP Transferee shall own the remaining direct or indirect, legal, economic and beneficial interests in Borrower (ii) Lender shall receive notice of any Sale or Pledge described in this Section 5.2.10(d) not less than thirty (30) days following the consummation thereof (but the failure to deliver any such notice shall not cause the applicable Sale or Pledge to be a Transfer and shall not constitute an Event of Default unless such failure continues for ten (10) Business Days following notice of such failure from Lender), (iii) no Sale or Pledge of any direct interest in any Mortgage Borrower, Operating Lessee or Mezzanine A Borrower shall be permitted, (iv) for so long as the Loan shall remain outstanding, no such Sale or Pledge of any direct interests in Borrower shall be permitted, (v) for so long as the Mortgage Loan or any Mezzanine Loan shall remain outstanding, (A) no pledge or other encumbrance of any direct interests in any Restricted Pledge Party shall be permitted (other than the pledges securing the Mortgage Loan, the Loan or the Mezzanine A Loan), and except that a pledge of the direct ownership interests in the most upper-tier Restricted Pledge Party shall be permitted if such pledge directly or indirectly secures indebtedness that is also directly or indirectly secured by substantial assets other than the Property and the IP Collateral; and (B) no Restricted Pledge Party shall issue preferred equity that has the characteristics of mezzanine debt (such as a fixed maturity date, regular payments of interest, a fixed rate of return and rights of the equity holder to demand repayment of its investment), and (vi) none of Borrower, Mezzanine A Borrower, Mortgage Borrower, Operating Lessee, Operating Lessee GP or North Beach Company shall fail to be a Special Purpose Entity by reason of such Sale or Pledge. If after giving effect to any such Sale or Pledge, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion acceptable to Lender and the Approved Rating Agencies. Notwithstanding anything to the contrary contained in this Agreement, no notice to, or consent of, Lender shall be required in connection with one any Sale or a series Pledge of Transfers, of not more than ten percent direct or indirect interests in any Excluded Entity.
(10%e) No Transfer of the stock, Property and assumption of the limited partnership Loan shall occur during the period that is sixty (60) days prior to and sixty (60) days after a Securitization. A Transfer of the Property or 100% of the legal or beneficial ownership interests therein or non-managing membership interests in Borrower and assumption of the entire Loan not otherwise permitted by Section 5.2.10(d) to a Qualified Transferee shall be permitted (as the case may be) in a Restricted Party“Permitted Assumption”); provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, provided that Lender shall receive not less than receives thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any Transfer and all reasonable out-of-pocket costs no Event of Default has occurred and expenses incurred in connection with is continuing at the time such Transfers (including Lender’s counsel fees Permitted Assumption is consummated, and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one percent Two Hundred Thousand and No/100 Dollars (1%) of the outstanding principal balance of the Loan at the time of such transfer;$200,000.00).
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferPermitted Assumption (including, including without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Approved Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by LenderIntentionally Omitted;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to LenderIntentionally Omitted;
(v) Transferee, Qualified Transferee and Qualified Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage subject of any insolvency act, or any act for the benefit of debtors Bankruptcy Action within seven (7) years prior to the date of the proposed Transfer;
(vi) Qualified Transferee shall assume all of the obligations of Mortgage Borrower under the Mortgage Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There All of the entities which own interests in the Qualified Transferee similar to the interests in Mortgage Borrower owned by Borrower (the “Mezzanine Entities”): (A) shall assume the Loan and all the agreements of Borrower under the Loan Documents (and without limiting the foregoing, all of the ownership interests in the Qualified Transferee, as applicable, all payments thereon and all proceeds thereof shall be pledged to Lender on terms no material litigation or regulatory action pending or threatened against Transfereeless favorable than the pledge of the Pledged Collateral under the Pledge Agreement), Transferee’s Principals or Related Entities which is not shall be evidenced by new loan documents substantially similar (in form and substance) to the Loan Documents and otherwise reasonably acceptable to Lender in order to properly reflect the new ownership structure and the pledge of the interests thereunder, (B) shall each be a bankruptcy-remote Special Purpose Entity, and (C) shall otherwise have a legal, financial and ownership structure that is (1) substantially the same as Borrower, or (2) at least as favorable to Lender, as determined by Lender in its reasonable discretion, as the legal, financial and ownership structure of Borrower;
(viii) TransfereeThere shall be delivered to Lender opinions of counsel, Transferee’s Principals in form, substance and Related Entities shall not have defaulted under its or their obligations from counsel satisfactory to Lender as Lender requests on the following matters, subject to exceptions and conditions customarily contained in such opinions: (A) an “Additional Insolvency Opinion” with respect to any the Mezzanine Entities and such of their Affiliates as shall be requested by Lender, (B) such other Indebtedness in bankruptcy related opinions as shall be requested by Lender, including an opinion that no fraudulent conveyance or preference results from the transfer of the Property and the assumption by the Mezzanine Entities of the obligations of Borrower of the Loan Documents, and all related transactions, and (C) all certificates, agreements necessary to evidence the Permitted Assumption and a manner which is not due authority, execution and enforceability opinion reasonably acceptable to Lender;
(ix) There shall be no material litigation relating to the creditworthiness or reputation of Qualified Transferee, Qualified Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Qualified Transferee’s Principals (“Related Entities”), or regulatory action pending or threatened against Qualified Transferee, Qualified Transferee’s Principals or any Related Entity;
(x) Intentionally omitted;
(xi) Qualified Transferee must be able to satisfy all representations and covenants in Section 4.1.30 hereof (or in the event of a transfer of 100% of the equity interests in Borrower, Borrower shall continue to satisfy all representations and covenants in Section 4.1.30), and in all cases Qualified Transferee and Qualified Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Qualified Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and, following a Securitization, satisfactory to the Approved Rating Agencies and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(xxii) Prior If required by Lender, following or in connection with a Securitization, Qualified Transferee shall be approved by the Approved Rating Agencies, which approval, if required by Lender, shall take the form of a Rating Agency Confirmation with respect to any release such Permitted Assumption; provided that a written waiver or acknowledgment from one or more of Guarantorthe Approved Rating Agencies indicating its decision not to review the Permitted Assumption for which the Rating Agency Confirmation is sought shall be deemed to satisfy the required for the Rating Agency Confirmation with respect to such Approved Rating Agency.
(xiii) Guarantor shall be released from the Guaranty for all liability accruing after the date of a Transfer, (A) so long as one (1) or more substitute guarantors is a Qualified Transferee (excluding clause (iv) or (v) of the definition thereof) or is otherwise acceptable to Lender shall have in its sole discretion and such substitute guarantor has assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity or has executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender in its sole discretion, in each case covering all liability accruing after the date of such assumption or execution; provided, that such assignment and assumption of the Guaranty and/or replacement guaranty delivered hereunder shall provide that the Debt shall be fully recourse to such replacement guarantor if Borrower fails to obtain Lender’s prior written consent to any Sale or Pledge of the Pledged Collateral or a Transfer of the ownership interests in any Restricted Party as required by Section 5.2.10 hereof and excluding Permitted Transfers, Permitted Encumbrances and any other Lien expressly permitted under the Loan Documents and (B) Borrower has delivered to Lender customary legal opinions relating to authorization and enforceability of the additional guaranty contemplated above, substantially similar in form and substance to the opinions delivered to Lender on the Closing Date relating to the Guaranty, or otherwise in form and substance reasonably acceptable to Lender in its sole discretion, including, to the extent the Guarantor being released was included in the Insolvency Opinion delivered at closing, an Additional Insolvency Opinion with respect to any replacement guarantor.
(xixiv) Borrower shall deliver, at its sole cost and expense, an endorsement to the UCC Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property Pledged Collateral and naming the Qualified Transferee as owner of the PropertyPledged Collateral, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property Pledged Collateral shall not be subject to any additional exceptions or liens other than those contained in the UCC Title Insurance Policy issued on the date hereof and the Permitted Encumbrances relating thereto;
(xv) Lender shall have approved the Qualified Transferee’s owner’s title insurance policy with respect to the Property, subject only to the Permitted Encumbrances;
(xiixvi) If applicable, such Transfer has been approved or deemed approved under the Mortgage Loan Documents by Mortgage Lender and all conditions set forth in the Mortgage Loan Documents relating thereto have been satisfied as determined by Lender in its reasonable discretion and as if each reference therein to “Lender” were to mean Lender and not Mortgage Lender;
(xvii) The Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement;
(xviii) Borrower or Qualified Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (Hxix) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without obtained Lender’s consent. This provision shall apply prior written consent to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.such Permitted Assum
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Strategic Hotels & Resorts, Inc)
Transfers. (a) 14.%2.%3.%4. Borrower acknowledges that Lender has examined and relied on the experience of Borrower Pledgor and its their respective stockholders, general partners, members, Key Principals principals and (if Borrower Pledgor is a trust) beneficial owners in owning and operating properties such as the Property Collateral in agreeing to make the Loan, and will continue to rely on BorrowerPledgor’s ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the PropertyCollateral.
(ba) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(cb) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Collateral, or any part thereof, or Mortgage Borrower agrees to sell the Property or any part thereof thereof, in each case, for a price to be paid in installments; (ii) with the exception of the Operating Lease, an agreement by Mortgage Borrower or Operating Company leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s or Operating Company’s respective right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(dc) Notwithstanding the provisions of this Section 5.2.105.2.10 or any other provision of this Agreement or the Loan Documents, and provided in each case that (i) the Mortgage Loan and the Junior Mezzanine Loan shall have been repaid in full (other than contingent liabilities under the Mortgage Loan Documents and the Junior Mezzanine Loan Documents) or (ii) Mortgage Lender’s and Junior Mezzanine Lender’s consent to such Transfer is not required under the Mortgage Loan Documents or Junior Mezzanine Loan Documents or shall have been obtained, Lender’s consent shall not be required in connection with (A) one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; Party (including the amendment of the organizational documents of such Restricted Party solely for the purpose of reflecting such Transfers), provided, however, no such Transfer shall result in the Change change of Control in a Restricted Party Party, (B) transfers, issuances, conversions and redemptions of stock, membership interests and partnership interests in any one or cause more AHT Corporate Pledge Entities (but excluding pledges other than pledges under the Existing Corporate Financing) and, following a Qualified Prime Transfer, AHP Corporate Pledge Entities (but excluding pledges other than pledges under the AHP Corporate Financing), (C) all transfers of worn out or obsolete furnishings, fixtures or equipment that are reasonably promptly replaced with property of equivalent value and functionality in the ordinary course of operation of the Property, (D) all Transfers (including Permitted Encumbrances) to the extent expressly permitted under any Key Principal other provision of this Agreement or the Loan Documents, (E) Transfers of stock, membership interests or partnership interests in any one or more AHT Corporate Pledge Entities pursuant to an exercise of remedies by the lenders (or an administrative agent on behalf of such lenders) under the Existing Corporate Financing, provided, that, each such lender (and any such administrative agent) is then an institutional lender, (F) Transfers of stock, membership interests or partnership interests in any one or more AHP Corporate Pledge Entities pursuant to an exercise of remedies by the lenders (or an administrative agent on behalf of such lenders) under the AHP Corporate Financing, provided that each such lender (and any such administrative agent) is then an institutional lender, and (G) a Qualified Prime Transfer. Provided, further, that (I) for so long as the Loan, the Mortgage Loan or the Junior Mezzanine Loan shall remain outstanding, (x) no longer pledge or other encumbrance of any direct interests in Borrower, Mortgage Borrower, Principal, Operating Company, Leasehold Pledgor or Junior Mezzanine Borrower shall be a Key Principal permitted (except for liens and encumbrances created by the Loan Documents, the Mortgage Loan Documents or the Junior Mezzanine Loan Documents, as applicable); and (y) none of Borrower, Mortgage Borrower, Principal, Operating Company, Leasehold Pledgor or Junior Mezzanine Borrower shall issue preferred equity that has the characteristics of mezzanine debt (such as a fixed maturity date, regular payments of interest, a fixed rate of return and rights of the equity holder to demand repayment of its investment), and (II) as a condition to each Transfer described in clause (A) or (E) (as to any such Transfer arising prior to a Qualified Prime Transfer) above (1) of more than twenty percent (20%) of the then-outstanding direct or indirect ownership interests in the Person that is the subject of such Transfer or (2) that would result in a change of Control of such Person, Lender shall receive not less than thirty (30) days days’ prior written notice of such proposed Transfer. If after giving effect to any such Transfer described in clause (A), (E) or (F) above, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall, no less than thirty (30) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion. In addition, and notwithstanding anything to the contrary in this Section 5.2.10(d), at all times (x) prior to a Qualified Prime Transfer, AHLP must continue to Control Borrower and Leasehold Pledgor and own, directly or indirectly, at least a fifty-one percent (51%) direct or indirect legal and beneficial interest in each of Borrower and Leasehold Pledgor and (y) upon the occurrence of a Qualified Prime Transfer, and at all times thereafter, AHPLP must continue to Control Borrower and Leasehold Pledgor and own, directly or indirectly, at least a fifty-one percent (51%) legal and beneficial interest in Borrower and Leasehold Pledgor. In addition to and not in limitation of the foregoing, Lender’s consent shall pay any and all reasonable out-of-pocket costs and expenses incurred not be required in connection with such Transfers (including Lender’s counsel fees a Transfer of direct or indirect interests in Borrower and disbursements and any fees and expenses of Leasehold Pledgor made by Junior Mezzanine Borrower to secure the Rating Agencies)Junior Mezzanine Loan in accordance with the Junior Mezzanine Loan Documents.
(ed) Without limiting Lender’s discretion to approve or disapprove any request for Other than a waiver Qualified Prime Transfer, no Transfer of the prohibition against TransfersProperty and assumption of the Loan shall occur during the period that is sixty (60) days prior to and sixty (60) days after a Securitization. Otherwise, Lender specifically reserves the right to condition its shall consent to any waiver of a prohibited one (1) time Transfer upon satisfaction of the Property or the legal or beneficial direct or indirect ownership interests therein or in Borrower and Leasehold Pledgor (if such Transfer is not made in accordance with Section (d) above) and an assumption of the entire Loan pursuant to this Section 5.2.10(e), which consent shall not be unreasonably withheld, conditioned or delayed, provided that Lender receives sixty (60) days’ prior written notice of such Transfer and no Event of Default has occurred and is continuing, and further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Approved Rating Agencies pursuant to clause (x) below);
(iii) The the proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage subject of any insolvency act, or any act for the benefit of debtors Bankruptcy Action within seven (7) years prior to the date of the proposed TransferTransfer (other than an involuntary Bankruptcy Action that was not consented to by such Person and was discharged or dismissed within ninety (90) days of the date such Bankruptcy Action was filed);
(vi) with respect to a Transfer of the Property, Transferee shall assume all of the obligations of Mortgage Borrower and Operating Company, as applicable, under the Mortgage Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There there shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or any Related Entities which which, in each case, is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) with respect to any Transfer of the Property, Transferee must be able to satisfy all representations and covenants in Sections 4.1.30 and 4.1.40 as Transferee, and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and, following a Securitization, satisfactory to the Approved Rating Agencies and (B) all certificates, agreements, covenants agreements and legal opinions reasonably required by Lender;
(x) Prior if required by Lender, Transferee shall be approved by the Approved Rating Agencies, which approval, if required by Lender, shall take the form of a Rating Agency Confirmation with respect to such assumption or Transfer;
(xi) prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.Lender and delivered an Additional Insolvency Opinion covering the replacement guarantor;
(xixii) Borrower shall deliver, at its sole cost and expense, a new UCC Title Insurance Policy or, if reasonably acceptable to Lender, an endorsement to the existing UCC Title Insurance Policy, as modified by the assumption agreement, as a insuring Lender’s valid first lien on the Property Collateral and naming the Transferee as owner of the PropertyCollateral, which new policy or endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property Collateral shall not be subject to any additional exceptions or liens other than those contained in the relevant UCC Title Insurance Policy issued on the date hereof and the Permitted EncumbrancesEncumbrances relating thereto;
(xiixiii) If applicable, the Property shall be managed by Manager or a Qualified Manager pursuant to the Management Agreement or a Replacement Management Agreement;
(xiv) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender (i) an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender and (ii) such other bankruptcy related opinions as shall be requested by Lender, including an opinion that no fraudulent conveyance or preference results from the transfer of the Property and the assumption by the Mezzanine Entities of the obligations of Borrower of the Loan Documents;
(xv) the Junior Mezzanine Loan shall have been repaid in full (other than contingent liabilities under the Junior Mezzanine Loan Documents) or Junior Mezzanine Lender shall have consented in writing to such Transfer, or the Junior Mezzanine Loans shall be assumed by Transferee or its Affiliates in accordance with the terms and conditions contained in the Junior Mezzanine Loan Documents;
(xvi) all of the entities which own interests in the Transferee similar to the interests in Mortgage Borrower owned by Borrower (collectively, the “Mezzanine Entities”) (i) shall assume the Loan and all the agreements of Borrower under the Loan Documents (and without limiting the foregoing, all of the ownership interests in the Transferee, as applicable, all payments thereon and all proceeds thereof shall be pledged to Lender on terms no less favorable than the pledge of the Collateral under the Pledge Agreement), which shall be evidenced by new loan documents substantially similar (in form and substance) to the Loan Documents and otherwise reasonably acceptable to Lender in order to properly reflect the new ownership structure and the pledge of the interests thereunder, (ii) shall each be a bankruptcy-remote Special Purpose Entity, and (iii) shall otherwise have a legal, financial and ownership structure that is (A) substantially the same as Borrower, or (B) at least as favorable to Lender, as determined by Lender in its reasonable discretion, as the legal, financial and ownership structure of Borrower;
(xvii) Lender shall have approved the Transferee’s owners title insurance policy with respect to the Property, subject only to the Permitted Encumbrances; and
(xiiixviii) The Property meets all of such Transfer has been approved under the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.Mortgage Loan Do
Appears in 1 contract
Sources: Senior Mezzanine Loan Agreement (Ashford Hospitality Prime, Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Collateral in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) all or any of the Property Properties, or any portion of any of the Properties, the Mezzanine Collateral, the Operating Leases or the Collateral or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and 5.1.20, (B) Permitted TransfersTransfers pursuant to Section 5.2.10(d) below, or and (iiiC) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert Transfers permitted pursuant to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentSection 5.2.10(d) below.
(c) A Transfer shall include include, but not be limited to: (i) an installment sales agreement wherein Borrower agrees to sell the Property Collateral or any part thereof, Mezzanine Borrower agrees to sell or the Mezzanine Collateral or any part thereof or Mortgage Borrower agrees to sell the Mortgage Collateral or the Properties or any part thereof, in each case for a price to be paid in installments; (ii) an agreement by Mortgage Borrower leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following transfers shall not be required deemed to be a Transfer: (i) the Sale or Pledge, in connection with one or a series of Transferstransactions, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) stock in a Restricted Party; provided, however, no such Transfer Transfers shall result in the Change change of Control voting control in a the Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. , (ii) the Sale or Pledge, in one or a series of transactions, of not more than forty-nine percent (49%) of the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer and (iii) the issuance of newly created stock (and its subsequent sale or transfer) in Hotel Partners or any entity directly or indirectly owning a beneficial interest in Hotel Partners (the “Traded Entity”), provided such stock is listed on the New York Stock Exchange or such other nationally recognized stock exchange and, provided, further, that (A) Borrower shall pay any and to Lender all reasonable out-of-pocket costs administrative costs, all legal fees and expenses reasonably incurred by Lender relating to the initial offering of the Traded Entity, and (B) at all times, Hotel Fund must continue to control Borrower, Operating Lessee, Mezzanine Borrower, Guarantor and Mortgage Borrower and own, directly or indirectly, at least a twenty-five percent (25%) interest in Borrower, Mortgage Borrower, Mezzanine Borrower, Operating Lessee and Guarantor. If after giving effect to any Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date and, provided that the conditions set forth in Section 9.1.2(d) hereof have been satisfied, Borrower shall deliver to Lender an Insolvency Opinion reasonably acceptable to Lender and the Rating Agencies to address the effect of such Transfer(s). In connection with the Transfers permitted under this Section 5.2.10(d), Hotel Partners may simultaneously merge into or with (or otherwise be combined with) the Traded Entity or liquidate so long as Borrower shall deliver to Lender (1) an Insolvency Opinion, provided that the conditions set forth in Section 9.1.2(d) hereof have been satisfied, and (2) a due authorization and enforceability opinion reflecting such Transfer substantially conforming to the opinions delivered in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses the funding of the Rating Agencies)Loan. Notwithstanding anything contained in this Section 5.2.10(d) to the contrary, a Transfer of any direct ownership interests in Mezzanine Borrower, Mortgage Borrower or Operating Lessee shall not be permitted.
(e) Without limiting No assumption of the Loan shall occur on or before the first (1st) anniversary of the first (1st) Payment Date. Thereafter, Lender’s discretion consent to approve a one (1st) time Transfer in the Mortgage Borrower, the Mezzanine Borrower or disapprove any request for a waiver Borrower that results in an assumption of the prohibition against TransfersLoan, Mezzanine Loan or Mortgage Loan shall not be unreasonably withheld provided that Lender specifically reserves the right to condition its consent to any waiver receives sixty (60) days prior written notice of a prohibited such Transfer upon satisfaction hereunder and no Event of Default has occurred and is continuing, and further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Mezzanine Lender shall have approved such Transfer pursuant to the Mezzanine Loan Documents and Mortgage Lender shall have approved such Transfer pursuant to the Mortgage Loan Documents;
(ii) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(iiiii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (xi) below);
(iiiiv) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise shall be a reputable and experienced nationally known first class hotel company possessing at least fifteen (15) years experience in owning and operating properties managing no less than thirty-five (35) full service hotels with a minimum of ten thousand (10,000) rooms and otherwise similar in location, size, class scope, class, use and operation to value as the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Properties or employs a Qualified Manager in lieu of having its own direct property management experience. The term “Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee Principals” shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver include (A) all organizational documentation reasonably requested by LenderTransferee’s managing members, which shall be reasonably satisfactory to Lender general partners or principal majority shareholders and (B) all certificatessuch other members, agreements, covenants and legal opinions reasonably required by Lender;
partners or shareholders which directly or indirectly own a fifty-one percent (x) Prior to any release of Guarantor, one (151%) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities greater economic and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained voting interest in the Title Insurance Policy issued on the date hereof and the Permitted EncumbrancesTransferee;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Sources: Junior Mezzanine Loan Agreement (Sunstone Hotel Investors, Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the creditworthiness and experience of Borrower and its stockholdersgeneral partner, general managing member, limited partners, membersmembers and beneficial owners, Key Principals and (if Borrower is a trust) beneficial owners as applicable, in owning and operating properties such as the Property in agreeing to make the Loanloan secured by the Mortgage, and that Lender will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other ObligationsDebt. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the shall not without Lender’s prior written consent of Lender, and except to the extent as otherwise set forth expressly provided in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”):
(i) sell, assign, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, transfer or otherwise dispose of its legal or beneficial interests in the Property or any part thereof other than pursuant to Leases permitted under, and entered into in accordance with, Section 5.1.20 hereof, (ii) permit any owner, directly or indirectly, of an ownership interest the Property, to transfer or dispose of such interest, whether by transfer of stock or other interest in a Restricted Party, or otherwise, (iii) incur Indebtedness (other than the Indebtedness permitted pursuant to the terms of this Agreement), (iv) mortgage, hypothecate or otherwise encumber or grant a security interest in the Property or any part thereof, (v) sell, assign, convey, transfer, mortgage, encumber, grant a security interest in, or otherwise transfer or dispose of (directly any direct or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an indirect ownership interest in any Restricted Party, other than (A) pursuant to Leases or permit any owner of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or to do the creation or issuance of new legal or beneficial interests; same, or (viivi) file a declaration of condominium with respect to the removal or the resignation Property (any of the managing agent foregoing transactions, a “Transfer”). Notwithstanding anything contained herein to the contrary, any issuance, sale or transfer of non-controlling interests in Inland Diversified Real Estate Trust, Inc. (including an Affiliated Manager“IDRETI”) other than in accordance with Section 5.1.22 hereof(a “Permitted Transfer”) shall not require Lender’s consent.
(db) Notwithstanding At any time other than the provisions of this Section 5.2.10period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten up to forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a such Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. In addition, at all times, Guarantor must continue to (i) Control each Restricted Party, and (ii) own, directly or indirectly, not less than fifty-one percent (51%) of the legal and beneficial interest in each Restricted Party.
(c) At any time other than the period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization, Lender shall not withhold its consent to a Transfer of the entire Property or all of the outstanding ownership interests in Borrower in a single transaction to one newly-formed Special Purpose Entity which shall be a wholly-owned subsidiary of IDRETI (“Permitted Affiliate Transferee”) which shall be approved by Lender in its reasonable discretion (“Permitted Affiliate Transfer”), provided (1) no Event of Default shall have occurred and be continuing, (2) the creditworthiness of IDRETI, as applicable, has not deteriorated, in the sole discretion of Lender, from the Closing Date to the date of the proposed Transfer, and (3) Borrower shall pay any and have paid all reasonable out-of-pocket costs and customary third party expenses (including reasonable attorneys’ fees and disbursements) actually incurred by Lender in connection with such Transfers Transfer (including Lender’s counsel fees and disbursements and but not any fees and expenses of the Rating Agenciesassumption or processing fee).
(ed) Without limiting Lender’s discretion At any time after other than during the period that is thirty (30) days prior to approve or disapprove any request for and thirty (30) days after a waiver of the prohibition against TransfersSecuritization, Lender specifically reserves the right to condition shall not withhold its consent to any waiver of a prohibited Transfer upon satisfaction of the Property and assumption of the Loan, provided that Lender receives thirty (30) days’ prior written notice of such Transfer and further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) the proposed transferee of the outstanding principal balance of Property shall be a Special Purpose Entity (the Loan “Transferee”) which at the time of such transfertransfer will be in compliance with, and must be able to satisfy all of, the representations, warranties and covenants contained in Section 4.1.30, Section 4.1.35, Section 5.1.23 and Section 5.2.9 and which shall have assumed in writing (subject to the terms of Section 9.3 hereof) and agreed to comply with all the terms, covenants and conditions set forth in this Loan Agreement and the other Loan Documents, expressly including, without limitation the representations, warranties and covenants contained in Section 4.1.30, Section 4.1.35, Section 5.1.1 and Section 5.1.23 hereof;
(ii) Borrower shall pay deliver confirmation in writing from the Rating Agencies that such proposed Transfer will not cause a downgrading, withdrawal, reduction or qualification of the ratings in effect immediately prior to such Transfer for the Securities, or any and all reasonable out-of-pocket costs incurred class thereof, issued in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxesa Securitization which are then outstanding;
(iii) The proposed transferee Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity not worse than the net worth and liquidity of Borrower and its Principals as of the date hereof or an aggregate net worth and liquidity otherwise reasonably acceptable to Lender;
(the “Transferee”iv) Transferee or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance reasonably satisfactory to Lender;
(vii) There there shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) the Property shall be managed by a Qualified Manager pursuant to a Replacement Management Agreement;
(ix) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ixx) Transferee no Event of Default shall have occurred and Transferee’s Principals must be able to satisfy all the representations continuing and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer;
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to each existing Title Insurance Policy insuring the related Mortgage, as modified by the assumption agreement, as a valid first lien on the Property and naming Transferee as owner of the fee estate (or leasehold estate, as applicable) of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, such Property shall not be subject to any additional exceptions or liens other than those contained in such Title Insurance Policy issued on the date hereof and the Permitted Encumbrances relating thereto;
(xii) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion (if an Insolvency Opinion was issued in connection with the Closing) reflecting such Transfer satisfactory in form and substance to Lender, which Additional Insolvency Opinion may be relied upon by Lender, the Rating Agencies and their respective counsel, agents and representatives with respect to the proposed transaction, including, without limitation, Transferee;
(xiii) Intentionally omitted;
(xiv) Transferee, at its sole cost and expense, shall deliver opinions regarding existence, authority and enforceability, which opinions may be relied upon by Lender, the Rating Agencies and their respective counsel, agents and representatives with respect to the proposed transaction;
(xv) Transferee and Transferee’s Principals shall deliver (A1) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory acceptable to Lender Lender, and (B2) all certificates, agreements, agreements and covenants and legal opinions reasonably required by Lender;
(xxvi) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.;
(xixvii) Borrower shall deliverhave paid an assumption fee equal to one-half of one percent (0.5%) of the then outstanding principal balance of the Loan in connection with the first such Transfer, at its sole cost and expensean assumption fee equal to one percent (1.0%) of the then outstanding principal balance of the Loan in connection with each subsequent Transfer, an endorsement to the Title Insurance Policy90526285v7 provided, as modified by the however, no such assumption agreement, as a valid first lien on the Property and naming fee shall be payable if the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrancesis wholly owned by an Identified Affiliate; and;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (Dxviii) Borrower shall pay (or cause to be responsible for the paid) any and all reasonable out-of-pocket costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses actually incurred by Lender in connection with such Transfer (including, without limitation, Lender’s reasonable counsel fees and disbursements) and all recording fees, title insurance premiums and mortgage and intangible taxes and the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower fees and management expenses of the Property are Rating Agencies (if any) pursuant to clause (b) above. Lender shall approve or disapprove any proposed Transfer governed by this Section 5.2.10 within thirty (30) days of Lender’s receipt of a written notice from Borrower requesting Lender’s approval, provided such notice includes all information necessary to make such decision, and further provided that such written notice from Borrower shall conspicuously state, in large bold type, that “PURSUANT TO SECTION 5.2.10 OF THE LOAN AGREEMENT, A RESPONSE IS REQUIRED WITHIN THIRTY (30) DAYS’ OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”. If Lender fails to disapprove any proposed Transfer within such period, Borrower shall provide a second written notice requesting approval, which written notice shall conspicuously state, in large bold type, that “PURSUANT TO SECTION 5.2.10 OF THE LOAN AGREEMENT, THE MATTER DESCRIBED HEREIN SHALL BE DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY WITHIN FIFTEEN (15) BUSINESS DAYS’ OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”. Thereafter, if Lender does not disapprove the same persons who have such Control and management rights immediately prior proposed Transfer within said fifteen (15) Business Day period, Lender's consent to the Additional Permitted Transferproposed Transfer shall be deemed to have been given; (G) Borrower provided, however, and notwithstanding the foregoing, no such consent to the proposed Transfer shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; be deemed given unless and (H) until Borrower shall have delivered satisfactory confirmation in writing from the Rating Agencies that such proposed Transfer will not cause a downgrading, withdrawal, reduction or qualification of the ratings in effect immediately prior to such Transfer for the Securities, or any class thereof, issued in connection with a Securitization which are then outstanding, or Lender has determined that Rating Agency confirmation is not required.
(e) Borrower, without the consent of Lender, may grant easements, restrictions, covenants, reservations and right of way in the ordinary course of business for access, parking, water and sewer lines, telephone and telegraph lines, electric lines and other utilities or for other similar purposes, provided that no such transfer, conveyance or encumbrance shall materially impair the utility and operation of the Property or materially adversely affect the value of such Property or the Net Operating Income of such Property. In connection with any transfer, conveyance or encumbrance permitted in the immediately preceding sentence, the Lender shall execute and deliver any instrument reasonably necessary or appropriate to evidence its consent to said action or to subordinate the Lien of the Mortgage to such easements, restrictions, covenants, reservations and rights of way or other similar grants upon receipt by the Lender thatof: (A) a copy of the instrument of transfer; and (B) an Officer’s Certificate stating with respect to any transfer described above, following that such transfer does not materially impair the Additional Permitted Transferutility and operation of the Property or materially reduce the value of such Property or the Net Operating Income of such Property. If Borrower shall receive any consideration in connection with any of said described transfers or conveyances, Borrower shall continue have the right to comply use any such proceeds in connection with any alterations performed in connection therewith, or required thereby, provided, however, after the provisions occurrence of Section 4.1.31 hereofa Lockbox Trigger Event, to the extent any such proceeds are not used in 90526285v7 connection with alterations (or any such proceeds exceeds the amount required to perform the related alterations), Borrower shall immediately deposit such amount or the remainder thereof, as the case may be, into the Lockbox Account. The acquisition by IDRETI of any entity whether by merger, stock purchase, asset purchase or any other manner shall not be considered a “Transfer” for purposes hereof so long as: (a) IDRETI is the surviving entity following such a transaction; (b) the net worth of IDRETI shall equal or exceed the net worth of IDRETI immediately prior to such a transaction, and (c) IDRETI shall retain management and control.
(f) Except as set forth herein, no sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer all or any part of the Property, shall be permitted during the term of the Loan without Lender’s prior written approval. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Property without Lender’s consentconsent if such consent is required herein. This provision shall apply to every Transfer sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Property regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfersale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Property.
(g) Lender’s consent to any sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Property shall not be deemed to be a waiver of Lender’s right to require such consent in the future. Any sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Property made in contravention of this Section shall be null and void and of no force or effect.
(h) Borrower agrees to bear and shall pay or reimburse Lender on demand for all reasonable expenses (including, without limitation, Lender’s actual out-of-pocket attorneys’ fees and disbursements, title search costs, rating agency fees and title insurance endorsement premiums) incurred by Lender in connection with the review, approval or disapproval, and documentation of any such sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer.
Appears in 1 contract
Sources: Loan Agreement (Inland Diversified Real Estate Trust, Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the creditworthiness and experience of Borrower and its stockholdersgeneral partner, general managing member, limited partners, membersmembers and beneficial owners, Key Principals and (if Borrower is a trust) beneficial owners as applicable, in owning and operating properties such as the Property in agreeing to make the Loanloan secured by the Mortgage, and that Lender will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other ObligationsDebt. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the shall not without Lender’s prior written consent of Lender, and except to the extent as otherwise set forth expressly provided in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): : (i) sell, assign, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, transfer or otherwise dispose of its legal or beneficial interests in the Property or any part thereof other than pursuant to Leases permitted under, and entered into in accordance with, Section 5.1.20 hereof, (ii) permit any owner, directly or indirectly, of an ownership interest the Property, to transfer or dispose of such interest, whether by transfer of stock or other interest in a Restricted Party, or otherwise, (iii) incur Indebtedness (other than the Indebtedness permitted pursuant to the terms of this Agreement), (iv) mortgage, hypothecate or otherwise encumber or grant a security interest in the Property or any part thereof, (v) sell, assign, convey, transfer, mortgage, encumber, grant a security interest in, or otherwise transfer or dispose of (directly any direct or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an indirect ownership interest in any Restricted Party, other than (A) pursuant or permit any Restricted Party that owns an interest in another Restricted Party to Leases of space in do the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transferssame, or (iiivi) enter into any plan file a declaration of division, or divide, establish a protected series, create a new registered series, or convert condominium with respect to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for the Property (any of the foregoing without Lender's prior written consenttransactions, a “Transfer”). Notwithstanding the foregoing, for purposes hereof, a “Transfer” shall not include Permitted Transfers.
(cb) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or Notwithstanding Section 5.2.10(a), at any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for time other than actual occupancy by the period commencing thirty (30) days prior to a space Tenant thereunder or Securitization and ending thirty (30) days after a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10Securitization, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten up to forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a such Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. In addition, at all times, Guarantor must continue to (i) Control the applicable Restricted Party, and (ii) own, directly or indirectly, not less than fifty-one percent (51%) of the legal and beneficial interest in the applicable Restricted Party.
(c) Notwithstanding Section 5.2.10(a), at any time other than the period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization, Lender shall not withhold its consent to a Transfer of the entire Property or all of the outstanding ownership interests in Borrower in a single transaction to one newly-formed Special Purpose Entity which shall be a wholly-owned subsidiary of IDIV (“Permitted Affiliate Transferee”) which shall be approved by Lender in its reasonable discretion (“Permitted Affiliate Transfer”), provided (1) no Event of Default shall have occurred and be continuing, (2) the creditworthiness of IDIV, as applicable, has not deteriorated, in the sole discretion of Lender, from the Closing Date to the date of the proposed Transfer, and (3) Borrower shall pay any and have paid all reasonable out-of-pocket costs and customary third party expenses (including reasonable attorneys’ fees and disbursements) actually incurred by Lender in connection with such Transfers Transfer (including Lender’s counsel fees but not any assumption or processing fee).
(d) Notwithstanding Section 5.2.10(a), at any time after other than during the period that is thirty (30) days prior to and disbursements and any fees and expenses thirty (30) days after a Securitization, Lender shall not withhold its consent to a Transfer of the Rating Agencies)Property and assumption of the Loan, provided that Lender receives thirty (30) days’ prior written notice of such Transfer and further provided that the following additional requirements are satisfied:
(I) THE PROPOSED TRANSFEREE OF THE PROPERTY SHALL BE A SPECIAL PURPOSE ENTITY (THE “TRANSFEREE”) WHICH AT THE TIME OF SUCH TRANSFER WILL BE IN COMPLIANCE WITH, AND MUST BE ABLE TO SATISFY ALL OF, THE REPRESENTATIONS, WARRANTIES AND COVENANTS CONTAINED IN SECTION 4.1.30, SECTION 4.1.35, SECTION 5.1.23 AND SECTION 5.2.9 AND WHICH SHALL HAVE ASSUMED IN WRITING (SUBJECT TO THE TERMS OF SECTION 9.3 HEREOF) AND AGREED TO COMPLY WITH ALL THE TERMS, COVENANTS AND CONDITIONS SET FORTH IN THIS LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS, EXPRESSLY INCLUDING, WITHOUT LIMITATION THE REPRESENTATIONS, WARRANTIES AND COVENANTS CONTAINED IN SECTION 4.1.30, SECTION 4.1.35, SECTION 5.1.1 AND SECTION 5.1.23 HEREOF;
(II) BORROWER SHALL DELIVER CONFIRMATION IN WRITING FROM THE RATING AGENCIES THAT SUCH PROPOSED TRANSFER WILL NOT CAUSE A DOWNGRADING, WITHDRAWAL, REDUCTION OR QUALIFICATION OF THE RATINGS IN EFFECT IMMEDIATELY PRIOR TO SUCH TRANSFER FOR THE SECURITIES, OR ANY CLASS THEREOF, ISSUED IN CONNECTION WITH A SECURITIZATION WHICH ARE THEN OUTSTANDING;
(III) TRANSFEREE AND TRANSFEREE’S PRINCIPALS SHALL, AS OF THE DATE OF SUCH TRANSFER, HAVE AN AGGREGATE NET WORTH AND LIQUIDITY NOT WORSE THAN THE NET WORTH AND LIQUIDITY OF BORROWER AND ITS PRINCIPALS AS OF THE DATE HEREOF OR AN AGGREGATE NET WORTH AND LIQUIDITY OTHERWISE REASONABLY ACCEPTABLE TO LENDER;
(IV) TRANSFEREE OR TRANSFEREE’S PRINCIPALS MUST HAVE DEMONSTRATED EXPERTISE IN OWNING AND OPERATING PROPERTIES SIMILAR IN LOCATION, SIZE, CLASS AND OPERATION TO THE PROPERTY, WHICH EXPERTISE SHALL BE REASONABLY DETERMINED BY LENDER;
(V) TRANSFEREE, TRANSFEREE’S PRINCIPALS AND ALL OTHER ENTITIES WHICH MAY BE OWNED OR CONTROLLED DIRECTLY OR INDIRECTLY BY TRANSFEREE’S PRINCIPALS (“RELATED ENTITIES”) MUST NOT HAVE BEEN PARTY TO ANY BANKRUPTCY PROCEEDINGS, VOLUNTARY OR INVOLUNTARY, MADE AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS OR TAKEN ADVANTAGE OF ANY INSOLVENCY ACT, OR ANY ACT FOR THE BENEFIT OF DEBTORS WITHIN SEVEN (7) YEARS PRIOR TO THE DATE OF THE PROPOSED TRANSFER;
(VI) TRANSFEREE SHALL ASSUME ALL OF THE OBLIGATIONS OF BORROWER UNDER THE LOAN DOCUMENTS IN A MANNER SATISFACTORY TO LENDER IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, BY ENTERING INTO AN ASSUMPTION AGREEMENT IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO LENDER;
(VII) THERE SHALL BE NO MATERIAL LITIGATION OR REGULATORY ACTION PENDING OR THREATENED AGAINST TRANSFEREE, TRANSFEREE’S PRINCIPALS OR RELATED ENTITIES WHICH IS NOT REASONABLY ACCEPTABLE TO LENDER;
(VIII) THE PROPERTY SHALL BE MANAGED BY A QUALIFIED MANAGER PURSUANT TO A REPLACEMENT MANAGEMENT AGREEMENT;
(IX) TRANSFEREE, TRANSFEREE’S PRINCIPALS AND RELATED ENTITIES SHALL NOT HAVE DEFAULTED UNDER ITS OR THEIR OBLIGATIONS WITH RESPECT TO ANY OTHER INDEBTEDNESS IN A MANNER WHICH IS NOT REASONABLY ACCEPTABLE TO LENDER;
(X) NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AND NO DEFAULT OR EVENT OF DEFAULT SHALL OTHERWISE OCCUR AS A RESULT OF SUCH TRANSFER;
(XI) BORROWER SHALL DELIVER, AT ITS SOLE COST AND EXPENSE, AN ENDORSEMENT TO EACH EXISTING TITLE INSURANCE POLICY INSURING THE RELATED MORTGAGE, AS MODIFIED BY THE ASSUMPTION AGREEMENT, AS A VALID FIRST LIEN ON THE PROPERTY AND NAMING TRANSFEREE AS OWNER OF THE FEE ESTATE (OR LEASEHOLD ESTATE, AS APPLICABLE) OF THE PROPERTY, WHICH ENDORSEMENT SHALL INSURE THAT, AS OF THE DATE OF THE RECORDING OF THE ASSUMPTION AGREEMENT, SUCH PROPERTY SHALL NOT BE SUBJECT TO ANY ADDITIONAL EXCEPTIONS OR LIENS OTHER THAN THOSE CONTAINED IN SUCH TITLE INSURANCE POLICY ISSUED ON THE DATE HEREOF AND THE PERMITTED ENCUMBRANCES RELATING THERETO;
(XII) BORROWER OR TRANSFEREE, AT ITS SOLE COST AND EXPENSE, SHALL DELIVER TO LENDER AN ADDITIONAL INSOLVENCY OPINION (IF AN INSOLVENCY OPINION WAS ISSUED IN CONNECTION WITH THE CLOSING) REFLECTING SUCH TRANSFER SATISFACTORY IN FORM AND SUBSTANCE TO LENDER, WHICH ADDITIONAL INSOLVENCY OPINION MAY BE RELIED UPON BY LENDER, THE RATING AGENCIES AND THEIR RESPECTIVE COUNSEL, AGENTS AND REPRESENTATIVES WITH RESPECT TO THE PROPOSED TRANSACTION, INCLUDING, WITHOUT LIMITATION, TRANSFEREE;
(XIII) INTENTIONALLY OMITTED;
(XIV) TRANSFEREE, AT ITS SOLE COST AND EXPENSE, SHALL DELIVER OPINIONS REGARDING EXISTENCE, AUTHORITY AND ENFORCEABILITY, WHICH OPINIONS MAY BE RELIED UPON BY LENDER, THE RATING AGENCIES AND THEIR RESPECTIVE COUNSEL, AGENTS AND REPRESENTATIVES WITH RESPECT TO THE PROPOSED TRANSACTION;
(XV) TRANSFEREE AND TRANSFEREE’S PRINCIPALS SHALL DELIVER (1) ALL ORGANIZATIONAL DOCUMENTATION REASONABLY REQUESTED BY LENDER, WHICH SHALL BE REASONABLY ACCEPTABLE TO LENDER, AND (2) ALL CERTIFICATES, AGREEMENTS AND COVENANTS REASONABLY REQUIRED BY LENDER;
(XVI) PRIOR TO ANY RELEASE OF GUARANTOR, ONE (1) OR MORE SUBSTITUTE GUARANTORS REASONABLY ACCEPTABLE TO LENDER SHALL HAVE ASSUMED ALL OF THE LIABILITIES AND OBLIGATIONS OF GUARANTOR UNDER THE GUARANTY EXECUTED BY GUARANTOR OR EXECUTE A REPLACEMENT GUARANTY REASONABLY SATISFACTORY TO LENDER;
(XVII) BORROWER SHALL HAVE PAID AN ASSUMPTION FEE EQUAL TO ONE-HALF OF ONE PERCENT (0.5%) OF THE THEN OUTSTANDING PRINCIPAL BALANCE OF THE LOAN IN CONNECTION WITH THE FIRST SUCH TRANSFER, AND AN ASSUMPTION FEE EQUAL TO ONE PERCENT (1.0%) OF THE THEN OUTSTANDING PRINCIPAL BALANCE OF THE LOAN IN CONNECTION WITH EACH SUBSEQUENT TRANSFER, PROVIDED, HOWEVER, NO SUCH ASSUMPTION FEE SHALL BE PAYABLE IF THE TRANSFEREE IS WHOLLY OWNED BY AN IDENTIFIED AFFILIATE; AND
(XVIII) BORROWER SHALL PAY (OR CAUSE TO BE PAID) ANY AND ALL REASONABLE OUT-OF-POCKET COSTS ACTUALLY INCURRED BY LENDER IN CONNECTION WITH SUCH TRANSFER (INCLUDING, WITHOUT LIMITATION, LENDER’S REASONABLE COUNSEL FEES AND DISBURSEMENTS) AND ALL RECORDING FEES, TITLE INSURANCE PREMIUMS AND MORTGAGE AND INTANGIBLE TAXES AND THE FEES AND EXPENSES OF THE RATING AGENCIES (IF ANY) PURSUANT TO CLAUSE (II) ABOVE.
(e) Without limiting Lender’s discretion Notwithstanding Section 5.2.10(a), at any time after other than during the period that is thirty (30) days prior to approve or disapprove any request for and thirty (30) days after a waiver of the prohibition against TransfersSecuritization, Lender specifically reserves the right to condition shall not withhold its consent to any waiver a Transfer of a prohibited Transfer upon satisfaction all of the outstanding ownership interests in Borrower in a single transaction to an Identified Affiliate, provided that Lender receives thirty (30) days’ prior written notice of such Transfer and further provided that the following minimum conditionsadditional requirements are satisfied:
(I) BORROWER SHALL DELIVER CONFIRMATION IN WRITING FROM THE RATING AGENCIES THAT SUCH PROPOSED TRANSFER WILL NOT CAUSE A DOWNGRADING, WITHDRAWAL, REDUCTION OR QUALIFICATION OF THE RATINGS IN EFFECT IMMEDIATELY PRIOR TO SUCH TRANSFER FOR THE SECURITIES, OR ANY CLASS THEREOF, ISSUED IN CONNECTION WITH A SECURITIZATION WHICH ARE THEN OUTSTANDING;
(II) THE IDENTIFIED AFFILIATE SHALL, AS OF THE DATE OF SUCH TRANSFER, HAVE AN AGGREGATE NET WORTH AND LIQUIDITY NOT WORSE THAN THE NET WORTH AND LIQUIDITY OF IDIV AS OF THE DATE HEREOF OR AN AGGREGATE NET WORTH AND LIQUIDITY OTHERWISE REASONABLY ACCEPTABLE TO LENDER;
(III) THE IDENTIFIED AFFILIATE AND ALL OTHER ENTITIES WHICH MAY BE OWNED OR CONTROLLED DIRECTLY OR INDIRECTLY BY THE IDENTIFIED AFFILIATE (“IDENTIFIED AFFILIATE RELATED ENTITIES”) MUST NOT HAVE BEEN PARTY TO ANY BANKRUPTCY PROCEEDINGS, VOLUNTARY OR INVOLUNTARY, MADE AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS OR TAKEN ADVANTAGE OF ANY INSOLVENCY ACT, OR ANY ACT FOR THE BENEFIT OF DEBTORS WITHIN SEVEN (7) YEARS PRIOR TO THE DATE OF THE PROPOSED TRANSFER;
(IV) THERE SHALL BE NO MATERIAL LITIGATION OR REGULATORY ACTION PENDING OR THREATENED AGAINST THE IDENTIFIED AFFILIATE OR IDENTIFIED AFFILIATE RELATED ENTITIES WHICH IS NOT REASONABLY ACCEPTABLE TO LENDER;
(V) THE PROPERTY SHALL CONTINUE TO BE MANAGED BY MANAGER OR BE MANAGED BY A QUALIFIED MANAGER PURSUANT TO A REPLACEMENT MANAGEMENT AGREEMENT;
(VI) NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AND NO DEFAULT OR EVENT OF DEFAULT SHALL OTHERWISE OCCUR AS A RESULT OF SUCH TRANSFER;
(VII) BORROWER OR THE IDENTIFIED AFFILIATE, AT ITS SOLE COST AND EXPENSE, SHALL DELIVER TO LENDER AN ADDITIONAL INSOLVENCY OPINION (IF AN INSOLVENCY OPINION WAS ISSUED IN CONNECTION WITH THE CLOSING) REFLECTING SUCH TRANSFER SATISFACTORY IN FORM AND SUBSTANCE TO LENDER, WHICH ADDITIONAL INSOLVENCY OPINION MAY BE RELIED UPON BY LENDER, THE RATING AGENCIES AND THEIR RESPECTIVE COUNSEL, AGENTS AND REPRESENTATIVES WITH RESPECT TO THE PROPOSED TRANSACTION, INCLUDING, WITHOUT LIMITATION, THE IDENTIFIED AFFILIATE;
(VIII) THE IDENTIFIED AFFILIATE, AT ITS SOLE COST AND EXPENSE, SHALL DELIVER OPINIONS REGARDING EXISTENCE, AUTHORITY AND ENFORCEABILITY, WHICH OPINIONS MAY BE RELIED UPON BY LENDER, THE RATING AGENCIES AND THEIR RESPECTIVE COUNSEL, AGENTS AND REPRESENTATIVES WITH RESPECT TO THE PROPOSED TRANSACTION;
(IX) THE IDENTIFIED AFFILIATE SHALL DELIVER (A) ALL ORGANIZATIONAL DOCUMENTATION REASONABLY REQUESTED BY LENDER, WHICH SHALL BE REASONABLY ACCEPTABLE TO LENDER, AND (B) ALL CERTIFICATES, AGREEMENTS AND COVENANTS REASONABLY REQUIRED BY LENDER;
(X) PRIOR TO ANY RELEASE OF GUARANTOR, THE IDENTIFIED AFFILIATE SHALL HAVE ASSUMED ALL OF THE LIABILITIES AND OBLIGATIONS OF GUARANTOR UNDER THE GUARANTY EXECUTED BY GUARANTOR OR EXECUTE A REPLACEMENT GUARANTY REASONABLY SATISFACTORY TO LENDER; AND
(XI) BORROWER SHALL PAY ALL OF LENDER’S REASONABLE AND CUSTOMARY THIRD-PARTY EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS) ACTUALLY INCURRED BY LENDER IN CONNECTION WITH SUCH TRANSFER AND A PROCESSING FEE EQUAL TO $5,000 AND ALL EXPENSES OF THE RATING AGENCIES (IF ANY) PURSUANT TO CLAUSE (I) ABOVE.
(f) Notwithstanding Section 5.2.10(a), Lender’s consent shall not be required with respect to the merger of IDIV with any other Identified Affiliate; provided that (i) Borrower Lender shall pay receive not less than thirty (30) days prior written notice of any such proposed merger, (ii) no Event of Default shall have occurred and be continuing, (iii) the net worth of the entity surviving such merger shall equal or exceed the net worth of IDIV immediately prior to such merger, and (iv) immediately following such merger, the entity surviving the merger shall be publicly registered with the Securities and Exchange Commission.
(g) Notwithstanding Section 5.2.10(a), at any time other than the period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization, Lender’s consent shall not be required in connection with the acquisition by IDIV of any entity whether by merger, stock purchase, asset purchase or any other manner; provided that: (i) Lender shall receive not less than thirty (30) days prior written notice of any such proposed transaction, (ii) no Event of Default shall have occurred and be continuing, (iii) IDIV is the surviving entity following such a transfer transaction, and (iv) the net worth of IDIV after the transaction shall equal or exceed the net worth of IDIV immediately prior to such a transaction.
(h) Notwithstanding Section 5.2.10(a), at any time other than the period that is thirty (30) days prior to and thirty (30) days after a Securitization, Lender shall not withhold its consent to, and shall not charge an assumption fee equal to in connection, with a Transfer by IDIV of one hundred percent (1100%) of the outstanding principal balance membership interests in Borrower to a joint venture in which IDIV owns at least twenty-five percent (25%) of the Loan stock, partnership interests or membership interests (“JV Transferee”), provided that (i) Lender receives at least thirty (30) days’ prior written notice of such Transfer, (ii) no Event of Default shall have occurred and be continuing at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such written notice or the Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee IDIV maintains operational and managerial control of the JV Transferee, (iv) IDIV continues to be Guarantor, (v) IDIV’s partner in the JV Transferee (the “TransfereeJV Partner”) or Transfereethe JV Partner’s Principals must parent entity shall have demonstrated expertise at least $350,000,000.00 in owning and operating properties similar in locationassets, size, class and operation to (vi) the Property, which expertise JV Partner or the JV Partner’s parent entity shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate a net worth and liquidity acceptable to Lender;
of at least $175,000,000.00; (vvii) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not neither the JV Partner nor any of its Affiliates shall have been a party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.ins
Appears in 1 contract
Sources: Loan Agreement (Inland Diversified Real Estate Trust, Inc.)
Transfers. (a) Borrower acknowledges that each Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties collateral such as the Property Collateral in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that each Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, each Lender can recover the Debt by a sale of the Property.
(ba) Without the prior written consent of LenderAdministrative Agent, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Property, the Mezzanine A Collateral, the Collateral or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) enter into any PACE Loan, (iii) permit a Sale or Pledge of an interest in any Restricted Party, (iv) permit a Sale or Pledge of the CPLV Lease or any interest therein or (v) permit a Sale or Pledge of any interest in CPLV Tenant or CPLV Tenant’s leasehold interest in the Property other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and 5.1.20, (B) Permitted TransfersTransfers (including Permitted Encumbrances), (C) pursuant to customary short-term occupancy agreements with the CPLV Tenant or short-term hotel guests, or (iiiD) enter into any plan a Transfer of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any portion of the foregoing without Lender's prior written consentProperty to a Governmental Authority in connection with a Condemnation of such portion of the Property in accordance with Section 6.3 hereof.
(cb) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Collateral or any part thereof, Mezzanine A Borrower Mezzanine A Borrower agrees to sell the Mezzanine A Collateral or any part thereof, or Mortgage Borrower agrees to sell the Property or any part thereof thereof, in each case, for a price to be paid in installments; (ii) an agreement by Mortgage Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s right, title and interest in and to any Leases the CPLV Lease or any CPLV Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member non‑member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing non‑managing membership interests or the creation or issuance of new non managing non‑managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) Manager other than in accordance with Section 5.1.22 hereof.
(dc) Notwithstanding the provisions of this Section 5.2.105.2.10(a), LenderAdministrative Agent’s consent shall not be required in connection with (i) one or a series of Transfers, Transfers (except for a Pledge) of (x) not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted PartyParty or (y) the indirect equity interests in Borrower by any Person that owns less than forty-nine percent (49%) of the economic and legal beneficial interests in, and does not Control, any of Mortgage Borrower, Mortgage Principal, Principal, any Mezzanine Borrower or Guarantor, (ii) any transfer of any direct or indirect legal or beneficial interests in the REIT, so long as it is a Public Vehicle, (iii) the cancellation, surrender, disposition, issuance, sale, grant, or Transfer of the operating partnership units of Guarantor, so long as the REIT continues to Control Guarantor and own directly or indirectly not less than 51% of the legal and beneficial interest in Guarantor, (iv) the pledge of or grant of a security interest in the direct or indirect equity interests in Mortgage Borrower as security for the Loan or the other Mezzanine Loans, (v) the exercise by any Mezzanine Collateral Agent (on behalf of the applicable Mezzanine Lender) of any rights or remedies such Mezzanine Collateral Agent may have under the applicable Mezzanine Loan Documents with respect to the pledge and/or security interest referred to in the foregoing clause (iv), and (vi) the Mezzanine C Equity Conversion; provided, however, no that with respect to each such Transfer (other than under clause (v) or clause (vi) above), (A) after giving effect to such Transfer, (x) REIT shall result continue to Control Mortgage Borrower, Borrower and Guarantor, (y) REIT shall continue to own, directly or indirectly, at least fifty-one percent (51%) in the Change aggregate of Control the legal and beneficial interest in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Mortgage Borrower, Mezzanine A Borrower and Borrower and (z) Guarantor shall continue to own, directly or indirectly, at least fifty-one percent (51%) in the aggregate of the legal and beneficial interest in Mortgage Borrower, Mezzanine A Borrower and Borrower; (B) as a condition to each such Transfer, Lender Administrative Agent shall receive not less than thirty (30) days prior written notice of such proposed Transfer (except with respect to any Transfer pursuant to clause (i) or clause (iii) to the extent that any such Transfer will not result in the transferee (either itself or collectively with its Affiliates) after giving effect to such Transfer owning a 10% or greater equity interest (directly or indirectly) in Borrower (that did not own a 10% or greater interest therein as of the Closing Date), clause (ii) if the REIT is a Public Vehicle, clause (iv) or clause (v) above); (C) the representations set forth in Section 4.1.9 hereof shall continue to be true and correct after giving effect to any such Transfer and except with respect to any Transfer of a direct or indirect interest in a Public Vehicle or pursuant to clause (v), transferee and its principals are not an Embargoed Person and the representations set forth in Section 4.1.35 hereof shall continue to be true and correct after giving effect to any such Transfer. ; (D) such Transfer shall be at Borrower’s sole cost and expense; (E) if after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct interests in Borrower is owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct interest in Borrower as of the Closing Date, Borrower shall, no less than ten (10) days prior to the effective date of any such Transfer, deliver to Administrative Agent an Additional Insolvency Opinion reasonably acceptable to Administrative Agent; (F) to the extent that any Transfer (other than any Transfer of shares in a Restricted Party that is a Public Vehicle and except with respect to any Transfer pursuant to clauses (iv) or (v)) will result in the transferee (either itself or collectively with its Affiliates) after giving effect to such Transfer owning a 10% or greater equity interest (directly or indirectly) in Borrower (that did not own a 10% or greater interest therein as of the Closing Date), Administrative Agent shall (x) have the right to perform any searches and/or reasonably request other diligence from Borrower to permit Administrative Agent and each Lender to comply with its then current “know your customer” requirements, including, but not limited to Patriot Act and OFAC searches and (y) receive Satisfactory Search Results, at Borrower’s cost and expense, as a condition precedent to such Transfer; (G) for so long as the Loan shall remain outstanding, no such Transfer or encumbrance of any direct interests in Mezzanine A Borrower shall pay any be permitted (other than the pledges and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements security interests securing the Loan and any fees Transfer pursuant to clause (v)); (H) for so long as the Mezzanine A Loan shall remain outstanding, no such Transfer or encumbrance of any direct interests in Mortgage Borrower shall be permitted (other than the pledges and expenses security interests securing the Mezzanine A Loan and any Transfer pursuant to clause (v)); (I) for so long as the Mezzanine C Loan shall remain outstanding, no such Transfer or encumbrance of any direct interests in Mezzanine B Borrower shall be permitted (other than the Rating Agenciespledges and security interests securing the Mezzanine C Loan and any Transfer pursuant to clause (v)); (J) for so long as the Loan, the Mortgage Loan or any other Mezzanine Loan shall remain outstanding, neither Mortgage Borrower nor Mezzanine Borrower shall issue preferred equity interests (except as otherwise permitted pursuant to the Mortgage Loan Documents, Loan Documents, Mezzanine A Loan Documents, or Mezzanine C Loan Documents, as applicable); (K) all Transfers must be made in accordance with all Gaming Regulations, including receipt of any required Gaming Licenses; and (L) in no event may Borrower effect a Transfer, or permit or suffer any Transfer, that would result in a Gaming License Default.
(ed) Without limiting Lenderthe prior written consent of Administrative Agent, Borrower shall not and shall not cause or permit Mortgage Borrower to permit any Transfer (including any Sale or Pledge) of any interest in CPLV Tenant or any interest of CPLV Tenant in the CPLV Lease, except that Administrative Agent’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfersconsent shall not be required, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditionsin connection with:
(i) Borrower one or a series of Transfers of the direct or indirect legal or beneficial interests in CEC, including any acquisition, merger, amalgamation or consolidation of CEC, shall pay Lender a transfer fee equal to one percent be permitted, so long as (1%) either (x) CEC, an entity that acquires a controlling interest in CEC or, in the case of a merger, consolidation or amalgamation of CEC where CEC is not the surviving entity, the surviving entity (the entity that acquires a controlling interest in CEC or that survives a merger, amalgamation or consolidation with CEC (if CEC is not the survivor), a “Replacement CEC Sponsor”) remains a Public Vehicle or (y) immediately after giving effect to such Transfer, CEC or the Replacement CEC Sponsor satisfies the requirements of a Qualified CPLV Replacement Guarantor and (2) in the case where after such Transfer, CEC is not a Public Vehicle, the surviving Public Vehicle or entity that qualifies as a Qualified CPLV Replacement Guarantor pursuant to clause (1)(x) or (1)(y) above, as applicable, delivers a reaffirmation of the outstanding principal balance of CPLV Lease Guaranty, in form and substance reasonably acceptable to Administrative Agent contemporaneous with such Transfer or, if requested by Administrative Agent, a replacement guaranty substantially similar to the Loan at the time of CPLV Lease Guaranty or in such transferother form and substance as reasonably acceptable to Administrative Agent;
(ii) Borrower shall pay one or more encumbrances of CPLV Tenant’s leasehold interest in the Property pursuant to one or more mortgages and/or pledges of the direct or indirect equity interests in CPLV Tenant, to secure indebtedness of CPLV Tenant and/or its direct or indirect parent entities or Affiliates (each, a “CPLV Tenant Loan”), and the lender of any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including CPLV Tenant Loan (a “CPLV Tenant Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes”);
(iii) The proposed transferee one or a series of Transfers (except for a Pledge), (a) of not more than forty-nine percent (49%) of the “Transferee”direct or indirect stock, partnership interests or membership interests (as the case may be) in CPLV Tenant, or Transferee’s Principals must have demonstrated expertise the occurrence of a Permitted CPLV Tenant Interposition, or (b) of the direct or indirect stock, partnership interests or membership interests (as the case may be) in owning CPLV Tenant so long as after giving effect thereto CEC (or following any Transfer under Section 5.2.10(e)(i) above, the Replacement CEC Sponsor) shall control and operating properties similar own not less than fifty-one percent (51%) of the economic and beneficial interests in location, size, class and operation to the Property, which expertise shall be reasonably determined by LenderCPLV Tenant);
(iv) Transferee and Transferee’s Principals shall, as a Transfer of 100% of the date direct or indirect legal and beneficial interests in CPLV Tenant and/or the leasehold interest of CPLV Tenant in the Property (subject to exclusion with respect to items that are not capable of being mortgaged and that, in the aggregate, are de minimis) pursuant to or at any time after a foreclosure (or conveyance in lieu thereof or pursuant to any other exercise of remedies) of the CPLV Tenant Loan by CPLV Tenant Lender, subject to satisfaction of the following conditions:
(A) either of the following conditions shall be satisfied (the “CPLV Tenant Transferee Requirement”):
(1) (x) the proposed transferee that assumes all of the obligations, liabilities and rights of CPLV Tenant under the CPLV Lease and CPLV Lease Documents (the “CPLV Tenant Transferee”) shall be a Qualified CPLV Tenant Transferee or a Qualified CPLV Tenant Transferee shall Control and own not less than 51% of the economic and beneficial interests in CPLV Tenant or such transferCPLV Tenant Transferee after such Transfer, have an aggregate net worth (y) a replacement lease guarantor that is a Qualified CPLV Replacement Guarantor shall execute a replacement guaranty substantially similar to the CPLV Lease Guaranty or in such other form and liquidity substance as acceptable to Administrative Agent and (z) the Property is managed by a Qualified Replacement Manager; or
(2) (x) a transferee that satisfies the requirements in (b) through (g) in the definition of “Qualified CPLV Tenant Transferee” shall be, or Control and own not less than 51% of the economic and beneficial interests in CPLV Tenant or CPLV Tenant Transferee after such Transfer, (y) the CPLV Lease is guaranteed by CEC (or following any Transfer under Section 5.2.10(e)(i) above, the Replacement CEC Sponsor) and (z) the Property is managed by the Manager under the Management Agreement (or a Qualified Replacement Manager under a Replacement Management Agreement in the event Mortgage Borrower terminated Manager in accordance with Section 16.5 of the Management Agreement and the terms hereunder (unless Administrative Agent has consented in its sole and absolute discretion to the permanent termination of the Management Agreement)); and
(B) such Transfer shall not diminish any of the rights of Mortgage Borrower or Mortgage Lender under, or other result in any change to the transition services for the benefit of Mortgage Borrower and Mortgage Lender, set forth in the Transition Services Agreement or under the Mortgage Loan Documents;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party prior to any bankruptcy proceedingsTransfer pursuant to clause (iv) above, voluntary or involuntarya Transfer of all right, made title and interest of CPLV Tenant in the CPLV Lease to an assignment for Affiliate of CPLV Tenant that is owned and Controlled by CEC (the benefit “Affiliate Tenant Transferee”), so long as a condition precedent to such Transfer, (A) there is no Uncured CPLV Lease Event of creditors or taken advantage of any insolvency actDefault, or any act for the benefit of debtors within seven (7B) years prior to the date of the proposed Transfer;
(vi) Affiliate Tenant Transferee shall assume all of the obligations of Borrower CPLV Tenant under the CPLV Lease SNDA, the CPLV Security Documents and all other Mortgage Loan Documents and/or Loan Documents to which CPLV Tenant is a party, in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.to
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has Le▇▇▇▇ ▇as examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on BorrowerBo▇▇▇▇▇▇’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has Le▇▇▇▇ ▇as a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can Le▇▇▇▇ ▇an recover the Debt by a sale of the Property.. 84 0123905.0782082 4863-1270-3898v11
(b) Without the prior written consent of LenderLe▇▇▇▇, not to be unreasonably withheld, delayed or conditioned, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof (except in connection with any Condemnation) or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 hereof and (B) Permitted Transfers. For the avoidance of doubt, in no event shall the Transfers described in clauses (a), (b), (c), (d), (g), (h) or (iiij) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without definition of “Permitted Transfers” set forth in Section 1.1 hereof require consent by Lender or, except as otherwise expressly required hereunder, notice to Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, BorrowerBo▇▇▇▇▇▇’s right, title and interest in and to any Leases or any RentsRents or any Property Documents; (iii) if a Restricted Party is a corporation, any merger, consolidation division into two (2) or more legal entities or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation consolidation, division into two (2) or more legal entities or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation consolidation, division into two (2) or more legal entities or the change, removal, resignation or addition of a managing member or non-member nonmember manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing nonmanaging membership interests or the creation or issuance of new non managing nonmanaging membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation consolidation, division into two (2) or more legal entities or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent Manager (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.; or (viii) Borrower entering into or affirmatively consenting to any ▇▇▇▇ ▇▇▇▇. 0123905.0782082 4863-1270-3898v11
(d) Notwithstanding the provisions of this Section 5.2.10, LenderLe▇▇▇▇’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership direct or indirect ownership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a Restricted Party Borrower or cause any Key Principal to no longer be a Key Principal of BorrowerGuarantor, and as a condition to each such Transfer that results in the transferee owning ten percent (10%) or more of the direct or indirect ownership interests in a Borrower (which such transferee did not own 10% or more of the direct or indirect ownership interests in a Borrower prior to such Transfer), Lender (i) Borrower shall receive provide to Lender, not less than thirty ten (3010) days prior written notice to such transfer, the name and identity of each proposed transferee, together with the names of its controlling principals, the social security number (if applicable) or employee identification number (if applicable) of such transferee and controlling principals (if applicable), and such transferee’s and, if applicable, controlling principal’s home address or principal place of business, and home or business telephone number (if applicable) and (ii) Lender shall have received Satisfactory Search Results with respect to the proposed Transfertransferee and such controlling principals, if applicable; provided, further, however, the foregoing clause (i) and (ii) shall not be applicable in connection with any transfer (or pledging) of stock or membership interests in any publicly-held corporation or other publicly-held entity (in each case) which is listed on the New York Stock Exchange, the NASDAQ Global Select Market or another nationally-recognized stock exchange, or transfer or issuance of securities of the REIT provided that such securities are listed on the New York Stock Exchange, the NASDAQ Global Select Market or another nationally recognized stock exchange. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies). In addition, at all times (other than in connection with a Mezzanine Control Event), Guarantor (or a Qualified Equity Holder) must continue to Control Borrower, and own, directly or indirectly, at least a 51% legal and beneficial interest in Borrower.
(e) Without limiting Lender’s discretion Notwithstanding anything to approve or disapprove any request for a waiver of the prohibition against Transferscontrary contained in this Section 5.2.10, Lender specifically reserves the right to condition shall not unreasonably withhold its consent to any waiver of a prohibited Transfer upon satisfaction sale, assignment, or other transfer of the Property (or such Property remaining after any releases of Individual Properties pursuant to Section 2.5.2 hereof) and the assumption of the Loan by the applicable Transferee provided that (i) Lender receives prior written notice of such transfer, (ii) no Event of Default has occurred and is continuing both at the time such notice is given and as of the closing date of such transaction, (iii) no such sale, assignment or other transfer of the Property shall occur on or prior to the Permitted Prepayment Date (or prior to the date that is ninety (90) days following minimum conditions:the Permitted Prepayment Date, if Lender delivers a written notice to Borrower on or prior to the Permitted Prepayment Date stating that a Securitization is imminently pending), and (iv) the following conditions precedent are satisfied (or waived in writing by ▇▇▇▇▇▇ or Servicer):
(i) Borrower shall pay Lender a transfer fee equal to one percent (11.0%) of the outstanding principal balance Outstanding Principal Balance of the Loan at for each such Transfer resulting in the time assumption of such transferthe Loan;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, Transfer (including Lender▇▇▇▇▇▇’s outside counsel reasonable fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals (directly or indirectly) must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the each Individual Property (or deliver evidence that they will engage a Qualified Manager to manage each Individual Property), which expertise shall be reasonably determined by Lender;▇▇▇▇▇▇; 86 0123905.0782082 4863-1270-3898v11
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender; with the understanding that if Transferee and Transferee’s Principals would otherwise satisfy the Qualified Replacement Guarantor or Qualified Equity Holder Thresholds, as the case may be, then this clause (iv) shall be deemed satisfied;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner reasonably satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance reasonably satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened in writing against Transferee, Transferee’s Principals or Related Entities which is not acceptable to LenderLender in its reasonable discretion and Lender shall have performed searches and/or received other diligence such that Lender is in compliance with ▇▇▇▇▇▇’s then current “know your customer” requirements and shall have received Satisfactory Search Results for any owner of Transferee which will own a 10% or greater equity interest (directly or indirectly) in Borrower after giving effect to such transfer;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to LenderLender in its reasonable discretion;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender▇▇▇▇▇▇, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender▇▇▇▇▇▇;
(x) If required by Lender (and if a Securitization has occurred), Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.; with the understanding that a substitute guarantor that qualifies as a Qualified Replacement Guarantor will be acceptable to Lender. 87 0123905.0782082 4863-1270-3898v11
(xixii) Borrower shall deliver, at its sole cost and expense, an endorsement (or equivalent) to the each Title Insurance PolicyPolicy insuring the Security Instruments, as modified by the assumption agreement, as a valid first lien liens on the each Individual Property and naming the Transferee as owner of the each Individual Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the that each Individual Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy Policies issued on the date hereof and the Permitted Encumbrances;; and
(xiixiii) If applicable, the Each Individual Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, direct or indirect limited partnership partnership, membership or membership other equity interests, as applicable, in Borrower a Restricted Party may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among direct or indirect limited partners or membersmembers or other equity owners, as applicable, of Borrower a Restricted Party who are direct or indirect limited partners or membersmembers or other equity owners, as applicable, of Borrower a Restricted Party as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer, if required by clause (J) below; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with will not result in a change of Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted TransferBorrower; (G) upon ▇▇▇▇▇▇’s request, Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Transfer shall not cause Borrower shall continue to comply with violate any of the provisions of Section 4.1.31 hereof. 4.1.30 hereof and, upon ▇▇▇▇▇▇’s request, Borrower shall deliver a written certification of such compliance to Lender; (I) intentionally omitted; and (J) in connection with any Additional Permitted Transfer that results in the transferee owning ten percent (10%) of the direct or indirect ownership interests in a Borrower (which such transferee did not own 10% or more of the direct or indirect ownership interests in a Borrower prior to such Transfer), (i) Borrower shall provide to Lender, not less than thirty (30) days prior to such transfer, the name and identity of each proposed transferee, together with the names of its controlling principals, the social security number or employee identification number of such transferee and controlling principals, and such transferee’s and controlling principal’s home address or principal place of business, and home or business telephone number and (ii) Lender shall not be required have received Satisfactory Search Results with respect to demonstrate the proposed transferee and such controlling principals. 88 0123905.0782082 4863-1270-3898v11
(g) A Transfer (a “Qualified Equityholder Transfer”) of direct or indirect ownership interests in Borrower to a Qualified Equityholder resulting in a change in Control of Borrower may occur at any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due time and payable upon Borrower’s Transfer from time-to-time without Lender’s consent. This provision shall apply to every Transfer regardless , so long as no Event of whether voluntary Default has occurred and is continuing and the following conditions are satisfied (or not, or whether or not Lender has consented to any previous Transfer.waive
Appears in 1 contract
Transfers. 132
(a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such Except as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth expressly permitted in this Section 5.2.105.16, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan no Transfer (including any pledge of its rights, duties and obligations under this Agreement and the other Loan Documents) direct or (ii) permit a Sale or Pledge of an interest indirect interests in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one a Permitted Encumbrance or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted PartyPermitted Equity Transfer shall be made without Agent’s prior consent; provided, however, no such that a Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty under clause (30a)(i) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for definition thereof of a waiver material portion of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction Collateral or under clause (b) of the following minimum conditions:
definition thereof, shall require the consent of all Lenders. Nothing herein shall restrict Borrowers or any owner of Borrowers from entering into a purchase and sale agreement for the Property (or direct or indirect equity interests in any entity owning the Property) so long as (i) Borrower shall pay Lender a transfer fee equal such purchase and sale agreement does not obligate Borrowers to one percent (1%) perform any work or other obligations other than delivery of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
Property (iv) Transferee and Transferee’s Principals shall, as of the date of or such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership ownership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) the purchase price set forth in such purchase and sale agreement will result in net sales proceeds in an amount sufficient to immediate family members repay the Loan in full.
(which b) If certain fixtures or other personal property located at or on the Mortgaged Property are required, in accordance with the applicable Plans and Specifications, to be removed or replaced in connection with the Phase Zero Renovation Project and/or PIP Project, upon the purchase and receipt of the applicable fixtures or personal property, Borrower may sell or otherwise dispose of the fixtures or other personal property being replaced, free from the Lien of the Security Documents; provided, however, any proceeds from the sale thereof shall be limited promptly deposited into the Clearing Account. In addition, Borrowers may, without the prior consent of Agent, in the Ordinary Course of Business in compliance with the operating standards set forth in Section 5.2, sell or otherwise dispose of, free from the Lien of the Security Documents, any fixtures or other personal property located at or on the Mortgaged Property (except all or any portion of the buildings or other permanent structures built upon the Land) to the extent such property is being replaced, has become old, inadequate, obsolete, worn out or unfit or unadapted for use in the operation of the Mortgaged Property, cannot be advantageously used in the efficient operation of the Mortgaged Property or the removal and/or replacement of which would result in a cost savings, provided, that, in the case of each such sale or other disposition of any such fixtures or personal property (other than in connection with the sale or other disposition of such property which is contained in, or is part of, the existing Improvements as of the date hereof so long as such property is not intended or required to be used for or in connection with the development of the Project), Borrowers shall (unless the failure to do so would not reduce the value of the Mortgaged Property by more than a de minimis extent) substitute such property with other property acquired by Borrowers free and clear of all liens, encumbrances and rights of others except Permitted Encumbrances, of a value and utility substantially equal to the property sold or otherwise disposed of when new and such substitute property is subject to a spousefirst, parent, child and grandchild perfected security interest in favor of Agent.
(each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (Ac) So long as no Default or Event of Default has occurred and is continuing; , Borrowers may, without the prior consent of Agent or any Lender, (i) make immaterial Transfers of portions of the Mortgaged Property to Governmental Authorities for dedication or public use, and (ii) grant easements, restrictions, covenants, reservations and rights-of-way in the Ordinary Course of Business for access, water and sewer lines, telephone or other fiber optic or other data transmission lines, electric lines or other utilities or for other similar purposes, provided that no such Transfer, conveyance or encumbrance set forth in the foregoing clauses (i) or (ii) shall (x) materially impair the utility and operation of the Mortgaged Property, (y) materially impair the ability to sell the Mortgaged Property or lease any portion of the Mortgaged Property (other than the portion to be transferred) or (z) reasonably be expected to, or does, have a Material Adverse Effect. In connection with any Transfer permitted pursuant to this subsection (c), Agent shall execute and deliver any instrument reasonably necessary or appropriate, in the case of the Transfers referred to in clause (i) above, to release the portion of the Mortgaged Property affected by such Taking or such Transfer from the Lien of the Mortgage or, in the case of clause (ii) above, to subordinate the Lien of the Mortgage to such easements, restrictions, covenants, reservations and rights-of-way or other similar grants upon receipt by Agent of: 49289660
(i) fifteen (15) days’ prior written notice thereof;
(ii) a copy of the instrument or instruments of Transfer;
(iii) a certificate in form and substance reasonably satisfactory to Agent stating (A) with respect to any Transfer, the consideration, if any, being paid for the Transfer, which consideration shall be applied to the Outstanding Principal Balance in accordance with Section 5.14 and (B) Lender has received Borrowerthat such Transfer does not have a Material Adverse Effect; and
(iv) reimbursement of all of Agent’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the reasonable out-of-pocket costs and expenses of documenting the Additional Permitted Transfer; (Eincluding reasonable attorneys’ fees and disbursements) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Sources: Loan Agreement (Creative Media & Community Trust Corp)
Transfers. (a) Borrower acknowledges that each Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties collateral such as the Property Collateral in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that each Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, each Lender can recover the Debt by a sale of the Property.
(ba) Without the prior written consent of LenderAdministrative Agent, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Property, the Collateral or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) enter into any PACE Loan, (iii) permit a Sale or Pledge of an interest in any Restricted Party, (iv) permit a Sale or Pledge of the CPLV Lease or any interest therein or (v) permit a Sale or Pledge of any interest in CPLV Tenant or CPLV Tenant’s leasehold interest in the Property other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and 5.1.20, (B) Permitted TransfersTransfers (including Permitted Encumbrances), (C) pursuant to customary short-term occupancy agreements with the CPLV Tenant or short-term hotel guests, or (iiiD) enter into any plan a Transfer of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any portion of the foregoing without Lender's prior written consentProperty to a Governmental Authority in connection with a Condemnation of such portion of the Property in accordance with Section 6.3 hereof.
(cb) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Collateral or any part thereof or Mortgage Borrower agrees to sell the Property or any part thereof thereof, in each case, for a price to be paid in installments; (ii) an agreement by Mortgage Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s right, title and interest in and to any Leases the CPLV Lease or any CPLV Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member non‑member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing non‑managing membership interests or the creation or issuance of new non managing non‑managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) Manager other than in accordance with Section 5.1.22 hereof.
(dc) Notwithstanding the provisions of this Section 5.2.105.2.10(a), LenderAdministrative Agent’s consent shall not be required in connection with (i) one or a series of Transfers, Transfers (except for a Pledge) of (x) not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted PartyParty or (y) the indirect equity interests in Mezzanine B Borrower by any Person that owns less than forty-nine percent (49%) of the economic and legal beneficial interests in, and does not Control, any of Mortgage Borrower, Mortgage Principal, Principal, any Mezzanine Borrower or Guarantor, (ii) any transfer of any direct or indirect legal or beneficial interests in the REIT, so long as it is a Public Vehicle, (iii) the cancellation, surrender, disposition, issuance, sale, grant, or Transfer of the operating partnership units of Guarantor, so long as the REIT continues to Control Guarantor and own directly or indirectly not less than 51% of the legal and beneficial interest in Guarantor, (iv) the pledge of or grant of a security interest in the direct or indirect equity interests in Mortgage Borrower as security for the Loan or the other Mezzanine Loans, (v) the exercise by any Mezzanine Collateral Agent (on behalf of the applicable Mezzanine Lender) of any rights or remedies such Mezzanine Collateral Agent may have under the applicable Mezzanine Loan Documents with respect to the pledge and/or security interest referred to in the foregoing clause (iv), and (vi) the Mezzanine C Equity Conversion; provided, however, no that with respect to each such Transfer (other than under clause (v) or clause (vi) above), (A) after giving effect to such Transfer, (x) REIT shall result continue to Control Mortgage Borrower, Borrower and Guarantor, (y) REIT shall continue to own, directly or indirectly, at least fifty-one percent (51%) in the Change aggregate of Control the legal and beneficial interest in a Restricted Party Mortgage Borrower and Borrower and (z) Guarantor shall continue to own, directly or cause any Key Principal to no longer be a Key Principal indirectly, at least fifty-one percent (51%) in the aggregate of the legal and beneficial interest in Mortgage Borrower and Borrower, and ; (B) as a condition to each such Transfer, Lender Administrative Agent shall receive not less than thirty (30) days prior written notice of such proposed Transfer (except with respect to any Transfer pursuant to clause (i) or clause (iii) to the extent that any such Transfer will not result in the transferee (either itself or collectively with its Affiliates) after giving effect to such Transfer owning a 10% or greater equity interest (directly or indirectly) in Borrower (that did not own a 10% or greater interest therein as of the Closing Date), clause (ii) if the REIT is a Public Vehicle, clause (iv) or clause (v) above); (C) the representations set forth in Section 4.1.9 hereof shall continue to be true and correct after giving effect to any such Transfer and except with respect to any Transfer of a direct or indirect interest in a Public Vehicle or pursuant to clause (v), transferee and its principals are not an Embargoed Person and the representations set forth in Section 4.1.35 hereof shall continue to be true and correct after giving effect to any such Transfer. ; (D) such Transfer shall be at Borrower’s sole cost and expense; (E) if after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct interests in Borrower is owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct interest in Borrower as of the Closing Date, Borrower shall, no less than ten (10) days prior to the effective date of any such Transfer, deliver to Administrative Agent an Additional Insolvency Opinion reasonably acceptable to Administrative Agent; (F) to the extent that any Transfer (other than any Transfer of shares in a Restricted Party that is a Public Vehicle and except with respect to any Transfer pursuant to clauses (iv) or (v)) will result in the transferee (either itself or collectively with its Affiliates) after giving effect to such Transfer owning a 10% or greater equity interest (directly or indirectly) in Borrower (that did not own a 10% or greater interest therein as of the Closing Date), Administrative Agent shall (x) have the right to perform any searches and/or reasonably request other diligence from Borrower to permit Administrative Agent and each Lender to comply with its then current “know your customer” requirements, including, but not limited to Patriot Act and OFAC searches and (y) receive Satisfactory Search Results, at Borrower’s cost and expense, as a condition precedent to such Transfer; (G) for so long as the Loan shall remain outstanding, no such Transfer or encumbrance of any direct interests in Mortgage Borrower shall pay any be permitted (other than the pledges and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements security interests securing the Loan and any fees Transfer pursuant to clause (v)); (H) for so long as the Mezzanine B Loan shall remain outstanding, no such Transfer or encumbrance of any direct interests in Borrower shall be permitted (other than the pledges and expenses security interests securing the Mezzanine B Loan and any Transfer pursuant to clause (v)); (I) for so long as the Mezzanine C Loan shall remain outstanding, no such Transfer or encumbrance of any direct interests in Mezzanine B Borrower shall be permitted (other than the Rating Agenciespledges and security interests securing the Mezzanine C Loan and any Transfer pursuant to clause (v)); (J) for so long as the Loan, the Mortgage Loan or any other Mezzanine Loan shall remain outstanding, neither Mortgage Borrower nor Mezzanine Borrower shall issue preferred equity interests (except as otherwise permitted pursuant to the Mortgage Loan Documents, Loan Documents, Mezzanine B Loan Documents, or Mezzanine C Loan Documents, as applicable); (K) all Transfers must be made in accordance with all Gaming Regulations, including receipt of any required Gaming Licenses; and (L) in no event may Borrower effect a Transfer, or permit or suffer any Transfer, that would result in a Gaming License Default.
(ed) Without limiting Lenderthe prior written consent of Administrative Agent, Borrower shall not and shall not cause or permit Mortgage Borrower to permit any Transfer (including any Sale or Pledge) of any interest in CPLV Tenant or any interest of CPLV Tenant in the CPLV Lease, except that Administrative Agent’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfersconsent shall not be required, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditionsin connection with:
(i) Borrower one or a series of Transfers of the direct or indirect legal or beneficial interests in CEC, including any acquisition, merger, amalgamation or consolidation of CEC, shall pay Lender a transfer fee equal to one percent be permitted, so long as (1%) either (x) CEC, an entity that acquires a controlling interest in CEC or, in the case of a merger, consolidation or amalgamation of CEC where CEC is not the surviving entity, the surviving entity (the entity that acquires a controlling interest in CEC or that survives a merger, amalgamation or consolidation with CEC (if CEC is not the survivor), a “Replacement CEC Sponsor”) remains a Public Vehicle or (y) immediately after giving effect to such Transfer, CEC or the Replacement CEC Sponsor satisfies the requirements of a Qualified CPLV Replacement Guarantor and (2) in the case where after such Transfer, CEC is not a Public Vehicle, the surviving Public Vehicle or entity that qualifies as a Qualified CPLV Replacement Guarantor pursuant to clause (1)(x) or (1)(y) above, as applicable, delivers a reaffirmation of the outstanding principal balance of CPLV Lease Guaranty, in form and substance reasonably acceptable to Administrative Agent contemporaneous with such Transfer or, if requested by Administrative Agent, a replacement guaranty substantially similar to the Loan at the time of CPLV Lease Guaranty or in such transferother form and substance as reasonably acceptable to Administrative Agent;
(ii) Borrower shall pay one or more encumbrances of CPLV Tenant’s leasehold interest in the Property pursuant to one or more mortgages and/or pledges of the direct or indirect equity interests in CPLV Tenant, to secure indebtedness of CPLV Tenant and/or its direct or indirect parent entities or Affiliates (each, a “CPLV Tenant Loan”), and the lender of any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including CPLV Tenant Loan (a “CPLV Tenant Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes”);
(iii) The proposed transferee one or a series of Transfers (except for a Pledge), (a) of not more than forty-nine percent (49%) of the “Transferee”direct or indirect stock, partnership interests or membership interests (as the case may be) in CPLV Tenant, or Transferee’s Principals must have demonstrated expertise the occurrence of a Permitted CPLV Tenant Interposition, or (b) of the direct or indirect stock, partnership interests or membership interests (as the case may be) in owning CPLV Tenant so long as after giving effect thereto CEC (or following any Transfer under Section 5.2.10(e)(i) above, the Replacement CEC Sponsor) shall control and operating properties similar own not less than fifty-one percent (51%) of the economic and beneficial interests in location, size, class and operation to the Property, which expertise shall be reasonably determined by LenderCPLV Tenant);
(iv) Transferee and Transferee’s Principals shall, as a Transfer of 100% of the date direct or indirect legal and beneficial interests in CPLV Tenant and/or the leasehold interest of CPLV Tenant in the Property (subject to exclusion with respect to items that are not capable of being mortgaged and that, in the aggregate, are de minimis) pursuant to or at any time after a foreclosure (or conveyance in lieu thereof or pursuant to any other exercise of remedies) of the CPLV Tenant Loan by CPLV Tenant Lender, subject to satisfaction of the following conditions:
(A) either of the following conditions shall be satisfied (the “CPLV Tenant Transferee Requirement”):
(1) (x) the proposed transferee that assumes all of the obligations, liabilities and rights of CPLV Tenant under the CPLV Lease and CPLV Lease Documents (the “CPLV Tenant Transferee”) shall be a Qualified CPLV Tenant Transferee or a Qualified CPLV Tenant Transferee shall Control and own not less than 51% of the economic and beneficial interests in CPLV Tenant or such transferCPLV Tenant Transferee after such Transfer, have an aggregate net worth (y) a replacement lease guarantor that is a Qualified CPLV Replacement Guarantor shall execute a replacement guaranty substantially similar to the CPLV Lease Guaranty or in such other form and liquidity substance as acceptable to Administrative Agent and (z) the Property is managed by a Qualified Replacement Manager; or
(2) (x) a transferee that satisfies the requirements in (b) through (g) in the definition of “Qualified CPLV Tenant Transferee” shall be, or Control and own not less than 51% of the economic and beneficial interests in CPLV Tenant or CPLV Tenant Transferee after such Transfer, (y) the CPLV Lease is guaranteed by CEC (or following any Transfer under Section 5.2.10(e)(i) above, the Replacement CEC Sponsor) and (z) the Property is managed by the Manager under the Management Agreement (or a Qualified Replacement Manager under a Replacement Management Agreement in the event Mortgage Borrower terminated Manager in accordance with Section 16.5 of the Management Agreement and the terms hereunder (unless Administrative Agent has consented in its sole and absolute discretion to the permanent termination of the Management Agreement)); and
(B) such Transfer shall not diminish any of the rights of Mortgage Borrower or Mortgage Lender under, or other result in any change to the transition services for the benefit of Mortgage Borrower and Mortgage Lender, set forth in the Transition Services Agreement or under the Mortgage Loan Documents;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party prior to any bankruptcy proceedingsTransfer pursuant to clause (iv) above, voluntary or involuntarya Transfer of all right, made title and interest of CPLV Tenant in the CPLV Lease to an assignment for Affiliate of CPLV Tenant that is owned and Controlled by CEC (the benefit “Affiliate Tenant Transferee”), so long as a condition precedent to such Transfer, (A) there is no Uncured CPLV Lease Event of creditors or taken advantage of any insolvency actDefault, or any act for the benefit of debtors within seven (7B) years prior to the date of the proposed Transfer;
(vi) Affiliate Tenant Transferee shall assume all of the obligations of Borrower CPLV Tenant under the CPLV Lease SNDA, the CPLV Security Documents and all other Mortgage Loan Documents and/or Loan Documents to which CPLV Tenant is a party, in a manner reasonably satisfactory to Mortgage Lender and/or Administrative Agent, as applicable, in all material respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.substan
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporationcorporation or trust, any mergerthe sale, consolidation conveyance, transfer, disposition, alienation, hypothecation or Sale or Pledge encumbering of more than 10% of the issued and outstanding capital stock of such corporation’s stock Restricted Party (or the creation or issuance of new stockshares of capital stock in such Restricted Party so that immediately after such issuance (in one or a series of transactions) the total capital stock then issued and outstanding is more than 110% of the total immediately prior to such issuance); (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or a change in the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of ownership interests in any general partner or any profits joint venturer, either voluntarily, involuntarily or proceeds relating to such partnership interestotherwise, or the Sale sale, conveyance, transfer, disposition, alienation, hypothecation or Pledge encumbering of limited partnership interests all or any profits portion of the interest of any such general partner or proceeds relating to such limited joint venturer (whether in the form of a beneficial, membership or partnership interest or in the creation form of a power of direction, control or issuance of new limited partnership interestsmanagement, or otherwise); or (v) if a Restricted Party is a limited liability company, a change in the ownership interests in any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) either voluntarily, involuntarily or otherwise, or the Sale sale, conveyance, transfer, disposition, alienation, hypothecation or Pledge encumbering of all or any portion of the membership interest of a any such managing member (whether in the form of a beneficial, membership or if no managing memberpartnership interest or in the form of a power of direction, any member) control or any profits or proceeds relating to such membership interestmanagement, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereofotherwise).
(d) Notwithstanding the foregoing, however, (i) limited partnership interests in any Restricted Party shall be freely transferable without the consent of Lender, (ii) any involuntary transfer caused by the death of any Restricted Party or any general partner, shareholder, joint venturer, manager, member or beneficial owner of a trust shall not be an Event of Default so long as Borrower is reconstituted, if required, following such death and so long as those persons responsible for the management of the Property and Borrower remain unchanged as a result of such death or any replacement management is approved by Lender, (iii) gifts for estate planning purposes of any individual’s interests in any Restricted Party to the spouse or any lineal descendant of such individual, or to a trust for the benefit of any one or more of such individual, spouse or lineal descendant, shall not be an Event of Default so long as Borrower is reconstituted, if required, following such gift and so long as those persons responsible for the management of the Property and Borrower remain unchanged following such gift or any replacement management is approved by Lender, and (iv) membership interests or limited partnership interests in any Restricted Party and interests in any member of any Restricted Party (collectively, “Permitted Transfers”) may be transferred to any Affiliate of a Restricted Party without the consent of Lender, provided that, at all times, C▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or C▇▇▇ Credit Property Trust II, Inc. must continue to Control Borrower and Guarantor.
(e) Notwithstanding the foregoing provisions of this Section 5.2.10Section, Lender’s consent shall not be required in connection with one or at any time other than the period commencing thirty (30) days prior to a series of Transfers, of not more than ten percent Securitization and ending thirty (10%30) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no days after such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such TransferSecuritization, Lender shall receive not withhold its consent to a Transfer of the Property provided that Lender receives not less than thirty sixty (3060) days prior written notice of such proposed Transfer. Borrower shall pay any Transfer and all reasonable out-of-pocket costs no Event of Default has occurred and expenses incurred in connection with such Transfers (including Lender’s counsel fees is continuing, and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay or cause to be paid Lender a transfer an administrative fee of not more than $4,000 and an assumption fee equal to one percent (11.0%) of the outstanding principal balance of the Loan at the time of such transferTransfer, provided, however, that (A) no administrative fee or assumption fee shall be payable in connection with (1) a Transfer by the initial Borrower to an Identified Affiliate or (2) an initial Transfer by the initial Borrower or an Identified Affiliate to an unrelated party prior to Securitization, and (B) an administrative fee of not more than $4,000 and no assumption fee, shall be payable in connection with an initial Transfer by the initial Borrower or an Identified Affiliate to an unrelated party after Securitization;
(ii) Borrower shall pay or cause to be paid any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the reasonable fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume (subject to Section 9.3) all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 4.1.30 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, agreements and covenants and legal opinions reasonably required by Lender, provided that such certificates, agreements and covenants shall not materially increase the obligations of Borrower under the Loan Documents or materially decrease the rights of Borrower under the Loan Documents;
(x) If required by Lender, Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a qualification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Intentionally omitted;
(xii) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity Indemnity reasonably satisfactory to Lender.;
(xixiii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance PolicyPolicy which endorsement shall insure the lien of the Mortgage, as modified by the assumption agreement, as a valid first lien on the Property and naming Property, shall name the Transferee as owner of the Property, which endorsement and shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;; and
(xiixiv) If applicable, the The Property shall be managed by a Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets . Immediately upon a Transfer to such Transferee and the satisfaction of all of the Lender’s underwriting standards related above requirements, the named Borrower and Guarantor herein shall be released from all liability under this Agreement, the Note, the Mortgage and the other Loan Documents accruing after such Transfer. The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to its financial condition, cash flow, operating income, physical condition, management and operationprovide written evidence thereof reasonably requested by Borrower.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Transfers. (a) Borrower acknowledges Borrowers acknowledge that Lender has examined and relied on the experience of Borrower Borrowers and its stockholders, general partners, members, Key Principals their direct and (if Borrower is a trust) beneficial owners indirect members in owning and operating properties such as the Property Collateral and Mortgage Borrowers in agreeing to make the Loan, and will continue to rely on Borrower’s Borrowers’ ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Additionally, Borrowers acknowledge that Lender has examined and relied on the experience of Mortgage Borrowers and their general partners, members, principals and (if any Mortgage Borrower acknowledges is a trust) beneficial owners, as applicable, in owning and operating properties such as the Properties and in owning intellectual property such as the IP, in agreeing to make the Loan, and will continue to rely on Mortgage Borrowers’ ownership of the Properties and the IP as a means of maintaining the value of the Properties and the IP and, therefore, indirectly the value of the Collateral, as security for repayment of the Debt and the performance of the obligations contained in the Loan Documents. Borrowers acknowledge that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower Borrowers default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower Borrowers shall not, and shall not permit any Transfer Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, license, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Property or any part thereof or any legal or beneficial interest therein therein, or any IP or any part thereof or any legal or beneficial interest of Borrower in therein, or the Loan (including Collateral or any of its rights, duties and obligations under this Agreement and the other Loan Documents) part thereof or any legal or beneficial interest therein; or (ii) permit a Sale or Pledge of an any interest in any Transfer Restricted PartyParty (any of the actions in the foregoing clauses (i) or (ii), a “Transfer”), other than than, notwithstanding anything to the contrary contained in this Section 5.2.10:
(A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and hereof;
(B) the pledge of the membership interests in each Mortgage Borrower as collateral for the First Mezzanine Loan and, if applicable, the exercise of remedies by First Mezzanine Lender including, without limitation, any Transfer of all or a portion of such membership interests in connection with a foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure under the First Mezzanine Loan Documents, provided that any such exercise of remedies is performed in accordance with and subject to the conditions and restrictions set forth in the Intercreditor Agreement and as a condition precedent to any foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure of such membership interests the First Mezzanine Lender shall pay to Mortgage Lender a transfer fee in an amount equal to 1.00% of the sum of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan Outstanding Principal Balance;
(C) the pledge of the membership interests in each First Mezzanine Borrower as collateral for the Second Mezzanine Loan and, if applicable, the exercise of remedies by Second Mezzanine Lender, including, without limitation, any Transfer of all or a portion of such membership interests in connection with a foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure under the Second Mezzanine Loan Documents, provided that any such exercise of remedies is performed in accordance with and subject to the conditions and restrictions set forth in the Intercreditor Agreement and as a condition precedent to any foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure of such membership interests the Second Mezzanine Lender shall pay to Mortgage Lender a transfer fee in an amount equal to 1.00% of the sum of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan Outstanding Principal Balance;
(D) the pledge of the membership interests in each Second Mezzanine Borrower as collateral for the Loan and, if applicable, the exercise of remedies by Lender, including, without limitation, any Transfer of all or a portion of such membership interests in connection with a foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure under the Loan Documents, provided that any such exercise of remedies is performed in accordance with and subject to the conditions and restrictions set forth in the Intercreditor Agreement and as a condition precedent to any foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure of such membership interests the Lender shall pay to Mortgage Lender a transfer fee in an amount equal to 1.00% of the sum of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan Outstanding Principal Balance;
(E) any Release Parcel Sale or an IP Sale, in each instance in accordance with the applicable provisions of Section 2.5 of the Mortgage Loan Agreement;
(F) Intentionally Deleted;
(G) any IP License or Adjacent Property IP License granted in accordance with the provisions of Section 5.1.26 hereof;
(H) the Permitted TransfersEncumbrances and Permitted IP Encumbrances;
(I) the issuance of new stock in, the merger or consolidation of, and/or the Sale or Pledge of the stock in, any Publicly Traded Entity who owns a direct or indirect ownership interest in any Transfer Restricted Party;
(iiiJ) enter into the transfer of indirect ownership interests in any plan of division, Mortgage Borrower in order to create one or divide, establish a protected series, create a more new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement mezzanine borrowers for any New Mezzanine Loan as contemplated under the Mortgage Loan Agreement; and
(K) the transfer by deed of any applicable Partial Release Parcel to a Subsidiary Transferee and the subsequent transfer of all of the membership interests held by Adjacent Borrower in such Subsidiary Transferee, in each instance in accordance with Section 2.5.1(f) of the Mortgage Loan Agreement; provided, however, that in the case of each of the foregoing clauses (A) — (K), such Transfer shall only be permitted hereunder if it does not violate any Legal Requirements, including specifically, but without Lender's prior written consentlimitation, any Gaming Laws, or suspend or terminate any liquor license applicable to a Property.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein any Borrower or Mortgage Borrower, as applicable, agrees to sell a Property or any part thereof, the Property IP, the Collateral or any part thereof for a price to be paid in installments; (ii) an agreement by any Mortgage Borrower leasing all or a substantial part of the a Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, any Mortgage Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Transfer Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Transfer Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation resignation, admission or addition of a general partner or the Sale or Pledge of the general partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Transfer Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation resignation, admission or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing or managing membership interests or the creation or issuance of new non non-managing or managing membership interests; (vi) if a Transfer Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Transfer Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent any Manager (including including, without limitation, an Affiliated Manager) other than in accordance with the Mortgage Loan Agreement and Section 5.1.22 hereof.
; or (dviii) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one any deed-in-lieu or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent consensual foreclosure relating to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection Property with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, Mortgage Lender or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to LenderAffiliate thereof.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Sources: Third Mezzanine Loan Agreement (Hard Rock Hotel Holdings, LLC)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.105.2.10 or Section 2.6, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Individual Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty (collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent5.1.20.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the an Individual Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the an Individual Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof).
(d) Notwithstanding the foregoing, the provisions of this Section 5.2.10, Lender’s consent 5.2.10 shall not be required restrict:
(i) the Transfer, in connection with one or a series of Transfersthe aggregate, of not more less than ten forty-nine percent (1049%) of the stockdirect or indirect interests in Sabre;
(ii) the merger or consolidation of Sabre or Sabre Holdings Corporation or the sale of all or substantially all of the assets of, or interests in, Sabre or Sabre Holdings Corporation to a single transferee; provided that the surviving entity (if not Sabre) reaffirms all of the obligations under the Sabre Leases;
(iii) the Transfer of direct or indirect interests of Sabre to any entity that satisfies the Financial Criteria; or
(iv) the sale, transfer or issuance of stock in Sabre or Sabre Holdings Corporation (or any successor thereof); provided such stock is listed on the New York Stock Exchange or another nationally or internationally recognized stock exchange.
(e) Lender reserves the right to condition the Transfer of the Properties upon: (i) a modification of the terms hereof, the limited partnership interests Note, the Mortgage or non-managing membership interests the other Loan Documents as may be required by Lender to reflect the new ownership of the Properties and assumption of the Loan; (ii) an assumption of this Agreement, the Note, the Mortgage and the other Loan Documents as so modified by the case may beproposed transferee, subject to the provisions of Section 9.4 hereof; (iii) in a Restricted Party; providedpayment of all of actual, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs fees and expenses incurred in connection with such Transfers (including Lender’s counsel Transfer including, without limitation, the cost of any third party reports, legal fees and disbursements and any expenses, Rating Agency fees and expenses of or required legal opinions; (iv) the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver payment of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer non-refundable $5,000 application fee and an assumption fee equal to one percent (1%) $250,000 for each Transfer of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
Properties; (v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit delivery of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of a nonconsolidation opinion reflecting the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner transfer satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
; (viivi) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transfereethe proposed transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations continued compliance with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 Section 4.1.30 and Section 5.2.9 hereof; (vii) the delivery of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably evidence satisfactory to Lender that the single purpose nature and (B) all certificatesbankruptcy remoteness of Borrower, agreementsits shareholders, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicablethe case may be, following such transfers are in accordance with the then current standards of Borrower who are limited partners or members, as applicable, of Borrower as Lender and the Rating Agencies; (viii) prior to any release of the date of this Agreement Guarantor, a substitute guarantor reasonably acceptable to Lender (each Lender agreeing that a “Current Owner”Qualified Transferee or a Person that satisfies the Financial Criteria shall be satisfactory to Lender) shall have assumed the Guaranty executed by Guarantor or executed a replacement guaranty reasonably satisfactory to Lender (it being agreed that a guaranty in substantially the same form as is executed by the Guarantor on the Closing Date shall be satisfactory to Lender), ; and (iiix) Lender’s approval of the transferee’s creditworthiness, reputation and qualifications of the transferee and, if the Loan has been included in a Securitization and if required by Lender, confirmation in writing from the Rating Agencies to immediate family members (which the effect that such transfer will not result in a re-qualification, reduction or withdrawal of the then current rating assigned to the Securities or any class thereof in any applicable Securitization; provided that Lender shall be limited deemed to a spouse, parent, child have approved the transferee and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: confirmation shall not be required if (A) no Default the transferee is a Qualified Transferee or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to transferee is wholly-owned, directly or indirectly, by a successor tenant under the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of Sabre Leases which satisfies the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereofFinancial Criteria. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s a Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
(f) If as a result of any direct or indirect Transfers of interests in Borrower or any Principal (regardless of whether Lender’s consent is required in connection therewith) more than forty-nine percent (49%) in the aggregate of direct or indirect interests in Borrower or Principal is owned by any Person that owned less than a forty-nine percent (49%) direct or indirect interest in Borrower or Principal as of the Closing Date, Lender shall, as a condition to such Transfer receive a nonconsolidation opinion acceptable to it and the Rating Agencies (Lender agreeing that a nonconsolidation opinion in substantially the same form delivered on the Closing Date shall satisfactory to Lender). In addition, prior to any release of the Guarantor, a substitute guarantor reasonably acceptable to Lender (Lender agreeing that a Qualified Transferee or a Person that satisfies the Financial Criteria shall be an acceptable substitute guarantor) shall have assumed the Guaranty executed by Guarantor or executed a replacement guaranty reasonably satisfactory to Lender (it being agreed that a replacement guaranty in substantially the same form executed by Guarantor on the Closing Date shall be satisfactory to Lender).
Appears in 1 contract
Sources: Loan Agreement (Sabre Corp)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating leasing properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) enter into any PACE Loan, (iii) permit a Sale or Pledge of an interest in any Restricted Party, (iv) permit a Sale or Pledge of the CPLV Lease or any interest therein or (v) permit a Sale or Pledge of any interest in CPLV Tenant or CPLV Tenant’s leasehold interest in the Property other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and 5.1.20, (B) Permitted TransfersTransfers (including Permitted Encumbrances), (C) pursuant to customary short-term occupancy agreements with the CPLV Tenant or short-term hotel guests, or (iiiD) enter into any plan a Transfer of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any portion of the foregoing without Lender's prior written consentProperty to a Governmental Authority in connection with a Condemnation of such portion of the Property in accordance with Section 6.3 hereof.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases the CPLV Lease or any CPLV Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) Manager other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.105.2.10(a), Lender’s consent shall not be required in connection with (i) one or a series of TransfersTransfers (except for a Pledge), of (x) not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted PartyParty or (y) the indirect equity interests in Mezzanine C Borrower by any Person that owns less than forty-nine percent (49%) of the economic and legal beneficial interests in, and does not Control, any of Borrower, Principal, any Mezzanine Borrower or Guarantor, (ii) any transfer of any direct or indirect legal or beneficial interests in the REIT, so long as it is a Public Vehicle, (iii) the cancellation, surrender, disposition, issuance, sale, grant, or Transfer of the operating partnership units of Guarantor, so long as the REIT continues to Control Guarantor and own directly or indirectly not less than 51% of the legal and beneficial interest in Guarantor, (iv) the pledge of or grant of a security interest the direct or indirect equity interests in Borrower as security for the Mezzanine Loan, (v) the exercise by any Mezzanine Lender of any rights or remedies such Mezzanine Lender may have under the applicable Mezzanine Loan Documents with respect to the pledge and/or security interest referred to in the foregoing clause (iv), and (vi) the Mezzanine C Equity Conversion; provided, however, no that with respect to each such Transfer (other than under clause (v) or clause (vi) above), (A) after giving effect to such Transfer, (x) REIT shall result continue to Control Borrower and Guarantor, (y) REIT shall continue to own, directly or indirectly, at least fifty-one percent (51%) in the Change aggregate of Control the legal and beneficial interest in a Restricted Party Borrower and (z) Guarantor shall continue to own, directly or cause any Key Principal to no longer be a Key Principal indirectly, at least fifty-one percent (51%) in the aggregate of the legal and beneficial interest in Borrower, and (B) as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer (except with respect to any Transfer pursuant to clause (i) or clause (iii) to the extent that any such Transfer will not result in the transferee (either itself or collectively with its Affiliates) after giving effect to such Transfer owning a 10% or greater equity interest (directly or indirectly) in Borrower (that did not own a 10% or greater interest therein as of the Closing Date), clause (ii) if the REIT is a Public Vehicle, clause (iv) or clause (v) above), (C) the representations set forth in Section 4.1.9 and hereof shall continue to be true and correct after giving effect to any such Transfer and except with respect to any Transfer of a direct or indirect interest in a Public Vehicle or pursuant to clause (v), transferee and its principals are not an Embargoed Person and the representations set forth in Section 4.1.35 hereof shall continue to be true and correct after giving effect to any such Transfer. ; (D) such Transfer shall be at Borrower’s sole cost and expense; (E) if after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct interests in Borrower is owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct interest in Borrower as of the Closing Date, Borrower shall, no less than ten (10) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and after a Securitization, the Approved Rating Agencies; (F) to the extent that any Transfer (other than any Transfer of shares in a Restricted Party that is a Public Vehicle and except with respect to any Transfer pursuant to clauses (iv) or (v)) will result in the transferee (either itself or collectively with its Affiliates) after giving effect to such Transfer owning a 10% or greater equity interest (directly or indirectly) in Borrower (that did not own a 10% or greater interest therein as of the Closing Date), Lender shall (x) have the right to perform any searches and/or reasonably request other diligence from Borrower to permit Lender to comply with its then current “know your customer” requirements, including, but not limited to Patriot Act and OFAC searches and (y) receive Satisfactory Search Results, at Borrower’s cost and expense, as a condition precedent to such Transfer, (G) for so long as the Mezzanine A Loan shall remain outstanding, no such Transfer or encumbrance of any direct interests in Borrower shall pay any be permitted (other than the pledges and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements security interests securing the Mezzanine A Loan and any fees Transfer pursuant to clause (v)); (H) for so long as the Mezzanine B Loan shall remain outstanding, no such Transfer or encumbrance of any direct interests in Mezzanine A Borrower shall be permitted (other than the pledges and expenses security interests securing the Mezzanine B Loan and any Transfer pursuant to clause (v)), (I) for so long as the Mezzanine C Loan shall remain outstanding, no such Transfer or encumbrance of any direct interests in Mezzanine C Borrower shall be permitted (other than the Rating Agenciespledges and security interests securing the Mezzanine C Loan and any Transfer pursuant to clause (v)), (J) for so long as the Loan or any Mezzanine Loan shall remain outstanding, neither Borrower nor Mezzanine Borrower shall issue preferred equity interests (except as otherwise permitted pursuant to the Loan Documents, Mezzanine A Loan Documents, Mezzanine B Loan Documents or Mezzanine C Loan Documents, as applicable), (K) all Transfers must be made in accordance with all Gaming Regulations, including receipt of any required Gaming Licenses and (L) in no event may Borrower effect a Transfer, or permit or suffer any Transfer, that would result in a Gaming License Default.
(e) Without limiting the prior written consent of Lender, Borrower shall not permit any Transfer (including any Sale or Pledge) of any interest in CPLV Tenant or any interest of CPLV Tenant in the CPLV Lease, except that Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditionsshall not be required in connection with:
(i) Borrower one or a series of Transfers of the direct or indirect legal or beneficial interests in CEC, including any acquisition, merger, amalgamation or consolidation of CEC, shall pay Lender a transfer fee equal to one percent be permitted, so long as (1%) either (x) CEC, an entity that acquires controlling interest in CEC or, in the case of a merger, consolidation or amalgamation of CEC where CEC is not the outstanding principal balance of surviving entity, the Loan at surviving entity (the time of such transfer;
entity that acquires a controlling interest in CEC or that survives a merger, amalgamation or consolidations with CEC (iiif CEC is not the survivor), a “Replacement CEC Sponsor”) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with remains a Public Vehicle or (y) immediately after giving effect to such Transfer, including Lender’s counsel fees CEC or the Replacement CEC Sponsor satisfies the requirements of a Qualified CPLV Replacement Guarantor and disbursements and all recording fees(2) in the case where after such Transfer, title insurance premiums and mortgage and intangible taxes;
CEC is not a Public Vehicle, the surviving Public Vehicle or entity that qualifies as a Qualified CPLV Replacement Guarantor pursuant to clause (iii) The proposed transferee (the “Transferee”1)(x) or Transferee’s Principals must have demonstrated expertise (1)(y) above, as applicable, delivers a reaffirmation of the CPLV Lease Guaranty, in owning form and operating properties substance reasonably acceptable to Lender contemporaneous with such Transfer or, if requested by Lender, a replacement guaranty substantially similar in location, size, class and operation to the Property, which expertise shall be CPLV Lease Guaranty or in such other form and substance as reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(vii) Transfereeone or more encumbrances of CPLV Tenant’s leasehold interest in the Property pursuant to one or more mortgages and/or pledges of the direct or indirect equity interests in CPLV Tenant, Transfereeto secure indebtedness of CPLV Tenant and/or its direct or indirect parent entities or Affiliates (each, a “CPLV Tenant Loan”), so long as (x) each such mortgage or pledge agreement shall provide that any security interest granted under such mortgage or pledge agreement with respect to Tenant’s Principals Pledged Property (as defined in the CPLV Lease) shall be subordinate to the lien granted in favor of Borrower and all other entities which may otherwise be owned or Controlled directly or indirectly by Transfereein accordance with the terms and conditions hereunder and the CPLV Lease SNDA and the CPLV Tenant Loan Intercreditor Agreement and (y) the lender of any CPLV Tenant Loan that encumbers Tenant’s Principals Pledged Property (a “Related EntitiesCPLV Tenant Lender”) must shall enter into an intercreditor agreement with Lender in the form of the CPLV Existing Intercreditor Agreement (or join the CPLV Existing Intercreditor Agreement), in form and substance reasonably acceptable to Lender (a “CPLV Tenant Loan Intercreditor Agreement”) as a condition precedent to such CPLV Tenant Loan;
(iii) one or a series of Transfers (except for a Pledge), of not have been party more than forty-nine percent (49%) of the direct or indirect stock, partnership interests or membership interests (as the case may be) in CPLV Tenant;
(iv) a Transfer of 100% of the direct or indirect legal and beneficial interests in CPLV Tenant and/or the leasehold interest of CPLV Tenant in the Property (subject to exclusion with respect to items that are not capable of being mortgaged and that, in the aggregate, are de minimis) pursuant to or at any time after a foreclosure (or conveyance in lieu thereof or pursuant to any bankruptcy proceedingsother exercise of remedies) of the CPLV Tenant Loan by CPLV Tenant Lender, voluntary subject to satisfaction of the following conditions:
(A) either of the following conditions shall be satisfied (the “CPLV Tenant Transferee Requirement”):
(1) (x) the proposed transferee that assumes all of the obligations, liabilities and rights of CPLV Tenant under the CPLV Lease, CPLV Lease Documents and CPLV Trademark Agreements (the “CPLV Tenant Transferee”) shall be a Qualified CPLV Tenant Transferee or involuntarya Qualified CPLV Tenant Transferee shall Control and own not less than 51% of the economic and beneficial interests in CPLV Tenant or such CPLV Tenant Transferee after such Transfer, made an assignment (y) a replacement lease guarantor that is a Qualified CPLV Replacement Guarantor shall execute a replacement guaranty substantially similar to the CPLV Lease Guaranty or in such other form and substance as acceptable to Lender and (z) the Property is managed by a Qualified Replacement Manager; or
(2) (x) a transferee that satisfies the requirements in (b) through (g) in the definition of “Qualified CPLV Tenant Transferee shall be, or Control and own not less than 51% of the economic and beneficial interests in CPLV Tenant or CPLV Tenant Transferee after such Transfer, (y) the CPLV Lease is guaranteed by CEC (or following any Transfer under Section 5.2.10(e)(i) above, the Replacement CEC Sponsor) and (z) the Property is managed by the Manager under the Management Agreement (or a Qualified Replacement Manager under a Replacement Management Agreement in the event Borrower terminated Manager in accordance with Section 16.5 of the Management Agreement and the terms hereunder (unless Lender has consented in its sole and absolute discretion to the permanent termination of the Management Agreement))]; and
(B) such Transfer shall not diminish any of the rights of Borrower or Lender under, or other result in any change to the transition services for the benefit of creditors Borrower and Lender, set forth in the Transition Services Agreement or taken advantage of any insolvency act, or any act for under the benefit of debtors within seven (7) years prior to the date of the proposed TransferLoan Documents;
(viv) prior to any Transfer pursuant to clause (iv) above, a Transfer of all right, title and interest of CPLV Tenant in the CPLV Lease to an Affiliate of CPLV Tenant that is owned and Controlled by CEC (the “Affiliate Tenant Transferee”), so long as a condition precedent to such Transfer, (A) there is no Uncured CPLV Lease Event of Default, (B) Affiliate Tenant Transferee shall assume all of the obligations of Borrower CPLV Tenant under the CPLV Lease SNDA, the CPLV Security Documents and all other Loan Documents to which CPLV Tenant is a party, in a manner reasonably satisfactory to Lender in all material respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There Lender and Affiliate Tenant Transferee shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable execute and deliver to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its any modifications or their obligations with respect amendments to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions Loan Documents reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with such Transfer and shall take all such actions to continue the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its perfected security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.interest grant
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.105.2.10 and Section 5.2.11, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty (collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers5.1.20. For the purposes of this Section 5.2.10, or (iii) enter into any plan removal from the Property of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business memorabilia or other entity personal property provided to Borrower for use or provide display at the Property pursuant to the terms of the PH License Agreement (other than any replacement of the same in accordance with the terms hereof) shall be deemed to constitute a Transfer of a part of the Property and shall require the prior written consent of Lender in its operating agreement for any of the foregoing without Lender's prior written consentreasonable discretion in each instance.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof5.1.23.
(d) Notwithstanding the foregoing provisions of this Section 5.2.10, but subject to the satisfaction of all conditions set forth or referenced in this Section 5.2.10(d), Lender’s consent shall not be required in connection with any of the following Transfers (each a “Permitted Transfer”):
(i) the Transfer, in one or a series of Transferstransactions, of not more than ten percent (10%) 49% in the aggregate of the stock, indirect interests in either Borrower in the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Partyaggregate; provided, howeverprovided that after giving effect to such Transfer and any other Transfers, no such Transfer shall result in the Change of Control shall occur;
(ii) the Transfer, in one or a series of transactions, of any direct or indirect interests in any Restricted Party to any other Restricted Party, any Affiliate of a Restricted Party or cause to any Key Principal direct or indirect member or partner of any Restricted Party provided that after giving effect to such Transfer and any other Transfers, no Change of Control shall occur;
(iii) any Transfer by maintenance, devise or bequest or by operation of law upon the death of a natural person that was the holder of any direct or indirect interest in any Restricted Party to a member of the immediate family of such person or a trust established for the benefit of such immediate family member, provided that after giving effect to such Transfer and any other Transfers, no Change of Control shall occur;
(iv) the granting of the MezzCo Warrants to the MezzCo Warrantholders pursuant to the MezzCo Warrant Documents, and any Transfer of up to 37.5% in the aggregate of the direct interests in MezzCo as a result of any exercise of the MezzCo Warrants, provided that after giving effect to such Transfer and any other Transfers, no Change of Control shall occur;
(v) the granting of the EquityCo Warrants to the EquityCo Warrantholders pursuant to the EquityCo Warrant Documents, and any Transfer of up to 2.5% in the aggregate of the direct interests in EquityCo as a result of any exercise of the MezzCo Warrants, provided that after giving effect to such Transfer and any other Transfers, no Change of Control shall occur;
(vi) the granting of the Executive Options to executive employees of OpBiz, and any Transfer of up to 10% in the aggregate of the direct interests in EquityCo as a result of any exercise of the Executive Options, provided that after giving effect to such Transfer and any other Transfers, no Change of Control shall occur;
(vii) the Transfer, in one or a series of transactions, of any direct or indirect interests in any BH Guarantor provided that after giving effect to such Transfer and any other Transfers, no Change of Control shall occur; and
(viii) any arm’s-length sale of Personal Property by Borrower to a third party in the ordinary course of business and any disposition of Equipment and FF&E which is being replaced in the ordinary course of business or is otherwise no longer necessary or is immaterial. Notwithstanding the foregoing, each of the Permitted Transfers set forth in this Section 5.2.10(d) shall be a Key Principal of Borrowersubject to, and as Lender’s agreement to permit the same without specific consent, shall be conditioned upon the satisfaction of the following conditions:
(A) if such Transfer (either individually or in the aggregate with any prior Transfers) would result in a condition Change in Control of any Restricted Party, Lender shall receive not less than ten (10) Business Days prior written notice from Borrower of such Transfer;
(B) if such Transfer is of a direct interest in any Restricted Party (other than any Guarantor), Lender shall receive not less than ten (10) Business Days prior written notice from Borrower of such Transfer;
(C) if such Transfer (either individually or in the aggregate with any prior Transfers) would result in any Sponsor no longer holding any direct or indirect interest in any Restricted Party, Lender shall receive not less than ten (10) Business Days prior written notice from Borrower of such Transfer;
(D) if neither of the circumstances set forth in clauses (A), (B) or (C) shall apply with respect to each such Transfer, Lender shall receive not written notice of such Transfer from Borrower within ten (10) Business Days following the effective date of such Transfer; provided that, no such notice shall be required with respect to any Transfer of a direct or indirect interest in any Guarantor or Starwood NH unless the same shall result, either individually or in the aggregate with any prior Transfers, in a change in Control with respect to such Guarantor or Starwood NH;
(E) if after giving effect to any Permitted Transfer, more than forty-nine percent (49%) in the aggregate of the direct or indirect interests in a Restricted Party are owned by a Person and its Affiliates that owned less than forty-nine percent (49%) of the direct or indirect interests in such Restricted Party as of the Closing Date, a Rating Agency Confirmation shall have been obtained and, no less than thirty (30) days prior written notice to the effective date of any such proposed Transfer. , Borrower shall pay any deliver to Lender an Additional Insolvency Opinion acceptable to Lender and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(iiF) Borrower no Permitted Transfer (either individually or in the aggregate with any prior Transfers) shall pay cause or otherwise result in the termination, revocation and/or suspension of any Gaming License or otherwise have any material and adverse effect on the ability of OpBiz to operate the Casino Component in accordance with all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxesapplicable Gaming Laws;
(iiiG) The proposed transferee (the “Transferee”) no such Permitted Transfer of a direct interest in any Restricted Party or Transferee’s Principals must have demonstrated expertise of an indirect interest in owning and operating properties similar a Restricted Party that results in location, size, class and operation to the Property, which expertise a Change of Control of such Restricted Party shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Disqualified Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiiiH) The Property meets all of no such Permitted Transfer shall result, directly or indirectly, either individually or in the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicableaggregate, in Borrower may be transferred without Lender’s consent and without application of the fee set forth any Disqualified Transferee being in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), Control of any Current Owner Restricted Party or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender having a direct interest in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfera Restricted Party.
Appears in 1 contract
Sources: Loan Agreement (Bh Re LLC)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security Except for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10Permitted Transfers, Borrower shall not, and shall not permit any Restricted Party to do Subsidiary to, voluntarily or involuntarily transfer, sell, lease, license, lend or in any of the following other manner convey (collectively, a “Transfer”): ) any equitable, beneficial or legal interest in any material portion of its assets (including, without limitation, pursuant to a Division). Notwithstanding the foregoing, and for the avoidance of doubt, this Section 7.8 shall not prohibit (i) sellthe conversion by holders of any Permitted Convertible Debt in accordance with the terms of the indenture governing such Permitted Convertible Debt or Borrower’s delivery of the conversion consideration in connection therewith or the delivery of Common Stock (or other securities or property following a merger event, conveyreclassification or other change of the Common Stock), mortgageand Cash in lieu of fractional shares of Common Stock, grantnot to exceed Fifty Thousand Dollars ($50,000), bargainin exchange for, encumberor to induce conversions of, pledgePermitted Convertible Debt (ii) the Borrower’s making of any interest payments with respect to any Permitted Convertible Debt or (iii) the Borrower’s entry into or unwind or termination or payment of any premium in respect of, assignmaking any payment ((via proceeds of the related Permitted Convertible Indebtedness not to exceed twenty-five percent (25%) of the aggregate principal amount of such related Permitted Convertible Indebtedness deliveries in shares of Common Stock (or other securities or property following a merger event, grant options reclassification or other change of the Common Stock and Cash in lieu of fractional shares not to exceed Fifty Thousand Dollars ($50,000)) with respect to, or the Borrower otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of performing its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporationunder, any mergerPermitted Call Spread Transaction, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required without limitation in connection with one any settlement, unwind or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager termination thereof whether pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operationterms or otherwise.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender L▇▇▇▇▇ has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on BorrowerB▇▇▇▇▇▇▇’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender L▇▇▇▇▇ has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender L▇▇▇▇▇ can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, not to be unreasonably withheld, delayed or conditioned, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof (except in connection with any Condemnation) or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 hereof and (B) Permitted Transfers. For the avoidance of doubt, in no event shall the Transfers described in clauses (a), (b), (c), (d), (e), (g), (h) or (iiij) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentdefinition of “Permitted Transfers” set forth in Section 1.1 hereof require consent by L▇▇▇▇▇.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, BorrowerB▇▇▇▇▇▇▇’s right, title and interest in and to any Leases or any RentsRents or any Property Documents; (iii) if a Restricted Party is a corporation, any merger, consolidation division into two (2) or more legal entities or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation consolidation, division into two (2) or more legal entities or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation consolidation, division into two (2) or more legal entities or the change, removal, resignation or addition of a managing member or non-member nonmember manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing nonmanaging membership interests or the creation or issuance of new non managing nonmanaging membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation consolidation, division into two (2) or more legal entities or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof; or (viii) Borrower entering into or affirmatively consenting to any P▇▇▇ ▇▇▇▇.
(d) Notwithstanding the provisions of this Section 5.2.10, LenderL▇▇▇▇▇’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership direct or indirect ownership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a such Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer that results in the transferee owning ten percent (10%) or more of the direct or indirect ownership interests in a Borrower (which such transferee did not own 10% or more of the direct or indirect ownership interests in a Borrower prior to such Transfer), Lender (i) Borrower shall receive provide to Lender, not less than thirty ten (3010) days prior written notice to such transfer, the name and identity of each proposed transferee, together with the names of its controlling principals, the social security number (if applicable) or employee identification number (if applicable) of such transferee and controlling principals (if applicable), and such transferee’s and, if applicable, controlling principal’s home address or principal place of business, and home or business telephone number (if applicable) and (ii) Lender shall have received Satisfactory Search Results with respect to the proposed transferee and such controlling principals, if applicable; provided, further, however, the foregoing clause (i) and (ii) shall not be applicable in connection with any transfer (or pledging) of stock or membership interests in any publicly-held corporation or other publicly-held entity (in each case) which is listed on the New York Stock Exchange, the NASDAQ Global Select Market or another nationally-recognized stock exchange, or transfer or issuance of securities of the REIT provided that such securities are listed on the New York Stock Exchange, the NASDAQ Global Select Market or another nationally recognized stock exchange. If as a result of such Transfer, more than forty-nine percent (49%) of the direct or indirect ownership interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) of the aggregate direct or indirect ownership interests in a Restricted Party as of the Closing Date, Borrower shall, no less than ten (10) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and (if a Securitization has occurred) the Rating Agencies (which Additional Insolvency Opinion may be on the same form as the Insolvency Opinion provided on the date hereof). Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies). In addition, at all times (other than in connection with a Mezzanine Control Event), Guarantor (or a Qualified Equity Holder) must continue to Control Borrower, and own, directly or indirectly, at least a 51% legal and beneficial interest in Borrower.
(e) Without limiting Lender’s discretion Notwithstanding anything to approve or disapprove any request for a waiver of the prohibition against Transferscontrary contained in this Section 5.2.10, Lender specifically reserves the right to condition shall not unreasonably withhold its consent to any waiver of a prohibited Transfer upon satisfaction sale, assignment, or other transfer of the Property (or such Property remaining after any releases of Individual Properties pursuant to Section 2.5.2 hereof) and the assumption of the Loan by the applicable Transferee provided that (i) Lender receives prior written notice of such transfer, (ii) no Event of Default has occurred and is continuing both at the time such notice is given and as of the closing date of such transaction, (iii) no such sale, assignment or other transfer of the Property shall occur on or prior to the Permitted Prepayment Date (or prior to the date that is ninety (90) days following minimum conditions:the Permitted Prepayment Date, if Lender delivers a written notice to Borrower on or prior to the Permitted Prepayment Date stating that a Securitization is imminently pending), and (iv) the following conditions precedent are satisfied (or waived in writing by L▇▇▇▇▇ or Servicer):
(i) Borrower shall pay Lender a transfer fee equal to the lesser of (a) $250,000.00 or (b) one-quarter of one percent (10.25%) of the outstanding principal balance Outstanding Principal Balance of the Loan at for each such Transfer resulting in the time assumption of such transferthe Loan;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, Transfer (including LenderL▇▇▇▇▇’s outside counsel reasonable fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the each Individual Property, which expertise shall be reasonably determined by LenderL▇▇▇▇▇;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender; with the understanding that if Transferee and Transferee’s Principals would otherwise satisfy the Qualified Replacement Guarantor or Qualified Equity Holder Thresholds, as the case may be, then this clause (iv) shall be deemed satisfied;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner reasonably satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance reasonably satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened in writing against Transferee, Transferee’s Principals or Related Entities which is not acceptable to LenderLender in its reasonable discretion and Lender shall have performed searches and/or received other diligence such that Lender is in compliance with L▇▇▇▇▇’s then current “know your customer” requirements and shall have received Satisfactory Search Results for any owner of Transferee which will own a 10% or greater equity interest (directly or indirectly) in Borrower after giving effect to such transfer;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to LenderLender in its reasonable discretion;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by LenderL▇▇▇▇▇;
(x) If required by Lender (and if a Securitization has occurred), Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender; with the understanding that a substitute guarantor that qualifies as a Qualified Replacement Guarantor will be acceptable to Lender.
(xixii) Borrower shall deliver, at its sole cost and expense, an endorsement (or equivalent) to the each Title Insurance PolicyPolicy insuring the Security Instruments, as modified by the assumption agreement, as a valid first lien liens on the each Individual Property and naming the Transferee as owner of the each Individual Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the that each Individual Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy Policies issued on the date hereof and the Permitted Encumbrances;
(xiixiii) If applicable, the Each Individual Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiiixiv) The Property meets all of the If requested by L▇▇▇▇▇, Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, direct or indirect limited partnership partnership, membership or membership other equity interests, as applicable, in Borrower a Restricted Party may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among direct or indirect limited partners or membersmembers or other equity owners, as applicable, of Borrower a Restricted Party who are direct or indirect limited partners or membersmembers or other equity owners, as applicable, of Borrower a Restricted Party as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer, if required by clause (J) below; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 4.1.30 hereof. Lender ; (I) upon Lender’s request, delivery of an Additional Insolvency Opinion acceptable to Lender; (J) in connection with any Additional Permitted Transfer that results in the transferee owning ten percent (10%) of the direct or indirect ownership interests in a Borrower (which such transferee did not own 10% or more of the direct or indirect ownership interests in a Borrower prior to such Transfer), (i) Borrower shall provide to Lender, not be required less than thirty (30) days prior to demonstrate any actual impairment such transfer, the name and identity of each proposed transferee, together with the names of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.controlling principal
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether 61 or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein therein, (ii) enter into or any interest of Borrower in subject the Loan (including any of its rightsProperty to a PACE Loan, duties and obligations under this Agreement and the other Loan Documents) or (iiiii) permit a Sale or Pledge of an interest in any Restricted Party, in either case, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 5.1.20, and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the any Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof. For greater specificity, a “Transfer” shall not include any transaction done pursuant to Section 5.2.10(b)(A), or (B).
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, Transfers of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall pay shall, no less than thirty (30) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies). In addition, at all times, but subject to Estate Planning Transfers, AMERCO must Control Borrower and own, directly or indirectly, at least a fifty-one percent (51%) legal and beneficial interest in Borrower.
(e) Without limiting No Transfer of the Property and assumption of the Loan shall occur during the period that is sixty (60) days prior to and sixty (60) days after a Securitization. Otherwise, 62 Lender’s discretion consent to approve or disapprove any request for a waiver one (1) time Transfer of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction Property and assumption of the Loan shall not be unreasonably withheld provided that Lender receives sixty (60) days prior written notice of such Transfer and no Event of Default has occurred and is continuing, and further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender Lender: (A) a non-refundable application fee of $5,000 in connection with such proposed transfer, and (B) a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at upon the time closing of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational 63 documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) If required by Lender, Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.;
(xixii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xiixiii) If applicable, the The Property shall be operated by Manager or managed by a Qualified Manager pursuant to a Replacement Management Agreement; and
(xiiixiv) The Property meets Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender. Immediately upon a Transfer to such Transferee and the satisfaction of all of the Lender’s underwriting standards related above requirements, the named Borrower and Guarantor herein shall be released from all liability under this Agreement, the Note, the Mortgage and the other Loan Documents accruing after such Transfer. The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to its financial condition, cash flow, operating income, physical condition, management and operationprovide written evidence thereof reasonably requested by Borrower.
(f) Notwithstanding any provision in the provisions of this Section 5.2.10 5.2.10, subject to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application satisfaction of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or membersEasement Criteria, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence the right to Lender thatgrant easements on the Property for utilities and other matters in the ordinary course of business, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. and Lender shall not be required to demonstrate any actual impairment subordinate the lien of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented applicable Mortgage to any previous Transfer.such easements. “Easement Criteria” shall mean the following:
Appears in 1 contract
Sources: Loan Agreement (Amerco /Nv/)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, partners and members, Key Principals as applicable, and (if principals of Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property and the Collateral as a means of maintaining the value of the Property as security for repayment of the Debt Indebtedness and the performance of the Other Obligationsobligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt Indebtedness or the performance of the Other Obligationsobligations, Lender can recover the Debt Indebtedness by a sale of the PropertyProperty and/or the Collateral.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.106.3, Borrower shall not, and shall not permit any Restricted Borrower Party or any other Person having a direct or indirect ownership or beneficial interest in Borrower, whether voluntarily or involuntarily, to do any of the following following: (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan to (including granting of any purchase options, rights of its rightsfirst refusal, duties and obligations under this Agreement and rights of first offer or similar rights in respect of any portion of the other Loan Documents) Collateral or the subjecting of any portion of the Collateral to restrictions on transfer), (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating an agreement for any the leasing of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property Propety for any purpose other than the actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any RentsRevenue (provided, that, any Leases to Tenants such as WeWork Companies Inc., Convene and Regus, for the use of the demised premises to rent space to third parties, shall be deemed to comply with this provision), or (iii) permit a Sale or Pledge of any direct or indirect interest in any Borrower Party or any Person having a direct or indirect ownership or beneficial interest in a Borrower Party, in each case, other than Permitted Transfers.
(c) A Transfer shall include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Collateral, the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial portion of the Property or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Gross Revenue; (iii) if a Restricted Borrower Party or its direct or indirect owners is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Borrower Party or its direct or indirect owners is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Borrower Party or its direct or indirect owners is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Borrower Party or its direct or indirect owners is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted such Borrower Party or its direct or indirect owners, any change in the situs of such trust, or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation any direct and/or indirect change of Control of Borrower such that Guarantor no longer directly and/or indirectly Controls Borrower; (viii) entering into any contract to do any of the managing agent foregoing (including an Affiliated Managerunless closing of such contract is conditioned on obtaining Lender’s consent) other than or (ix) Borrower certificating its interest under Article 8 or otherwise opting in accordance with Section 5.1.22 hereofto Article 8.
(d) Notwithstanding anything to the provisions of contrary contained in this Section 5.2.106.3, Lender’s consent the following Transfers (herein, the “Permitted Transfers”) shall be permitted hereunder, if and only if each of the requirements set forth herein are satisfied:
(i) a Lease entered into in accordance with this Agreement;
(ii) a Permitted Encumbrance;
(iii) a Transfer of publicly traded shares on a nationally or internationally recognized stock exchange in any indirect equity owner of Borrower; or
(iv) any other Transfer (but not a mortgage, pledge, hypothecation, encumbrance or grant of a security interest) of a direct or indirect interest in Borrower, provided that:
(A) on the date of the Transfer, no Event of Default shall exist;
(B) Borrower shall continue to be required a Single-Purpose Entity;
(C) Borrower shall pay all costs and expenses of Lender in connection with any Transfer, whether or not such Transfer is deemed to be a Permitted Transfer, including, without limitation, all fees and expenses of Lender’s counsel, whether internal or outside;
(D) in connection with any Transfer in which a Person that did not previously own ten percent (10%) or more of the aggregate direct and/or indirect ownership interests (at any tier of ownership) in Borrower shall acquire such a ten percent (10%) direct and/or indirect ownership interest (at any tier of ownership) in Borrower, then (I) Borrower shall, at least ten (10) Business Days before such Permitted Transfer, notify Lender of the proposed transfer and provide copies of all instruments effectuating such transfer, and any organizational documents that Lender shall require, and such other information as Lender shall reasonably request regarding the proposed transferee so as to conduct such background checks, investigations, Patriot Act, the U.S. Bank Secrecy Act, OFAC and other record searches as Lender shall reasonably (and any regulatory requirements and/or internal compliance, “know your customer” and/or committee requirements of Lender, to the extent such internal requirements are applied on a non-discriminatory basis, shall be deemed reasonable) require (at Borrower’s sole cost and expense), and if Lender, within ten (10) Business Days of receiving such notice from Borrower, sends a notice to Borrower that it has in good faith determined that such Transfer will result in a violation of its legal, regulatory or internal organizational requirements, such Transfer shall not constitute a Permitted Transfer and (II) such Transfer shall be conditioned upon Borrower’s ability to, after giving effect to such Transfer, remake the representations in Section 4.39 and continue to comply with the covenants set forth in Section 5.22;
(E) after giving effect to such Transfer, (A) a Brookfield Party shall continue to Control Borrower and own, in the aggregate, at least ten percent (10%) of all legal, beneficial and equity interests (direct or indirect) in Borrower, (B) a Brookfield Party shall continue to Control Guarantor and own at least twenty percent (20%) of all legal, beneficial and equity interests (direct or indirect) in Guarantor, (C) Guarantor shall continue to Control Borrower and own at least fifty-one percent (51%) of all legal, beneficial and equity interest (direct or indirect) in Borrower, and (D) at least fifty-one percent (51%) of all equity interests in Borrower are owned (directly or indirectly) by a Brookfield Party and one or more Qualified Equity Holders;
(F) any transferee acquiring twenty percent (20%) or more of the direct or indirect equity interests in Borrower shall be a series Qualified Transferee (and Borrower shall provide Lender with at least ten (10) Business Days’ prior written notice thereof);
(G) the Property shall continue to be managed by one or more Approved Property Manager(s), which shall control the day-to-day operations at the Property;
(H) the parking operations at the Property shall continue to be managed by one or more Approved Parking Managers(s), which shall control the day-to-day operations of Transfersthe parking garages; and
(I) if any such Transfer shall result in any Person (together with its Affiliates) acquiring more than forty-nine percent (49%) of the direct or indirect interest in Borrower and such Person (together with its Affiliates) did not own more than forty-nine percent (49%) of the direct or indirect interest in Borrower on the Closing Date, Borrower shall have delivered to Lender a new substantive non-consolidation opinion from a nationally recognized law firm (or a reputable law firm reasonably approved by Lender) in form and substance reasonably satisfactory to Lender (it being acknowledged that if such non- consolidation opinion is substantially in the form and substance of the Nonconsolidation Opinion, such non-consolidation opinion shall be deemed to be satisfactory to Lender).
(v) a pledge of any direct or indirect minority, non-Controlling interest in Guarantor that in each case do not (when aggregated with any other such pledges) result in more than ten percent (10%) of the stockdirect and indirect interests in Guarantor being pledged, provided, that the limited partnership interests or conditions set forth in Section 6.3(d)(iv) are satisfied;
(vi) Transfers of less than forty-nine percent (49%) (in the aggregate with respect to all Transfers consummated after the Closing Date) of the non-managing membership Controlling preferred interests (as the case may be) in a Restricted PartyBrookfield DLTA Fund Office Trust Investor Inc. and Brookfield DLTA Fund Office Trust Inc.; provided, howeverthat, no such if the Transfer shall result results in the Change of Control in a Restricted Party any Person (together with its Affiliates) owning ten percent (10%) or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses more of the Rating Agencies).
direct or indirect interests in Borrower and such Person (etogether with its Affiliates) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one did not own ten percent (110%) of the outstanding principal balance direct or indirect interests in Borrower prior to such Transfer, then, Borrower shall provide Lender with at least ten (10) Business Days’ prior written notice thereof and such Person must satisfy Lender’s current customary underwriting standards including, without limitation, background checks performed by Lender and review of such other information requested by Lender in connection with know your customer and anti-money laundering diligence; and
(vii) A pledge of direct or indirect equity interest and right to distributions from Guarantor only, so long as the following conditions are satisfied:
(A) No Event of Default shall exist;
(B) Borrower shall provide Lender with at least ten (10) Business Days’ prior written notice thereof;
(C) Such pledge is made in connection with a corporate-level financing of not less than $50,000,000 being provided by an Institutional Lender to a direct or indirect beneficial owner or equity owner in Guarantor (a “Corporate Loan”);
(D) Such pledge does not constitute more than thirty percent (30%) of the total value of the collateral for such Corporate Loan at the time of origination of such transferCorporate Loan;
(iiE) The entities directly pledged for such Corporate Loan own (either directly or through direct or indirect subsidiaries) not less than four (4) real estate assets in addition to the Property;
(F) Borrower shall pay have no obligations or liabilities with respect to any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;Corporate Loan; and
(iiiG) The proposed transferee loan documents in respect of such Corporate Loan provide that (1) the “Transferee”lender thereunder shall provide to Lender at least thirty (30) days’ prior written notice before the lender thereunder commences a foreclosure action or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in locationother exercise of its remedies, size(2) the lender thereunder shall, class and operation within fifteen (15) days following the exercise of its remedies, deliver to Lender a replacement non-consolidation opinion, (3) after giving effect to any such foreclosure, the Property, which expertise Borrower shall be reasonably determined by Lender;
a Single-Purpose Entity, and (iv4) Transferee and Transferee’s Principals shall, as immediately following the completion of the date a foreclosure action or other exercise of such transferlender’s remedies under such loan documents, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of Borrower reaffirms the obligations of Borrower under the Loan Documents in a manner satisfactory and agrees to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified bound by the assumption agreementterms thereof. For the avoidance of doubt, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those nothing contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property this Agreement shall prohibit or be managed by Qualified Manager pursuant deemed to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): prohibit (i) among limited partners unsecured corporate credit lines and unsecured corporate credit facilities provided by an institutional lender (each, an “Unsecured Corporate Loan”) to the Guarantor or membersany direct or indirect beneficial or equity owner in Guarantor (each, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a an “Current OwnerUpper-Tier Brookfield Entity”), and (ii) unsecured Indebtedness between Upper-Tier Brookfield Entities (“Upper-Tier Brookfield Indebtedness”); provided, that, in each case (x) Borrower has no obligations or liabilities with respect to immediate family members any Unsecured Corporate Loan or Upper-Tier Brookfield Indebtedness and (which y) nothing contained herein shall be limited deemed to a spouselimit the obligations of Guarantor under the Loan Documents (including, parentwithout limitation, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection compliance with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous TransferGuarantor Net Worth Covenant).
Appears in 1 contract
Sources: Loan Agreement (Brookfield DTLA Fund Office Trust Investor Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) Without Subject to the terms of Section 5.2.10(d) below, without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (individually or collectively, a “Transfer”): ), (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any direct or indirect legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and or (B) Permitted Transfers, or (iiias permitted by Section 5.2.10(d) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentbelow.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with (i) one or a series of Transfers, of not more than ten percent (10%) Transfers of the stock, the limited partnership interests direct or non-managing membership interests (indirect equity interest in Borrower so long as the case may be) in a Restricted Party; provided, however, no Change of Control occurs provided each such Transfer shall result in be conditioned upon (A) the Change continued compliance with the relevant provisions of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal Section 4.1.30 hereof and the definition of Borrower“Special Purpose Entity” contained herein, and as a condition (B) Borrower’s ability to, after giving effect to each such Transfer, remake the representations contained herein relating to ERISA matters and the Patriot Act, OFAC and matters concerning Embargoed Persons (and, upon Lender’s request, Borrower shall deliver to Lender shall receive not an Officer’s Certificate containing such updated representations effective as of the date of the consummation of such Transfer). If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in Borrower as of the Closing Date, Borrower shall, no less than thirty (30) days prior written notice to the effective date of any such proposed Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender, or (ii) the transfer of obsolete Personal Property and/or Equipment in the ordinary course of business, so long as same is replaced with Personal Property and/or Equipment, as applicable, of similar type, quality and utility or is no longer needed in connection with the use or operation of the balance of the Property, provided that the foregoing shall in no event restrict Borrower from transferring Rents or other sums pursuant to and in compliance with the Cash Management Agreement including, without limitation, Exhibit A thereto.
(e) No consent to any assumption of the Loan shall occur on or before the first anniversary of the first Payment Date. Borrower shall pay any Thereafter, Lender reserves the right to condition the consent to Transfers required hereunder upon (a) a modification of the terms hereof, the Note, the Security Instrument or the other Loan Documents; (b) an assumption of this Agreement, the Note, the Security Instrument and the other Loan Documents, subject to the provisions of Section 9.4 hereof; (c) payment of all reasonable out-of-pocket costs of fees and expenses incurred in connection with such Transfers (including Lender’s counsel Transfer including, without limitation, the cost of any third party reports, legal fees and disbursements and any fees expenses, application fees, and expenses or required legal opinions; (d) the payment of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer an assumption fee equal to one percent (1%) of the outstanding principal balance of the Loan at and an application fee of $5,000; (e) the time delivery of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of Additional Insolvency Opinion reflecting the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner transfer satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
; (viif) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transfereethe proposed transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations continued compliance with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all of the representations and covenants set forth herein, including, without limitation, in Sections 4.1.31Section 4.1.30, 4.1.35, 5.1.23 Section 4.1.35 and Section 5.2.9 hereof; (g) the delivery of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably evidence satisfactory to Lender and that the proposed transferee is a Special Purpose Entity in accordance with the then current standards of Lender; (Bh) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior prior to any release of the Guarantor, one (1) or more a substitute guarantors guarantor reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute executed a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
; (xii) Borrower approval by Lender of the proposed transferee; or (j) such other conditions as Lender shall deliver, at determine in its sole cost and expenseabsolute discretion to be in the interest of Lender, an endorsement including, without limitation, the creditworthiness, reputation and qualifications of the transferee with respect to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property Loan and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s a Transfer that is not permitted by the terms of Section 5.2.10 without Lender’s consent. This provision shall apply to every Transfer that is not permitted by the terms of Section 5.2.10, regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's ’s prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten twenty percent (1020%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel reasonable attorneys’ fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.354.1.34, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the PropertyProperty (if applicable), which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, direct or indirect limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 thirty (30) days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Sources: Commercial Loan Agreement (Red Oak Capital Fund V, LLC)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on BorrowerA. Without Lender’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent, which consent of may be granted or withheld in Lender’s sole and absolute discretion, and except to the extent otherwise set forth in this Section 5.2.10, no Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) directly or indirectly sell, assign, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, transfer or otherwise transfer or dispose of any Property or any portion thereof or any direct or indirect legal, beneficial or equitable interest in all or any part of any Property, (ii) permit or suffer any owner, directly or indirectly, voluntarily or involuntarily, by operation of law any direct or otherwise, and whether indirect ownership or not for consideration or of record) the beneficial interest in any Property or any part thereof Borrower to transfer such interest, whether by transfer of partnership, membership, stock or any legal or other beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfersentity or otherwise, or (iii) enter into mortgage, pledge, hypothecate or otherwise encumber or permit to be encumbered or grant or permit to be granted a security interest in all or any plan part of divisionany Property or any Borrower or any direct or indirect legal beneficial or equitable interest in any Property or any Borrower. Notwithstanding anything to the contrary set forth in this Loan Agreement or any other Loan Document, transfers of direct or divide, establish indirect interests in any Borrower pursuant to any will or testament or applicable law of descent upon the death of a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any natural person that was the holder of the foregoing applicable interest in such Borrower, shall be permitted without the consent of Lender's prior written consent.
B. Notwithstanding the restrictions on transfer or encumbrance set forth in Section 7.1, Sole Member shall be permitted to obtain that certain mezzanine financing in the amount of Thirty Million and 00/100 Dollars ($30,000,000.00), made by DOF IV REIT HOLDINGS, LLC (the “Permitted Mezzanine Lender”) pursuant to the Mezzanine Loan Documents (as approved by Lender, the “Permitted Mezzanine Financing”) subject to the subordination of the Permitted Mezzanine Financing to the Secured Obligations as set forth in the Permitted Mezzanine Financing Intercreditor Agreement. Nothing in this Section 7.1(B) shall permit Borrowers or any owner of indirect or direct ownership interests in Borrowers to obtain mezzanine financing other than the Permitted Mezzanine Financing. The Permitted Mezzanine Lender (or any successor holder of the Permitted Mezzanine Financing that is permitted pursuant to the terms of the Permitted Mezzanine Financing Intercreditor Agreement) may, in accordance with the terms of the Permitted Mezzanine Financing Intercreditor Agreement, (i) foreclose upon the collateral provided as part of the Permitted Mezzanine Financing and (ii) assign or transfer any such foreclosed collateral to a “Qualified Transferee” (as defined in the Permitted Mezzanine Financing Intercreditor Agreement), and any such foreclosure, assignment or transfer, if effected in accordance with the terms of the Permitted Mezzanine Financing Intercreditor Agreement, shall not constitute a violation of the Loan Documents.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d1) Notwithstanding the provisions of this Section 5.2.107.1(A) and Section 7.1(B), and in each case provided that the Transfer Conditions (as hereinafter defined) shall be simultaneously satisfied the following transfers of direct or indirect interests in Borrower shall be permitted without Lender’s prior written consent shall not be required in connection with one (any such transfer, a “Permitted Transfer”):
(i) (x) transfers of any direct or a series of Transfers, of not more than ten percent (10%) of the stock, the indirect limited partnership interests or non-managing membership interests interest in any Upper Tier Torchlight Entity, or (as the case may bey) transfers of any indirect limited partnership or non-managing membership interest in Sole Member;
(ii) a Restricted Party; provided, however, no such Transfer shall result in the Torchlight Change of Control Event Remedy;
(iii) a Preferred Equity Redemption;
(iv) a Torchlight Corporate Event; and
(v) a TLP Conversion.
(2) For the purposes hereof, “Transfer Conditions” mean all of the following:
(i) No Default or Event of Default has occurred, provided that this subsection (i) shall not apply to a Permitted Transfer pursuant to Section 7.1(C)(ii), Section 7.1(C)(iii) and/or Section 7.1(C)(v).
(ii) Except in respect of a Restricted Party Torchlight Corporate Event or cause any Key Principal a Preferred Equity Redemption, Torch ▇▇▇▇▇▇▇ continues to no longer be a Key Principal of Borrower, Control Preferred Member and as a condition to each such all Upper Tier Torchlight Entities.
(iii) Following the proposed Permitted Transfer, each Guarantor (or any Qualified Replacement Guarantor) continues to own a direct and/or indirect interest in each Borrower.
(iv) Borrowers deliver to Lender shall receive not less than at least thirty (30) days days’ prior written notice of the proposed Permitted Transfer, together with an organizational chart illustrating the ownership structure both before and after the consummation of the proposed Permitted Transfer, which organizational chart shall set forth Borrowers’ direct and indirect upstream owners (including, without limitation, any Qualified Replacement Guarantor described in clause (x) or clause (xii) below), the percentage interests held by each such owner and the type of entity of each such owner (an “Organizational Chart”), provided however that with respect to Permitted Transfers made pursuant to Section 7.1(C)(ii), Section 7.1(C)(iii) and/or Section 7.1(C)(v), such deliveries in this subsection (iv) may be delivered to Lender simultaneously with the occurrence of such Permitted Transfer.
(v) Borrowers shall pay or reimburse Lender for all of the actual costs, fees and expenses incurred by Lender in respect of such proposed Permitted Transfer. Borrower shall pay any and all reasonable , including, without limitation, out-of-pocket costs attorneys’ fees incurred by Lender, whether or not such proposed Permitted Transfer is consummated.
(vi) Any Person to whom or to which any such direct or indirect limited partnership or non-managing membership interest is transferred shall comply with the requirements of Borrowers, Guarantors, Borrower Control Person and expenses incurred Persons that directly or indirectly Controls any Guarantor (other than any Guarantor that is an individual) set forth in Section 5.1.21 hereof, and if Lender requests, the proposed transferees and its constituent members or other owners shall execute a certificate in form and substance satisfactory to Lender confirming such compliance (except that identifying information shall not be required for any Transfers made in the ordinary course of business over a national securities exchange); provided however that in connection with a Torchlight Change of Control Event Remedy, the conditions in this subsection (vi) shall be deemed satisfied if such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of conditions have been satisfied under the Rating Agencies)Permitted Mezzanine Intercreditor Agreement.
(evii) Without limiting Lender’s discretion Such proposed Permitted Transfer does not subject Lender or any of its Affiliates to approve any civil or disapprove criminal penalties in any request for a waiver jurisdiction or otherwise constitute an unlawful act, offense or crime by Lender or any of its Affiliates, including, without limitation, under any of the prohibition against Transferslaws, regulations and executive orders described in Section 5.1.21 hereof.
(viii) Intentionally omitted.
(ix) Simultaneously with the Permitted Transfer, Borrowers shall provide Lender specifically reserves the right with (A) evidence reasonably satisfactory to condition its consent to any waiver of a prohibited Transfer upon satisfaction Lender that all of the Transfer Conditions have been satisfied with respect to such proposed Permitted Transfer and (B) a certificate signed by Borrowers and each Guarantor that (I) certifies to Lender that all of the Transfer Conditions have been satisfied with respect to such proposed Transfer, (II) attaches (x) a final Organizational Chart confirming the new ownership structure of Borrowers (certified as being true, complete and correct by Borrowers and each Guarantor), and (III) attaches (x) a copy of the documents effectuating the proposed Permitted Transfer and a copy of the Organizational Documents of the entities affected by the proposed Permitted Transfer, as amended, and (y) any other information that Lender may reasonably request.
(x) In the event that the Permitted Transfer is a Torchlight Change of Control Event Remedy, the following minimum conditionsadditional conditions shall be applicable:
1. Preferred Member shall obtain a Qualified Replacement Guarantor that satisfies the Guarantor Minimum Available Liquidity Requirement and the Guarantor Minimum Net Worth Requirement, and such Qualified Replacement Guarantor shall execute and deliver to Lender, a replacement non-recourse carveout guaranty and a replacement environmental indemnity agreement in favor of Lender, each in substantially the same form as the Non-Recourse Carveout Guaranty and the Environmental Indemnity Agreement (icollectively, the “Replacement Guaranties”) Borrower and such other instruments as Lender may reasonably require; provided that the Replacement Guaranties shall pay Lender a transfer fee equal to one percent (1%) cover only events that occur or state of affairs that exists from and after the date of the outstanding principal balance consummation by Preferred Member of the Loan at the time Torchlight Change of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred Control Event Remedy; provided however that in connection with a Torchlight Change of Control Event Remedy, the conditions in this subsection (x)(i) shall be deemed satisfied if such Transferconditions have been satisfied under the Permitted Mezzanine Intercreditor Agreement.
2. Each Property shall be managed by pursuant to a Property Management Agreement delivered to, including and approved by, Lender’s counsel fees , and disbursements with a Property Manager consented to by Lender, such consent not to be unreasonably withheld, conditioned or delayed, and all recording fees, title insurance premiums and mortgage and intangible taxes;otherwise in accordance with Section 5.1.11 hereof.
(iiiA) The proposed transferee Simultaneously with the exercise of the Torchlight Change of Control Event Remedy, Preferred Member shall provide to Lender (1) written notice of the “Transferee”) Torchlight Change of Control Event and certificate that is signed by an authorized officer of Preferred Member certifying to Lender that all of the Transfer Conditions have been satisfied or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation will be satisfied prior to consummating the Torchlight Change of Control Event Remedy (other than conditions that are subject to the Property, approval of Lender and for which expertise shall be Lender has received all reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, requested back-up information as of the date of such transferOfficer’s Certificate), such certificate to include, without limitation, the following: (I) a reasonably detailed description of the Torchlight Change of Control Event would permit Preferred Member to commence the Torchlight Change of Control Event Remedy pursuant to the Sole Member Operating Agreement, (II) an Organizational Chart illustrating the ownership structure of both (x) Borrowers and (y) each of the Preferred Member and Upper Tier Torchlight Entities and Torch ▇▇▇▇▇▇▇, both before and after the consummation of the proposed Torchlight Change of Control Event Remedy, which Organizational Chart shall set forth the direct and indirect upstream owners (including, without limitation, any Qualified Replacement Guarantor) of Borrowers, and each of the Preferred Member and Upper Tier Torchlight Entities and Torch ▇▇▇▇▇▇▇, the percentage interests held by each such owner and the type of entity of each such owner, and (2) copies of any and all material notices, pleadings, agreements, motions and briefs served upon, delivered to or with any party in connection with the Torchlight Change of Control Event, (B) Preferred Member shall otherwise keep Lender reasonably apprised as to the status of the Torchlight Change of Control Event, and (C) Lender shall have received all other information and documents reasonably requested by such party confirming the conditions concerning the events under the Sole Member Operating Agreement that are the basis for the Torchlight Change of Control Event that are reasonably requested by Lender. Lender may request reasonable evidence that the requirements of this Section 7.1(C)(x) have been satisfied, and Preferred Member shall provide such evidence within five (5) Business Days following such request. In addition, not less than ten (10) Business Days following the consummation of such Torchlight Change of Control Event Remedy, Preferred Member shall deliver to Lender (I) an aggregate net worth Officer’s Certificate certifying that (x) such Torchlight Change of Control Event Remedy was consummated in accordance with provisions of this Agreement, including, without limitation, the Transfer Conditions and liquidity that the Organizational Chart and other documents and items included as part of the certificate delivered to Lender prior to the consummation of such Torchlight Change of Control Event Remedy as required by this Section 7.1(C)(x) remain true, complete and correct and (II) such other additional information that Lender may reasonably request to evidence that the Torchlight Change of Control Event Remedy was in fact made in accordance with this Agreement.
4. Within ten (10) days following the exercise of the Torchlight Change of Control Event Remedy, Preferred Member shall deliver to Lender a substantive non-consolidation opinion prepared by legal counsel reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) For the avoidance of doubt, a Preferred Equity Redemption that is consummated in accordance with the provisions of this Section 7.1(C) shall be permitted, provided, however, for further clarification, the membership interests of Preferred Member that are redeemed may not be transferred to any Person other than Sole Member and no other transfers of any direct or indirect interests in Borrower shall deliverbe permitted in connection with such Preferred Equity Redemption.
(xii) In the event that the Permitted Transfer is a Torchlight Corporate Event, at its sole cost the following additional conditions shall be applicable:
1. An Approved Real Estate Company Controls and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner owns not less than fifty-one percent (51%) of the Propertydirect and/or indirect ownership interests in Preferred Member.
2. Preferred Member shall obtain a Qualified Replacement Guarantor that satisfies the Guarantor Minimum Available Liquidity Requirement and the Guarantor Minimum Net Worth Requirement, which endorsement and such Qualified Replacement Guarantor shall insure that, execute and deliver to Lender Replacement Guaranties and such other instruments as Lender may reasonably require; provided that the Replacement Guaranties shall cover only events that occur or state of affairs that exists from and after the date of the recording consummation of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;Torchlight Corporate Event.
(xii) If applicable, the 3. Each Property shall be managed by Qualified Manager pursuant to a Replacement Property Management Agreement; andAgreement delivered to, and approved by, Lender, and with a Property Manager consented to by Lender, such consent not to be unreasonably withheld, conditioned or delayed, and otherwise in accordance with Section 5.1.11.
(xiii) The Property meets all 4. Each of the Lender’s underwriting standards related certificates required to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in be executed and/or delivered pursuant to this Section 5.2.10 to the contrary, limited partnership or membership interests7.1(C) by Borrower and/or Guarantors shall also be executed and/or delivered, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of by such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous TransferApproved Real Estate Company.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty (collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent5.1.20.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent none of the following transfers shall not be required deemed to be a Transfer: (i) the sale or transfer, in connection with one or a series of Transferstransactions, of not more than ten forty-nine percent (1049%) of the stockstock in a Restricted Party; provided, however, no such sales or transfers shall result in the change of voting control in the Restricted Party, and as a condition to each such sale or transfer, Lender shall receive not less than thirty (30) days prior notice of such proposed sale or transfer, (ii) the sale or transfer, in one or a series of transactions, of not more than forty-nine percent (49%) of the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer sales or transfers shall result in the Change change of Control voting control in a the Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfersale or transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfersale or transfer, (iii) the sale, transfer or issuance of stock in Cousins Properties Incorporated (the “Traded Entity”) provided such stock is listed on the New York Stock Exchange or such other nationally recognized stock exchange, and (iv) the transfer contemplated by Section 10.24 hereof. In addition, at all times, the Traded Entity must continue to control Borrower and Affiliated Manager and own, directly or indirectly, at least a 51% interest in Borrower and Affiliated Manager.
(e) Except for the assumption contemplated by Section 10.24 of this Agreement, which is being consummated on or about the date hereof, no further assumption of the Loan shall pay occur on or before the first anniversary of the first Payment Date. Thereafter, Lender reserves the right to consent to any subsequent assumption, and Lender may condition the consent required hereunder upon (a) intentionally omitted; (b) an assumption of this Agreement, the Note, the Security Instrument and the other Loan Documents as so modified by the proposed transferee, subject to the provisions of Section 9.4 hereof; (c) payment of all reasonable out-of-pocket costs of the fees and expenses incurred in connection with such Transfers (including Lender’s counsel Transfer including, without limitation, the cost of any third party reports, legal fees and disbursements and any expenses, Rating Agency fees and expenses of or required legal opinions; (d) the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver payment of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer non-refundable $5,000 application fee and an assumption fee equal to one quarter of one percent (10.25%) of the outstanding principal balance of the Loan at for each Transfer following the time first Transfer after the assumption contemplated by Section 10.24 of such transfer;
this Agreement; (iie) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as delivery of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of a nonconsolidation opinion reflecting the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner transfer satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
; (viif) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transfereethe proposed transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations continued compliance with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 Section 4.1.30 and Section 5.2.9 hereof; (g) the delivery of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably evidence satisfactory to Lender that the single purpose nature and (B) all certificatesbankruptcy remoteness of Borrower, agreementsits shareholders, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicablethe case may be, following such transfers are in accordance with the then current standards of Borrower who are limited partners Lender and the Rating Agencies; (h) intentionally omitted; (i) if required by Lender, confirmation in writing from the Rating Agencies to the effect that such transfer will not result in a re-qualification, reduction or members, as applicable, of Borrower as withdrawal of the date then current rating assigned to the Securities or any class thereof in any applicable Securitization; or (j) such other conditions as Lender shall determine in its reasonable discretion to be in the interest of this Agreement (each a “Current Owner”)Lender, including, without limitation, the creditworthiness, reputation and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each qualifications of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior transferee with respect to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of Loan and the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereofProperty. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s a Transfer without Lender’s consent. This provision shall apply to every Transfer (other than transfers that are deemed not a Transfer pursuant to Subsection 5.2.10(d) above), regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer. Notwithstanding the foregoing, in connection with an Intercompany Transfer, Lender shall not require (i) payment of the assumption fee contemplated by subsection (d) hereof and (ii) the creditworthiness, reputation and qualifications of a transferee in connection with an Intercompany Transfer shall be deemed to be acceptable to Lender so long as the Traded Entity Controls such transferee and owns, directly or indirectly, at least 51% of the ownership interests of such transferee.
(f) If as a result of any direct or indirect Transfers of interests in Borrower or any Principal (regardless of whether Lender’s consent is required in connection therewith) more than forty-nine percent (49%) in the aggregate of direct or indirect interests in Borrower or Principal is owned by any Person that owned less than a forty-nine percent (49%) direct or indirect interest in Borrower or Principal as of the Closing Date, Lender shall, as a condition to such Transfer receive a nonconsolidation opinion acceptable to it and the Rating Agencies.
(g) Anything contained in Section 5.2.10 to the contrary notwithstanding, the Traded Entity shall be permitted, without the consent of Lender, to Transfer its direct and indirect ownership interests in Borrower (but Traded Entity shall not cause or permit Borrower to Transfer the Property) in connection with a merger, consolidation or sale of all or substantially all of the assets of Traded Entity (a “Sale Event”), subject to the following conditions: (i) such Sale Event shall occur as a single transaction and if such Sale Event shall be a sale of substantially all of the Traded Entity’s assets, such merger, consolidation or sale shall be to a single Person, (ii) the Property shall be managed by a Qualified Manager, (iii) Borrower shall deliver an Additional Insolvency Opinion in connection with such Sale Event, (iv) Borrower shall pay all of Lender’s fees and expenses incurred in connection with such Sale Event, (v) the payment of a non-refundable $5,000 application fee and an assumption fee equal to one quarter of one percent (0.25%) of the outstanding principal balance of the Loan for each Transfer following the first Transfer after the assumption contemplated by Section 10.24 of this Agreement, (vi) the proposed transferee’s continued compliance with the representations and covenants set forth in Section 5.2.9 hereof, (vii) if permitted by law, Lender shall receive not less than thirty (30) days prior notice of such Sale Event and (viii) Borrower shall deliver to Lender confirmation in writing from the Rating Agencies to the effect that such Sale Event will not result in a re-qualification, reduction or withdrawal of the then current rating assigned to the Securities or any class thereof in any applicable Securitization.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Individual Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty (collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, the disposition of equipment and other personal property pursuant to the replacement thereof or (iii) enter into any plan otherwise in the ordinary course of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any operation of the foregoing without Lender's prior written consentProperties.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the an Individual Property or any part thereof for a price to be paid in installments; (ii) with the exception of the Operating Lease, an agreement by Borrower leasing all or a substantial part of the an Individual Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s or Operating Lessee’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following transfers shall not be required deemed to be a Transfer: (i) the Sale or Pledge, in connection with one or a series of Transferstransactions, of not more than ten forty-nine percent (1049%) of the stockstock in a Restricted Party or other beneficial interest, and (ii) the Sale or Pledge, in one or a series of transactions, of not more than forty-nine percent (49%) of the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, in the case of each of the foregoing (i) and (ii), (A) no such Transfer sales or transfers shall result in the Change change of Control voting control in a the Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and (B) as a condition to each such Transfersale or transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. sale or transfer, (C) if after giving effect to any such Sale or Pledge, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall pay deliver to Lender an Additional Insolvency Opinion acceptable to Lender and the Rating Agencies, (D) no such Sale or Pledge of any direct ownership interests in Borrower, Principal or Operating Lessee shall be permitted, and (E) Borrower, Principal and Operating Lessee shall each continue to be a Special Purpose Entity following such Sale or Pledge. In addition, at all reasonable out-of-pocket costs times, Guarantor must continue to control Borrower, Principal, Operating Lessee, and expenses incurred any Affiliated Manager and own, directly or indirectly, at least a one hundred percent (100%) interest in Borrower, Operating Lessee, Principal and Affiliated Manager. Lender’s consent or approval shall not be required with respect to (I) the trading or issuance of shares or other securities of Highland Hospitality Corporation on a nationally recognized stock exchange, or (II) the transfer, sale or issuance of operating partnership units or other securities of Guarantor to a Qualified Transferee, provided that such Qualified Transferee or Highland Hospitality Corporation controls Guarantor and owns not less than a thirty percent (30%) interest in Guarantor, or (III) the transfer, sale or issuance of operating partnership units of Guarantor in connection with the merger, reorganization or consolidation of Highland Hospitality Corporation or Guarantor, provided that the surviving entity is a publicly listed company on a nationally recognized exchange and such Transfers entity has a net worth greater than the net worth of Highland Hospitality Corporation immediately before such merger, reorganization or consolidation, provided further, that with respect to (including Lender’s counsel fees II) and disbursements (III), (x) as a condition to each such transfer, sale or issuance, Lender shall receive not less than fifteen (15) days prior notice of such proposed transfer, sale or issuance, and (y) if after giving effect to any fees such transfer, sale or issuance, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and expenses its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion acceptable to Lender and the Rating Agencies).
(e) Without limiting Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon a Transfer without Lender’s discretion consent. This provision shall apply to approve every Transfer regardless of whether voluntary or disapprove not, or whether or not Lender has consented to any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its previous Transfer.
(f) No consent to any waiver of a prohibited Transfer upon satisfaction assumption of the Loan shall occur on or before the first (1st) anniversary of the first (1st) Payment Date. Thereafter, Lender’s consent to a one (1) time Transfer of the Properties shall not be unreasonably withheld provided that Lender receives sixty (60) days prior written notice of such Transfer and no Event of Default has occurred and is continuing, and further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower the proposed transferee (“Transferee”) shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxesbe a Qualified Transferee;
(iii) The proposed transferee (if the “Transferee”) or Transferee’s Principals Manager shall not be the manager of the Properties following such transfer, then the Manager must have demonstrated expertise in owning and operating properties similar in location, size, class and operation be a Qualified Manager pursuant to the Property, which expertise shall be reasonably determined by Lendera Replacement Management Agreement;
(iv) Transferee if required by Lender, delivery of confirmation in writing from each Rating Agency to the effect that such transfer and Transferee’s Principals shall, as assumption of the date Loan will not result in a reduction, downgrade, withdrawal or qualification of the ratings in effect immediately prior to such transfer, have an aggregate net worth and liquidity acceptable to Lenderproposed transfer for the Securities or any class thereof which then are outstanding;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory have executed and delivered to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory reasonably acceptable to Lender, evidencing such Transferee’s agreement to abide and be bound by the terms of this Agreement (including, without limitation, Sections 4.1.30 and 5.2.9 hereof), the Note, the Mortgages and the other Loan Documents, as applicable, together with such legal opinions as may be reasonably requested by Lender;
(viivi) There Lender shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) received an Additional Insolvency Opinion covering the Transferee and Transferee’s Principals must be able such other persons reasonably required by Lender and the Rating Agencies, such Additional Insolvency Opinion to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lenderthe Rating Agencies;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xivii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance PolicyPolicies, as modified by the assumption agreement, as a valid first lien on the Property Properties and naming the Transferee as owner of the PropertyProperties, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property Properties shall not be subject to any additional exceptions or liens other than those contained in the relevant Title Insurance Policy Policies issued on the date hereof Closing Date and the Permitted EncumbrancesEncumbrances relating thereto;
(xiiviii) If applicablethe delivery of evidence satisfactory to Lender that the single purpose nature and bankruptcy remoteness of Borrower, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial conditionshareholders, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicablethe case may be, following such Transfer is in accordance with the then current standards of Borrower who are limited partners or membersLender and the Rating Agencies;
(ix) prior to any release of Guarantor, as applicable, of Borrower as a substitute guarantor reasonably acceptable to Lender shall have assumed all of the date liabilities and obligations of this Agreement Guarantor under the Guaranty and the Environmental Indemnity executed by Guarantor or executed a replacement guaranty and environmental reasonably satisfactory to Lender; and
(each a “Current Owner”), and (iix) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), payment of any Current Owner or to trusts formed for the benefit all of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs fees and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses reasonably incurred by or on behalf of Lender in connection with the Additional Permitted Transfersuch Transfer including, whether or not consummated; (F) once the Additional Permitted Transfer is completewithout limitation, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies cost of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; required third party reports, reasonable legal fees and (H) Borrower shall have delivered satisfactory evidence to Lender thatexpenses, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary out-of-pocket expenses, recording fees, title insurance premiums, mortgage and intangible taxes, Rating Agency fees and expenses or not, or whether or not Lender has consented to any previous Transferrequired legal opinions.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender L▇▇▇▇▇ has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on BorrowerB▇▇▇▇▇▇▇’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender L▇▇▇▇▇ has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in during the repayment continuance of the Debt or the performance an Event of the Other ObligationsDefault, Lender can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of LenderL▇▇▇▇▇, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Individual Property or any part thereof or any legal or beneficial interest therein or therein, (ii) enter into any interest of Borrower in the PACE Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (iiiii) permit a Sale or Pledge of an interest in any Restricted Party, other than (each of the following, a “Permitted Transfer”) (A) the Distribution (and any Transfers effectuated in connection therewith as disclosed to Lender in writing prior to closing), (B) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 5.1.20, (C) Permitted Equity Transfers; provided, that any waiver or amendment by Guarantor of the 9.8% ownership limitation set forth in the Guarantor’s declaration of trust shall require L▇▇▇▇▇’s prior written consent to the extent that both (I) an Ownership Change Limitation would reasonably be expected to exist immediately following a Transfer of the maximum interest in Guarantor permitted by such waiver or amendment, and (BII) such Transfer would reasonably be expected to increase the percentage ownership of 5% shareholders of Mezzanine Borrower (including any “public group” as defined in Section 1.382-2T(f)(13) of the Treasury regulations treated as such) for purposes of determining whether there is an Ownership Change Limitation (provided that, for purposes of (II), Borrower shall be entitled to rely upon reasonably available information, including the Securities and Exchange Commission Schedules 13D and 13G of Guarantor and any information or representations obtained in connection with the granting of such a waiver or amendment, in determining whether any Transfer is reasonably expected to increase the percentage ownership of such 5% shareholders), (D) a Mezzanine Change of Control Event or any other exercise of remedies by Mezzanine Lender under the Mezzanine Loan (including a foreclosure of the Pledge Agreement (as defined in the Mezzanine Loan Agreement) or an assignment in lieu thereof), (E) the exercise of remedies by Lender under the Loan Documents (including a foreclosure of the Mortgage or any Pledge Agreement or an assignment or conveyance in lieu thereof), (F) a Condemnation, (G) the acquisition by Borrower of fee title to any PILOT Property in accordance with the terms and conditions of the applicable PILOT Lease and this Agreement, (H) the acquisition by Borrower of fee title to any Ground Lease Property in accordance with the terms and conditions of the applicable Ground Lease and this Agreement, (I) Permitted TransfersEncumbrances, or and (iiiJ) enter into any plan Transfers of division, or divide, establish Individual Properties in connection with a protected series, create a new registered series, or convert release pursuant to another form Section 2.5.2 of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentthis Agreement.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property one or more Individual Properties or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, BorrowerB▇▇▇▇▇▇▇’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, Division, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger merger, Division or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger merger, Division or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereofinterest.
(d) Notwithstanding the provisions of this Section 5.2.10If after giving effect to any Permitted Equity Transfer, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) in the aggregate of direct or indirect interests in Mezzanine Member are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in Mezzanine Member as of the stockClosing Date, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, howeverBorrower shall, no less than ten (10) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender. To the extent that any Transfer shall will result in the Change transferee (either itself or collectively with its Affiliates) owning a 10% or greater equity interest (indirectly) in Borrower, L▇▇▇▇▇’s receipt of Control in a Restricted Party or cause any Key Principal to no longer the Satisfactory Search Results, at Borrower’s cost and expense, shall be a Key Principal condition precedent to such Transfer. For clarity, other than a Permitted REIT / TRS Transfer or a Permitted REIT Preferred Interest Transfer (which such Permitted REIT Preferred Interest Transfer shall require prior written notice to Lender), Borrower shall not cause, permit or suffer any Transfers of the direct interests in any Individual Borrower, Subsidiary REIT, Mezzanine Borrower, Pledgor, Holdco or TRS without Lender’s prior written consent, which consent may be granted or withheld in Lender’s sole discretion.
(e) Any Permitted REIT / TRS Transfer shall be subject to, and as a condition to each such Transferconditioned upon, satisfaction of the following conditions:
(i) No Event of Default shall have occurred and be continuing;
(ii) Borrower shall provide Lender shall receive with written notice not less later than thirty ten (3010) Business Days and not earlier than one hundred twenty (120) days prior written notice to the date of the proposed Transfer or the effective date of the applicable election described in Section 5.1.25 hereof; and
(iii) Borrower shall have delivered (i) (x) an amendment to the applicable Pledge Agreement in form and substance reasonably satisfactory to Lender or an additional pledge and security agreement granting Lender a first priority security interest in 100% of the common equity interests any new TRS Subsidiary or Subsidiary REIT and (y) a pledge and security agreement from the TRS Subsidiary or Subsidiary REIT, as applicable, granting Lender a first priority security interest in the Individual Borrowers held by such TRS Subsidiary or Subsidiary REIT, as applicable, in each case, in substantially the same form as the Pledge Agreements entered into on the Closing Date and (ii) upon request from Lender, an opinion letter from R▇▇▇ ▇▇▇▇▇ LLP or another counsel reasonably satisfactory to Lender opining as to the enforceability of such proposed Transfer. amendment(s) or pledge agreement(s) and other customary matters consistent with the corresponding opinions delivered on the Closing Date with respect to the Pledge Agreements, in form and substance reasonably acceptable to Lender; and
(iv) Borrower shall pay any and all reasonable of Lender’s reasonable, out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of Transfer or the obligations of Borrower under the Loan Documents applicable election described in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operationSection 5.1.25 hereof.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon BorrowerB▇▇▇▇▇▇▇’s Transfer without LenderL▇▇▇▇▇’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Sources: Loan Agreement (W. P. Carey Inc.)
Transfers. (a) Borrower acknowledges Borrowers acknowledge that Lender has examined and relied on the experience of Borrower Borrowers and its stockholders, their general partners, members, Key Principals principals and (if any Borrower is a trust) beneficial owners owners, as applicable, in owning and operating properties such as the Property Properties and in owning intellectual property such as the IP, in agreeing to make the Loan, and will continue to rely on Borrower’s Borrowers’ ownership and control of the Property Properties and the IP as a means of maintaining the value of the Property Properties and the IP as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges Borrowers acknowledge that Lender has a valid interest in maintaining the value of the Property Properties and the IP so as to ensure that, should Borrower Borrowers default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) Properties and the IP. Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower Borrowers shall not, and shall not permit any Transfer Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, license, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Property or any part thereof or any legal or beneficial interest therein or any IP or any part thereof or any legal or beneficial interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an any interest in any Transfer Restricted PartyParty (any of the actions in the foregoing clauses (i) or (ii), a “Transfer”), other than than, notwithstanding anything to the contrary contained in this Section 5.2.10, (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and hereof, including, without limitation, the HRHI Lease, (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporationRelease Parcel Sale, any merger, consolidation or Adjacent Parcel Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venturean IP Sale, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than each instance in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the applicable provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Collateral in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent Except in connection with a release of Lender, and except an Individual Property or an Out Parcel pursuant to the extent otherwise terms and conditions set forth in this Sections 2.5 and 2.9 hereof or the substitution of an Individual Property pursuant to the terms and conditions set forth in Section 5.2.102.8 or the permissible easements provided for in Section 2.10 of the Mortgage Loan Agreement, Borrower shall not, and shall not permit any Restricted Party Senior Mezzanine Borrower, Mortgage Borrower or Baltimore Owner, to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the ), any Senior Mezzanine Collateral, Collateral or Individual Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty (collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 hereof and encumbrances described in Section 5.2.10(d)(vi) below, without (i) the prior written consent of Lender and (Bii) Permitted Transfersif a Securitization has occurred or is pending within thirty (30) days, delivery to Lender of written confirmation from the Rating Agencies that the Transfer will not result in the downgrade, withdrawal or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any qualification of the foregoing without Lender's prior written consentthen current ratings assigned to any Securities or the proposed rating of any Securities.
(c) A Transfer shall include include, but not be limited to: (i) an installment sales agreement wherein any Individual Borrower agrees to sell the Property Collateral or any part thereof or any Senior Mezzanine Borrower agrees to sell the Senior Mezzanine Collateral, or any part thereof, or Mortgage Borrower or Baltimore Owner agrees to sell the Properties, or any part therefor, in each case for a price to be paid in installments; (ii) an agreement by Borrower, Mortgage Borrower and/or Baltimore Owner leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s its respective right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest interests or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10Sections 5.2.10(a), Lender’s consent (b) and (c) hereof, the following transfers shall not be required deemed a Transfer: (i) a transfer by devise or descent or by operation of law upon the death of a member, partner or shareholder of a Restricted Party; (ii) the Sale or Pledge, in connection with one or a series of Transferstransactions, of not more than ten forty-nine percent (1049%) of the stock, general partnership interest or managing membership interest (as the case may be) in a Restricted Party; provided, however, no such transfers shall result in the change of voting control in the Restricted Party, and as a condition to each such transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed transfer, (iii) the Sale or Pledge, in one or a series of transactions, of not more than forty-nine percent (49%) of the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfertransfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. transfer, (iv) transfers, issuances, pledges and redemptions of stock in Wyndham, so long as (A) Wyndham (or its successor) is (or is Controlled by) a Public Company and (B) the surviving entity is primarily involved in, or has a significant business line involving, the ownership and operation of real estate similar to the Properties, (v) the merger or consolidation of Wyndham, provided that the surviving entity of such merger or consolidation is (or is Controlled by) (A) a Public Company, and (B) primarily involved in, or has a significant business line involving, the ownership or operation of real estate similar to the Properties, (vi) the granting of easements, cross-easements, agreements, restrictions, reservations and rights in the ordinary course of business for use, access, water and sewer lines, telephone and telegraph lines, electric lines or other utilities or for other similar purposes, provided that no such easements, agreements, restrictions or rights shall materially impair the utility and/or operation of any Individual Property or any Individual Borrower’s ability to repay the Debt as it becomes due, (vii) transfers of direct or indirect interests in any Mortgage Borrower, Mortgage Principal, Senior Mezzanine Borrower, Baltimore Owner or Individual Borrower shall pay any and all reasonable outto Affiliates of Wyndham (or its successor) provided that after such transfers (A) Wyndham (or its permitted successor) owns, directly or indirectly, not less than fifty-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (151%) of the outstanding principal balance of the Loan at the time of legal and beneficial ownership interests in such transfer;
(ii) Individual Borrower, Senior Mezzanine Borrower, Mortgage Principal, Mortgage Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender Baltimore Owner and (B) all certificatessuch Individual Borrower, agreementsMortgage Principal, covenants Mortgage Borrower, Senior Mezzanine Borrower and legal opinions reasonably required Baltimore Owner are Controlled, directly or indirectly, by Lender;
Wyndham (or its permitted successor), (viii) pledges of direct and indirect interests in any Borrower, Mortgage Principal, Mortgage Borrower, Baltimore Owner and any Mezzanine Borrower to any Mezzanine Lender as collateral for a Mezzanine Loan and the exercise by any Mezzanine Lender of its remedies under the Mezzanine Loan Documents, (ix) a conversion of Wyndham’s preferred stock to common stock and/or the conversion of Wyndham to a real estate investment trust and (x) Prior the recapitalization of Wyndham and the related transactions contemplated by the Recapitalization and Merger Agreement dated as of April 14, 2005 by and among Wyndham International, Inc., WI Merger Sub, Inc., Apollo Investment Fund IV L.P., AIF/THL PAH LLC, BCP Voting Trust, as Trustee for the Beacon Partners Voting Trust, ▇▇▇▇▇▇ ▇. ▇▇▇ Equity Fund IV, L.P., ▇▇▇▇▇▇ ▇. ▇▇▇ Foreign Fund IV, L.P. and ▇▇▇▇▇▇ ▇. ▇▇▇ Foreign Fund IV-B, L.P., as the same may be amended, restated, supplemented or otherwise modified from time to any release of Guarantor, one time (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities “Recap Agreement”). In addition (but not including and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement in addition to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property mergers and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager consolidations pursuant to the Recap Agreement) on a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial conditionone time basis, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision Wyndham may merge or consolidate with a public or private entity or engage in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth a transaction described in Section 5.2.10(e)(i): (i5.2.10(d)(iv) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of above in which the date of this Agreement (each a “Current Owner”)surviving entity is not, and (ii) to immediate family members (which shall be limited to is not Controlled by, a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), Public Company provided each of the following conditions is satisfied: that (A) no Default after such merger, consolidation, or Event of Default has occurred and is continuing; (BSale or Pledge described in Section 5.2.10(d)(iv) Lender has received each Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is completeSenior Mezzanine Borrower, the persons with Control of Mortgage Principal, Mortgage Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower Baltimore Owner shall continue to comply with the terms of Section 4.1.30 hereof, (B) such merger or consolidation or Sale or Pledge is to a Qualified Transferee or to a Person Controlled by a Qualified Transferee which Qualified Transferee shall Control and own directly or indirectly, not less than 50% of the direct or indirect legal and beneficial ownership interests of each Individual Borrower and Baltimore Owner, and (C) the surviving entity is primarily involved in, or has a significant business line involving, the ownership and operation of real estate similar to the Properties. Furthermore, notwithstanding the provisions of Sections 5.2.10(a), (b) and (c) hereof, in the event that an entity, which is an indirect owner of a Minority Interest Borrower and which is not a Principal (as such term is defined in the Senior Mezzanine Loan Agreement or the Mortgage Loan Agreement, as the context requires) of any Senior Mezzanine Borrower, Mortgage Borrower or Baltimore Owner, forms a subsidiary to acquire an asset and thereafter redeems the interests of one or more minority interest holders of such indirect owner (which redeemed minority interest holders shall not be Affiliates of Guarantor) by transferring all or a portion of the direct legal and beneficial interests in such newly formed subsidiary to such minority interest holders (or their designees), such formation, redemption and transfer shall not constitute a Transfer and, subject to compliance with the immediately following sentence, shall not otherwise be a violation of the terms of this Agreement or require Lender’s consent. Notwithstanding anything to the contrary contained in this Agreement, no sale, pledge or other transfer shall be permitted of any direct (as opposed to indirect) interests in any entity in which any Individual Borrower, Mortgage Principal, Senior Mezzanine Borrower, Mortgage Borrower or Baltimore Owner owns a direct or indirect interest except pursuant to Section 4.1.31 5.2.10(f). In connection with any transfer or merger permitted under this Section 5.2.10, Borrower shall deliver an Additional Insolvency Opinion if, after such transfer or merger, more than forty-nine percent (49%) of any direct legal or beneficial interest in any Individual Borrower, Mortgage Principal, Senior Mezzanine Borrower, Mortgage Borrower or Baltimore Owner, as the case may be (or in any constituent entity of any Individual Borrower, Mortgage Principal, Senior Mezzanine Borrower, Mortgage Borrower or Baltimore Owner that is required to comply with the terms of Section 4.1.30 hereof), is owned by a new or successor entity. Such Additional Insolvency Opinion shall be reasonably acceptable to (I) Lender, prior to a Securitization or (II) the Rating Agencies, if a Securitization has occurred. Notwithstanding anything to the contrary contained herein, pledges and hypothecations of indirect equity interests in any Individual Borrower, Mortgage Principal, Senior Mezzanine Borrower, Mortgage Borrower or Baltimore Owner shall be permitted provided (A) Wyndham (or its permitted successors) maintains Control of, and owns, directly or indirectly, not less than fifty-one percent (51%) of the legal and beneficial ownership interests in such Individual Borrower, Mortgage Principal, Senior Mezzanine Borrower, Mortgage Borrower or Baltimore Owner, as the case may be, and (B) any such pledges or hypothecations are in connection with the corporate credit facilities of Wyndham (or its permitted successors) and JPMorgan Chase Bank, N.A., as administrative agent, and Bear ▇▇▇▇▇▇▇ Corporate Lending Inc., as syndication agent, and the lenders party to that certain First-Lien Credit Agreement dated as of the date hereof, and JPMorgan Chase Bank, N.A., as administrative agent, and Bear ▇▇▇▇▇▇▇ Corporate Lending Inc., as syndication agent, and the lenders party to that certain Second-Lien Credit Agreement dated as of the date hereof, as amended, or another credit agreement with an institutional lender or a public bond offering to prepay or refinance in full or in part any such credit facility which an institutional lender or bondholders (or the trustee on their behalf), as applicable, shall be making or holding a loan to Wyndham (or its permitted successors) or its Affiliates (other than any Individual Borrower or its general partner or managing member). A foreclosure sale (or transfer in lieu thereof) of any such pledge or hypothecation to JPMorgan Chase Bank, N.A., or another institutional lender as collateral agent for syndicate lenders or another institutional lender, or the bond trustee, shall be permitted provided (1) Lender is given at least sixty (60) days prior written notice of the proposed foreclosure sale or transfer in lieu thereof; (2) the transferee is a reputable entity or person, creditworthy, with sufficient financial worth considering any obligations assumed and undertaken with respect to the Loan, as evidenced by financial statements and other information reasonably requested by Lender; (3) the Properties at all times shall continue to be managed by a Qualified Manager, and (4) and any and all such entities will comply with all of the requirements set forth in the Note, this Agreement, the Mortgages and the other Loan Documents.
(e) Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s a Transfer without Lender’s consentconsent to the extent required hereunder. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer. Notwithstanding anything to the contrary contained in this Section 5.2.10, (i) no transfer (whether or not such transfer shall constitute a Transfer) shall be made to any Prohibited Person and (ii) in the event any transfer (whether or not such transfer shall constitute a Transfer) results in any Person owning in excess of forty-nine percent (49%) of the ownership interest in a Restricted Party, Borrower shall, prior to such transfer, deliver an updated Insolvency Opinion to Lender, which opinion shall be in form, scope and substance reasonably acceptable in all respects to Lender and the Rating Agencies.
(f) Notwithstanding anything to the contrary contained in this Section 5.2.10, Lender shall not withhold its consent to a one-time sale, assignment, or other transfer of all of the Properties and of the Collateral provided that (i) Lender receives thirty (30) days prior written notice of such transfer, (ii) no Event of Default has occurred and is continuing and (iii) upon the satisfaction (in the reasonable determination of Lender) of the following matters:
(A) Mortgage Borrower (or Baltimore Owner, as the case may be) or Transferee shall pay any and all reasonable out-of-pocket costs incurred in connection with the transfer (including, without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes);
(B) The proposed transferee (the “Transferee”) shall be one or more special purpose bankruptcy remote entities, each of which (i) complies with all of the requirements of Section 4.1.30 hereof and whose organizational documents are substantially similar to Mortgage Borrower’s and Baltimore Owner’s organiza
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Wyndham International Inc)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is Except for a trust) beneficial owners in owning and operating properties such Permitted Transfer as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth expressly provided in this Section 5.2.104.2 or Section 4.26 hereof, Borrower shall not, and shall not permit or cause any Restricted Party to do any of the following (collectivelySC Affiliate to, a “Transfer”): (i) directly or indirectly, sell, assign, convey, mortgage, grantpledge, bargainhypothecate, encumber, pledgegrant a security interest in, assignexchange or otherwise dispose of, or grant options any option or warrant with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) record (each of the Property foregoing being herein referred to and constituting a "Transfer"), all or any part of the Premises or the Shopping Centers, or any part thereof or any interest therein, or any of the revenues to be earned therefrom, or suffer, consent to or permit the foregoing, without, in each instance, the prior written consent of Lender which may be granted or withheld in Lender's sole discretion. Except for a Permitted Transfer, Borrower shall not permit any owner, directly or indirectly, of a legal or beneficial interest therein in Borrower or any SC Affiliate to Transfer such interest, either of record or beneficially, whether by Transfer of stock, assignment of partnership or membership interest or other Transfer of legal or beneficial interest in Borrower or any SC Affiliate, or in any direct or indirect owner thereof, or otherwise permit any new or additional legal or beneficial ownership interests in Borrower or any SC Affiliate or any direct or indirect owner to be issued, without, in each instance, the prior written consent of Lender which may be granted or withheld in Lender's sole discretion.
(b) To the extent that Lender elects to consent to any Transfer as to which its consent is required hereunder, Lender shall be entitled to condition its consent on such matters as Lender may elect, in its sole discretion, including, without limitation, execution of instruments of assignment and assumption with respect to the Loan Documents and the Collateral therefor, payment of a transfer fee or other consideration, delivery of certificates and affidavits and indemnities, including an affidavit and indemnification in respect of Code Sections 1445 and 7701, agreements restricting actions which may or may not be taken by any transferee or its owners or restrictions in any such Person's Organizational Documents with respect thereto, additional or replacement security for the Loan, restrictions as to the use of any consideration paid for such Transfer, and opinions, including without limitation, opinions regarding the assumptions of obligations hereunder, substantive consolidation and such other matters as Lender may reasonably require. Within three (3) Business Days after the closing of any Transfer, whether or not such Transfer required Lender's consent, if (i) the Premises, the Shopping Centers or any part thereof or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) therein or (ii) permit a Sale any direct or Pledge of an indirect ownership interest in Borrower or any Restricted PartySC Affiliate is transferred, other than (A) pursuant to Leases Borrower shall provide Lender with a copy of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business deed or other entity or instrument of Transfer to any transferee. Borrower shall promptly after request therefor provide in its operating agreement for any Lender with such other information and documentation with respect to such Transfer as Lender shall reasonably request, including, without limitation, information as to the ownership of the foregoing without Lender's prior written consentsuch transferee.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell Upon the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest occurrence of any general partner or any profits or proceeds relating to such partnership interestTransfer, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.104.2 shall continue to apply to such transferee (including, Lender’s consent shall not be required in connection with one or a series of Transferswithout limitation, of not more than ten percent (10%any Permitted Transferee) of as if it were the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrowertransferor hereunder, and as any consent by Lender permitting a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a transaction otherwise prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency actunder this Section 4.2, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations right of Borrower under the Loan Documents in a manner satisfactory or any other Person to Lender in all respectsTransfer without such consent, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under constitute a consent to or waiver of any right, remedy or power of Lender to withhold its or their obligations with respect to any other Indebtedness in consent on a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant subsequent occasion to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement transaction not otherwise permitted by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of this Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer4.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners owners, as applicable, in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other ObligationsObligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) . Without the prior written consent of Lender, which consent shall not be unreasonably withheld, and except to the extent otherwise set forth in this Section 5.2.105.2.9, Borrower shall not, and shall not permit permit, any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an any direct or indirect interest in Borrower (any Restricted Partyof the actions in the foregoing clauses (i) or (ii), a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without which Lender's prior written consent’s consent shall not be required.
(cb) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property Property, or any part thereof thereof, for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part substantially all of the Property for other than actual occupancy by a space Tenant thereunder Property, or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 5.1.21 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Sources: Loan Agreement (First Capital Real Estate Trust Inc)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on Unless such action is permitted by the experience provisions of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall agrees that it will not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, conveyassign, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, transfer or otherwise dispose of its legal or beneficial interests in any Individual Property or the Collateral or any part thereof or permit Principal, Mortgage Borrower or Maryland Owner to do any of the foregoing other than pursuant to space leases permitted under, and entered into in accordance with, Section 5.1.20 hereof (or Section 5.1.20 of the Mortgage Loan Agreement with respect to Mortgage Borrower and Maryland Owner), (ii) permit any owner, directly or indirectly, of an ownership interest in the Collateral or any Individual Property, to transfer or dispose of such interest, whether by transfer of stock or other interest in a Restricted Party, or otherwise; (iii) incur Indebtedness (other than the Indebtedness permitted pursuant to the terms of this Agreement), or permit Mortgage Borrower or Maryland Borrower to incur Indebtedness (other than Indebtedness permitted pursuant to the terms of the Mortgage Loan Agreement), (iv) mortgage, hypothecate or otherwise encumber or grant a security interest in the Collateral, any Individual Property or any part thereof, (v) sell, assign, convey, transfer, mortgage, encumber, grant a security interest in, or otherwise transfer or dispose of any direct or indirect ownership interest in any Restricted Party or permit any owner of an interest in a Restricted Party to do the same, or (directly vi) file, or indirectlypermit Mortgage Borrower or Maryland Owner to file, voluntarily a declaration of condominium with respect to any Individual Property (any of the foregoing transactions, a “Transfer”). For avoidance of doubt, except as expressly set forth in Section 5.2.10(d) below, no assumption of all or involuntarilyany portion of the Loan shall be permitted without Lender’s prior written consent, such consent to be granted or withheld in Lender’s sole and absolute discretion.
(b) For purposes hereof, a “Transfer” shall not include (i) any public issuance, sale or transfer of non-controlling interests in Inland Western Retail Real Estate Trust, Inc., (ii) transfer by devise or descent or by operation of law upon the death of a member or otherwisepartner of Borrower, and whether Mortgage Borrower, Principal or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted TransfersMaryland Owner, or (iii) enter into any plan the transfer of divisiondirect or indirect equity interests in Inland Equity Investors, LLC or dividein Inland Equity, establish a protected seriesLLC by the current holders thereof or their respective successors, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consenttransferees and assigns.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.105.2.10 to the contrary, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten up to forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing the membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a the Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall pay shall, no less than thirty (30) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies. In addition, at all times, Indemnitor must continue to (i) Control each Restricted Party, and (ii) own, directly or indirectly, not less than fifty-one percent (51%) legal and beneficial interest in each Restricted Party. Notwithstanding anything contained in this Section 5.2.10(c), no Transfer of any direct ownership interests in Borrower, any Individual Mortgage Borrower, Maryland Owner, Principal or any Junior Mezzanine Borrower shall be permitted.
(ed) Without limiting Lender’s discretion to approve or disapprove At any request for a waiver time after the first (1st) anniversary of the prohibition against Transfersfirst (1st) Payment Date, Lender specifically reserves the right to condition shall not withhold its consent to any waiver a one (1) time Transfer of a prohibited Transfer upon satisfaction all of the Properties and in the equity of Mortgage Borrower, Principal and Maryland Owner that results in an assumption of the entire Loan and the entire Mortgage Loan, provided that Lender receives sixty (60) days’ prior written notice of such Transfer and further provided that the following minimum conditionsadditional conditions are satisfied:
(i) the New Mortgage Borrower and the New Mezzanine Borrower, (collectively the “Transferee”) shall pay Lender each be a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan Special Purpose Entity which at the time -71- of such transfertransfer will be in compliance with, and must be able to satisfy all of, the representations, warranties and covenants contained in Section 4.1.30, Section 4.1.36, Section 5.1.27 and Section 5.2.9 and corresponding provisions of the Mortgage Loan Agreement and which shall have assumed in writing (subject to the terms of Section 9.4 hereof) and agreed to comply with all the terms, covenants and conditions set forth in this Loan Agreement and the other Loan Documents and the Mortgage Loan Documents, as applicable, expressly including, without limitation the representations, warranties and covenants contained in Section 4.1.30, Section 4.1.35, Section 5.1.1 and Section 5.1.27 hereof, and corresponding provisions of the Mortgage Loan Agreement;
(ii) Borrower shall pay deliver confirmation in writing from the Rating Agencies that such proposed Transfer will not cause a downgrading, withdrawal, reduction or qualification of the ratings in effect immediately prior to such Transfer for the Securities, or any and all reasonable out-of-pocket costs incurred class thereof, issued in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxesa Securitization which are then outstanding;
(iii) The proposed transferee Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(the “Transferee”iv) Transferee or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the PropertyProperties, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee Without limiting the generality of Section 5.2.10(d)(i), New Mezzanine Borrower shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance reasonably satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Each Individual Property shall be managed by a Qualifying Manager pursuant to a Replacement Management Agreement;
(ix) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ixx) Transferee no Event of Default shall have occurred and Transferee’s Principals must be able to satisfy all the representations continuing and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the each existing UCC Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property Collateral and naming the Transferee New Mezzanine Borrowers as owner of the PropertyCollateral, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the relevant UCC Title Insurance Policy issued on the date hereof and the Permitted EncumbrancesEncumbrances relating thereto;
(xii) If applicableBorrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender, which Additional Insolvency Opinion may be relied upon by Lender, the Property Rating Agencies and their respective counsel, agents and representatives with respect to the proposed transaction, including, without limitation, Transferee;
(xiii) Borrower or Transferee, at its sole costs and expense, shall deliver to Lender a fraudulent conveyance opinion reflecting such Transfer, which fraudulent conveyance opinion may be relied upon by Lender, the Rating Agencies and their respective counsel, agents and representatives with respect to the proposed transaction, including, without limitation, Transferee;
(xiv) Transferee, at its sole cost and expense, shall deliver opinions regarding existence, authority and enforceability, which opinions may be relied upon by Lender, the Rating Agencies and their respective counsel, agents and representatives with respect to the proposed transaction;
(xv) Transferee and Transferee’s Principals shall deliver (1) all organizational documentation reasonably requested by Lender, which shall be managed reasonably acceptable to Lender, and (2) all certificates, agreements and covenants reasonably required by Qualified Manager Lender;
(xvi) Prior to any release of Indemnitor, one (1) or more substitute indemnitors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Indemnitor under the Indemnification Agreement executed by Indemnitor or execute a replacement guaranty reasonably satisfactory to Lender;
(xvii) if the Junior Mezzanine Loan is still outstanding, Junior Mezzanine Borrower has complied with all of the terms and conditions set forth in the Junior Mezzanine Loan Documents with respect to the Transfer and assumption of the Junior Mezzanine Loan;
(xviii) Borrower shall have paid an assumption fee equal to one percent (1.0%) of the then outstanding principal balance of the Loan;
(xix) Borrower shall pay (or cause to be paid) any and all reasonable out-of-pocket costs actually incurred by Lender in connection with such Transfer (including, without limitation, Lender’s reasonable counsel fees and disbursements) and all recording fees, title insurance premiums and mortgage and intangible taxes and the fees and expenses of the Rating Agencies pursuant to a Replacement Management Agreementclause (b) above; and
(xiiixx) The Property meets Mortgage Loan Borrower shall have complied with all terms and conditions set forth in the Mortgage Loan Documents with respect to the Transfer and the assumption of the Mortgage Loan. Lender shall approve or disapprove any proposed Transfer governed by this Section 5.2.10(d) within thirty (30) days of Lender’s underwriting standards related receipt of a written notice from Borrower requesting Lender’s approval, provided such notice includes all information necessary to its financial conditionmake such decision, cash flowand further provided that such written notice from Borrower shall conspicuously state, operating incomein large bold type, physical conditionthat “PURSUANT TO SECTION 5.2.10(D) OF THE LOAN AGREEMENT, management A RESPONSE IS REQUIRED WITHIN THIRTY (30) DAYS’ OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”. If Lender fails to disapprove any proposed Transfer within such period, Borrower shall provide a second written notice requesting approval, which written notice shall conspicuously state, in large bold type, that “PURSUANT TO SECTION 5.2.10(D) OF THE LOAN AGREEMENT, THE MATTER DESCRIBED HEREIN SHALL BE DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY WITHIN FIFTEEN (15) BUSINESS DAYS OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”. Thereafter, if Lender does not disapprove the proposed Transfer within said fifteen (15) Business Day period, Lender's consent to the proposed Transfer shall be deemed to have been given; provided, however, and operationnotwithstanding the foregoing, no such consent to the proposed Transfer shall be deemed given unless and until Borrower shall have delivered confirmation in writing from the Rating Agencies that such proposed Transfer will not cause a downgrading, withdrawal, reduction or qualification of the ratings in effect immediately prior to such Transfer for the Securities, or any class thereof, issued in connection with a Securitization which are then outstanding.
(e) Each of Mortgage Borrower and Maryland Owner, without the consent of Lender, may grant easements, restrictions, covenants, reservations and rights of way in the ordinary course of business for access, parking, water and sewer lines, telephone and telegraph lines, electric lines and other utilities or for other similar purposes, provided that no such transfer, conveyance or encumbrance shall materially impair the utility and operation of the applicable Individual Property or materially adversely affect the value of such Individual Property or the Net Operating Income of such Individual Property.
(f) Notwithstanding any provision anything contained in this Section 5.2.10 to the contrary, limited partnership restrictions on Transfers set forth herein or membership interests, as applicable, in the Pledge Agreement shall not apply to the direct or indirect pledge by Junior Mezzanine Borrower of the ownership interests in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed security for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior Junior Mezzanine Loan pursuant to the commencement of such transfer; Junior Mezzanine Loan Agreement.
(C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (Dg) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether not consent to or not consummated; (F) once the Additional Permitted permit a Transfer is complete, the persons with Control of Borrower and management of the Property are Properties by Mortgage Borrower as permitted under Sections 5.2.10(d) of the same persons who have Mortgage Loan Agreement unless it obtains the prior consent of Lender. Lender shall consent to such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted a Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with if the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer5.2.10(d) are complied with.
Appears in 1 contract
Sources: Senior Mezzanine Loan Agreement (Inland Western Retail Real Estate Trust Inc)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the creditworthiness and experience of Borrower and its stockholdersgeneral partner, general managing member, limited partners, membersmembers and beneficial owners, Key Principals and (if Borrower is a trust) beneficial owners as applicable, in owning and operating properties such as the Property in agreeing to make the Loanloan secured by the Mortgage, and that Lender will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other ObligationsDebt. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the shall not without Lender’s prior written consent of Lender, and except to the extent as otherwise set forth expressly provided in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): 5.2.10 (i) sell, assign, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, transfer or otherwise dispose of its legal or beneficial interests in the Property or any part thereof other than pursuant to Leases permitted under, and entered into in accordance with, Section 5.1.20 hereof, (ii) permit any owner, directly or indirectly, of an ownership interest the Property, to transfer or dispose of such interest, whether by transfer of stock or other interest in a Restricted Party, or otherwise, (iii) incur Indebtedness (other than the Indebtedness permitted pursuant to the terms of this Agreement), (iv) mortgage, hypothecate or otherwise encumber or grant a security interest in the Property or any part thereof, (v) sell, assign, convey, transfer, mortgage, encumber, grant a security interest in, or otherwise transfer or dispose of (directly any direct or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an indirect ownership interest in any Restricted Party, other than (A) pursuant to Leases or permit any owner of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or to do the creation or issuance of new legal or beneficial interests; same, or (viivi) file a declaration of condominium with respect to the removal or the resignation Property (any of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereofforegoing transactions, a “Transfer”).
(db) Notwithstanding At any time other than the provisions of this Section 5.2.10period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten up to forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a such Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and In addition, at all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion times, Guarantor must continue to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to Control each Restricted Party, and (ii) own, directly or indirectly, not less than fifty-one percent (151%) of the outstanding principal balance legal and beneficial interest in each Restricted Party.
(c) At any time other than the period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization, Lender shall not withhold its consent to a Transfer of the Loan at entire Property or all of the time outstanding ownership interests in Borrower in a single transaction to one newly-formed Special Purpose Entity which shall be a wholly-owned subsidiary of such transfer;
IDRETI (ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Permitted Affiliate Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined approved by Lender;
Lender in its reasonable discretion (iv“Permitted Affiliate Transfer”), provided (1) Transferee no Event of Default shall have occurred and Transferee’s Principals shallbe continuing, (2) the creditworthiness of IDRETI, as applicable, has not deteriorated, in the sole discretion of Lender, from the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior Closing Date to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi3) Borrower shall deliver, at its sole cost have paid all reasonable and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property customary third party expenses (including reasonable attorneys’ fees and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xiidisbursements) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses actually incurred by Lender in connection with such Transfer (but not any assumption or processing fee).
(d) At any time after other than during the Additional Permitted Transferperiod that is thirty (30) days prior to and thirty (30) days after a Securitization, whether or Lender shall not consummated; (F) once the Additional Permitted withhold its consent to a Transfer is complete, the persons with Control of Borrower and management of the Property and assumption of the Loan, provided that Lender receives thirty (30) days’ prior written notice of such Transfer and further provided that the following additional requirements are satisfied:
(I) THE PROPOSED TRANSFEREE OF THE PROPERTY SHALL BE A SPECIAL PURPOSE ENTITY (THE “TRANSFEREE”) WHICH AT THE TIME OF SUCH TRANSFER WILL BE IN COMPLIANCE WITH, AND MUST BE ABLE TO SATISFY ALL OF, THE REPRESENTATIONS, WARRANTIES AND COVENANTS CONTAINED IN SECTION 4.1.30, SECTION 4.1.35, SECTION 5.1.23 AND SECTION 5.2.9 AND WHICH SHALL HAVE ASSUMED IN WRITING (SUBJECT TO THE TERMS OF SECTION 9.3 HEREOF) AND AGREED TO COMPLY WITH ALL THE TERMS, COVENANTS AND CONDITIONS SET FORTH IN THIS LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS, EXPRESSLY INCLUDING, WITHOUT LIMITATION THE REPRESENTATIONS, WARRANTIES AND COVENANTS CONTAINED IN SECTION 4.1.30, SECTION 4.1.35, SECTION 5.1.1 AND SECTION 5.1.23 HEREOF;
(II) BORROWER SHALL DELIVER CONFIRMATION IN WRITING FROM THE RATING AGENCIES THAT SUCH PROPOSED TRANSFER WILL NOT CAUSE A DOWNGRADING, WITHDRAWAL, REDUCTION OR QUALIFICATION OF THE RATINGS IN EFFECT IMMEDIATELY PRIOR TO SUCH TRANSFER FOR THE SECURITIES, OR ANY CLASS THEREOF, ISSUED IN CONNECTION WITH A SECURITIZATION WHICH ARE THEN OUTSTANDING;
(III) TRANSFEREE AND TRANSFEREE’S PRINCIPALS SHALL, AS OF THE DATE OF SUCH TRANSFER, HAVE AN AGGREGATE NET WORTH AND LIQUIDITY NOT WORSE THAN THE NET WORTH AND LIQUIDITY OF BORROWER AND ITS PRINCIPALS AS OF THE DATE HEREOF OR AN AGGREGATE NET WORTH AND LIQUIDITY OTHERWISE REASONABLY ACCEPTABLE TO LENDER;
(IV) TRANSFEREE OR TRANSFEREE’S PRINCIPALS MUST HAVE DEMONSTRATED EXPERTISE IN OWNING AND OPERATING PROPERTIES SIMILAR IN LOCATION, SIZE, CLASS AND OPERATION TO THE PROPERTY, WHICH EXPERTISE SHALL BE REASONABLY DETERMINED BY LENDER;
(V) TRANSFEREE, TRANSFEREE’S PRINCIPALS AND ALL OTHER ENTITIES WHICH MAY BE OWNED OR CONTROLLED DIRECTLY OR INDIRECTLY BY TRANSFEREE’S PRINCIPALS (“RELATED ENTITIES”) MUST NOT HAVE BEEN PARTY TO ANY BANKRUPTCY PROCEEDINGS, VOLUNTARY OR INVOLUNTARY, MADE AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS OR TAKEN ADVANTAGE OF ANY INSOLVENCY ACT, OR ANY ACT FOR THE BENEFIT OF DEBTORS WITHIN SEVEN (7) YEARS PRIOR TO THE DATE OF THE PROPOSED TRANSFER;
(VI) TRANSFEREE SHALL ASSUME ALL OF THE OBLIGATIONS OF BORROWER UNDER THE LOAN DOCUMENTS IN A MANNER SATISFACTORY TO LENDER IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, BY ENTERING INTO AN ASSUMPTION AGREEMENT IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO LENDER;
(VII) THERE SHALL BE NO MATERIAL LITIGATION OR REGULATORY ACTION PENDING OR THREATENED AGAINST TRANSFEREE, TRANSFEREE’S PRINCIPALS OR RELATED ENTITIES WHICH IS NOT REASONABLY ACCEPTABLE TO LENDER;
(VIII) THE PROPERTY SHALL BE MANAGED BY A QUALIFIED MANAGER PURSUANT TO A REPLACEMENT MANAGEMENT AGREEMENT;
(IX) TRANSFEREE, TRANSFEREE’S PRINCIPALS AND RELATED ENTITIES SHALL NOT HAVE DEFAULTED UNDER ITS OR THEIR OBLIGATIONS WITH RESPECT TO ANY OTHER INDEBTEDNESS IN A MANNER WHICH IS NOT REASONABLY ACCEPTABLE TO LENDER;
(X) NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AND NO DEFAULT OR EVENT OF DEFAULT SHALL OTHERWISE OCCUR AS A RESULT OF SUCH TRANSFER;
(XI) BORROWER SHALL DELIVER, AT ITS SOLE COST AND EXPENSE, AN ENDORSEMENT TO EACH EXISTING TITLE INSURANCE POLICY INSURING THE RELATED MORTGAGE, AS MODIFIED BY THE ASSUMPTION AGREEMENT, AS A VALID FIRST LIEN ON THE PROPERTY AND NAMING TRANSFEREE AS OWNER OF THE FEE ESTATE (OR LEASEHOLD ESTATE, AS APPLICABLE) OF THE PROPERTY, WHICH ENDORSEMENT SHALL INSURE THAT, AS OF THE DATE OF THE RECORDING OF THE ASSUMPTION AGREEMENT, SUCH PROPERTY SHALL NOT BE SUBJECT TO ANY ADDITIONAL EXCEPTIONS OR LIENS OTHER THAN THOSE CONTAINED IN SUCH TITLE INSURANCE POLICY ISSUED ON THE DATE HEREOF AND THE PERMITTED ENCUMBRANCES RELATING THERETO;
(XII) BORROWER OR TRANSFEREE, AT ITS SOLE COST AND EXPENSE, SHALL DELIVER TO LENDER AN ADDITIONAL INSOLVENCY OPINION (IF AN INSOLVENCY OPINION WAS ISSUED IN CONNECTION WITH THE CLOSING) REFLECTING SUCH TRANSFER SATISFACTORY IN FORM AND SUBSTANCE TO LENDER, WHICH ADDITIONAL INSOLVENCY OPINION MAY BE RELIED UPON BY LENDER, THE RATING AGENCIES AND THEIR RESPECTIVE COUNSEL, AGENTS AND REPRESENTATIVES WITH RESPECT TO THE PROPOSED TRANSACTION, INCLUDING, WITHOUT LIMITATION, TRANSFEREE;
(XIII) INTENTIONALLY OMITTED;
(XIV) TRANSFEREE, AT ITS SOLE COST AND EXPENSE, SHALL DELIVER OPINIONS REGARDING EXISTENCE, AUTHORITY AND ENFORCEABILITY, WHICH OPINIONS MAY BE RELIED UPON BY LENDER, THE RATING AGENCIES AND THEIR RESPECTIVE COUNSEL, AGENTS AND REPRESENTATIVES WITH RESPECT TO THE PROPOSED TRANSACTION;
(XV) TRANSFEREE AND TRANSFEREE’S PRINCIPALS SHALL DELIVER (1) ALL ORGANIZATIONAL DOCUMENTATION REASONABLY REQUESTED BY LENDER, WHICH SHALL BE REASONABLY ACCEPTABLE TO LENDER, AND (2) ALL CERTIFICATES, AGREEMENTS AND COVENANTS REASONABLY REQUIRED BY LENDER;
(XVI) PRIOR TO ANY RELEASE OF GUARANTOR, ONE (1) OR MORE SUBSTITUTE GUARANTORS REASONABLY ACCEPTABLE TO LENDER SHALL HAVE ASSUMED ALL OF THE LIABILITIES AND OBLIGATIONS OF GUARANTOR UNDER THE GUARANTY AND ENVIRONMENTAL INDEMNITY EXECUTED BY GUARANTOR OR EXECUTE A REPLACEMENT GUARANTY AND ENVIRONMENTAL INDEMNITY REASONABLY SATISFACTORY TO LENDER;
(XVII) BORROWER SHALL HAVE PAID AN ASSUMPTION FEE EQUAL TO ONE-HALF OF ONE PERCENT (0.5%) OF THE THEN OUTSTANDING PRINCIPAL BALANCE OF THE LOAN IN CONNECTION WITH THE FIRST SUCH TRANSFER, AND AN ASSUMPTION FEE EQUAL TO ONE PERCENT (1.0%) OF THE THEN OUTSTANDING PRINCIPAL BALANCE OF THE LOAN IN CONNECTION WITH EACH SUBSEQUENT TRANSFER, PROVIDED, HOWEVER, NO SUCH ASSUMPTION FEE SHALL BE PAYABLE IF THE TRANSFEREE IS WHOLLY OWNED BY AN IDENTIFIED AFFILIATE; AND
(XVIII) BORROWER SHALL PAY (OR CAUSE TO BE PAID) ANY AND ALL REASONABLE OUT-OF-POCKET COSTS ACTUALLY INCURRED BY LENDER IN CONNECTION WITH SUCH TRANSFER (INCLUDING, WITHOUT LIMITATION, LENDER’S REASONABLE COUNSEL FEES AND DISBURSEMENTS) AND ALL RECORDING FEES, TITLE INSURANCE PREMIUMS AND MORTGAGE AND INTANGIBLE TAXES AND THE FEES AND EXPENSES OF THE RATING AGENCIES (IF ANY) PURSUANT TO CLAUSE (B) ABOVE.
(e) Borrower, without the same persons who consent of Lender, may grant easements, restrictions, covenants, reservations and right of way in the ordinary course of business for access, parking, water and sewer lines, telephone and telegraph lines, electric lines and other utilities or for other similar purposes, provided that no such transfer, conveyance or encumbrance shall materially impair the utility and operation of the Property or materially adversely affect the value of such Property or the Net Operating Income of such Property. In connection with any transfer, conveyance or encumbrance permitted in the immediately preceding sentence, the Lender shall execute and deliver any instrument reasonably necessary or appropriate to evidence its consent to said action or to subordinate the Lien of the Mortgage to such easements, restrictions, covenants, reservations and rights of way or other similar grants upon receipt by the Lender of: (A) a copy of the instrument of transfer; and (B) an Officer’s Certificate stating with respect to any transfer described above, that such transfer does not materially impair the utility and operation of the Property or materially reduce the value of such Property or the Net Operating Income of such Property. If Borrower shall receive any consideration in connection with any of said described transfers or conveyances, Borrower shall have the right to use any such Control and management rights proceeds in connection with any alterations performed in connection therewith, or required thereby, to the extent any such proceeds are not used in connection with alterations (or any such proceeds exceeds the amount required to perform the related alterations), Borrower shall immediately deposit such amount or the remainder thereof, as the case may be, into the Lockbox Account. The acquisition by IDRETI of any entity whether by merger, stock purchase, asset purchase or any other manner shall not be considered a “Transfer” for purposes hereof so long as: (a) IDRETI is the surviving entity following such a transaction; (b) the net worth of IDRETI shall equal or exceed the net worth of IDRETI immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; such a transaction, and (Hc) Borrower IDRETI shall have delivered satisfactory evidence to Lender thatretain management and control.
(f) Except as set forth herein, following no sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer all or any part of the Additional Permitted TransferProperty, Borrower shall continue to comply with be permitted during the provisions term of Section 4.1.31 hereofthe Loan without Lender’s prior written approval. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Property without Lender’s consentconsent if such consent is required herein. This provision shall apply to every Transfer sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Property regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfersale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Property.
(g) Lender’s consent to any sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Property shall not be deemed to be a waiver of Lender’s right to require such consent in the future. Any sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Property made in contravention of this Section shall be null and void and of no force or effect.
(h) Borrower agrees to bear and shall pay or reimburse Lender on demand for all reasonable expenses (including, without limitation, Lender’s actual out-of-pocket attorneys’ fees and disbursements, title search costs, rating agency fees and title insurance endorsement premiums) incurred by Lender in connection with the review, approval or disapproval, and documentation of any such sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer.
Appears in 1 contract
Sources: Loan Agreement (Inland Diversified Real Estate Trust, Inc.)
Transfers. (a) Each Borrower and Equity Owner acknowledges that Lender has examined and relied on the experience of Borrower Borrower, Equity Owner, Mortgage Borrower, Operating Lessee Pledgor, Operating Lessee and its their respective stockholders, general partners, members, Key Principals principals and (if Borrower such Person is a trust) beneficial owners in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Mortgage Borrower’s ownership and control of the Property Properties and Borrower and Equity Owner’s ownership of the Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Each Borrower and Equity Owner acknowledges that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower default in the repayment of the Debt or should Borrower or Equity Owner default in the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise expressly set forth in this Section 5.2.10, no Individual Borrower or Equity Owner shall, nor shall not, and shall not such party permit any Restricted Party to to, do any of the following (individually or collectively, a “Transfer”): ), (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Individual Property or any part thereof or any legal or beneficial interest therein or the Collateral or any part thereof or any legal or beneficial interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty or the Collateral or any part thereof or any legal or beneficial interest in any of them, other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, 5.1.21 or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentPledge Agreement.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower Borrower, Equity Owner, Mortgage Borrower, Operating Lessee Pledgor or Operating Lessee agrees to sell one or more Individual Properties or any part thereof or the Property Collateral or any part thereof for a price to be paid in installments; (ii) with the exception of the Operating Lease, an agreement by Mortgage Borrower or Operating Lessee leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s or Operating Lessee’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent Manager (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 5.1.23 hereof; (viii) intentionally omitted; and (ix) if Mortgage Borrower or Borrower enters into, or the Property is subjected to, any PACE Loan.
(d) Notwithstanding the provisions of this Section 5.2.10, provided that no Event of Default shall have occurred and be continuing, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests direct or non-managing membership indirect interests (as the case may be) in a Restricted Party; provided, however, that, in the case of each such Transfer, (i) no such Transfer shall result in the Change change of Control in a Restricted Party Borrower, Equity Owner, Mortgage Borrower, Operating Lessee Pledgor, Operating Lessee or cause any Key Principal Guarantor, (ii) the Properties shall be managed by a Qualified Manager pursuant to a the Management Agreement or a Replacement Management Agreement, (iii) if, as a result of the consummation of such Transfer, the organizational chart of Borrower attached hereto as Schedule V would no longer be a Key Principal accurate, Borrower shall deliver to Lender an updated organizational chart, together with an Officer’s Certificate, certifying that such updated organizational chart is true, correct and complete, (iv) in the event of Borrowerany Transfer resulting in any Person and its Affiliates that did not own in the aggregate more than twenty percent (20%) of the direct or indirect interests in Borrower or Equity Owner prior to such transfer, and owning in excess of twenty percent (20%) of the ownership interest in Borrower or Equity Owner, Borrower or Equity Owner (as a condition applicable) shall provide to each such TransferLender, Lender shall receive not less than thirty ten (3010) days Business Days prior to such transfer, the name and identity of each proposed transferee, together with the names of its controlling principals, the social security number or employee identification number of such transferee and controlling principals, and such transferee’s and controlling principal’s home address or principal place of business, and home or business telephone number and (A) the proposed transferee must satisfy Lender’s then current “know your customer” standards and (B) Borrower shall have provided to Lender an Officer’s Certificate identifying the name and address of the proposed transferee and affirming that such proposed transferee is not a Embargoed Person. Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with the pledges (or foreclosure of any thereof in accordance with the applicable pledge agreement, or the exercise of any other remedies pursuant to the Loan Documents, Mortgage Loan Documents or additional mezzanine loan documents entered into pursuant to Section 9.1.3(b) hereof, as applicable, or acceptance of a deed-in-lieu or an assignment-in-lieu of any thereof) pursuant to the Mortgage Loan Documents, the Pledge Agreement or this Agreement and no such pledge, foreclosure, exercise of remedies or assignment or transfer in lieu of foreclosure thereof shall in any way be deemed a violation of this Agreement. In addition, at all times, Guarantor must continue to Control Borrower, Equity Owner, Mortgage Borrower, Operating Lessee Pledgor, Operating Lessee and any Affiliated Manager and own, directly or indirectly, at least a fifty-one percent (51%) legal and beneficial interest in Borrower, Equity Owner, Mortgage Borrower, Operating Lessee Pledgor, Operating Lessee and any Affiliated Manager. Notwithstanding anything to the contrary herein, no withdrawal, removal or replacement of any advisor to Guarantor shall be deemed a Transfer or a change in Control or a violation of any provisions of this Agreement or the Loan Documents. Borrower and Guarantor shall provide to Lender reasonable prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies)withdrawal, removal or replacement.
(e) Without limiting Notwithstanding the foregoing, neither Lender’s discretion consent nor notice to approve Lender shall be required in connection with the issuance of any share or disapprove stock or any request for sale or transfer by a waiver shareholder in any corporation or REIT of the prohibition against Transfersshares of which are publicly traded on the New York Stock Exchange or any other nationally or internationally recognized securities exchange or quoted on a nationally or internationally recognized automated quotation system, Lender specifically reserves the right to condition its consent to including, without limitation, NASDAQ, nor shall any waiver such sale, transfer or issuance of stock constitute a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operationhereunder.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s a Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has Lenders have examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals members and (if Borrower is a trust) beneficial owners owners, as applicable, and principals of Borrower in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has Administrative Agent and Lenders have a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender Administrative Agent and Lenders can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of Lender, the Unanimous Lenders and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Individual Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than than, in either case, to the extent that such Transfer constitutes a Permitted Transfer or Permitted Debt. Any Transfer made without Unanimous Lenders’ prior written consent (A) to the extent that such consent is required pursuant to Leases of space in this Section 5.2.10) shall be null and void. Notwithstanding the Improvements foregoing, if after giving effect to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A such Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial direct interest in a Restricted Party permitted in this Section 5.2.10 more than forty-nine percent (49%) in the aggregate of direct or the creation indirect interests in a Borrower are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or issuance of new legal or beneficial interests; or (vii) the removal or the resignation indirect interests in Borrower as of the managing agent (including an Affiliated Manager) other than Closing Date and such Person was not “paired” in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10Insolvency Opinion, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, howeverBorrower shall, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice to the effective date of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation deliver to the Property, which expertise shall be Administrative Agent an Additional Insolvency Opinion reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to LenderAdministrative Agent.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Sources: Loan Agreement (Excel Trust, L.P.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.105.2.10 , Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Properties or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and 5.1.20, (B) Permitted Transfers, and (C) subject to Section 5.1.23 above, any issuance, sale, pledge or (iii) enter into any plan transfer of divisionnon-controlling interests in ▇▇▇▇ Credit Property Trust III, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.Inc.
(c) A Subject to the exclusions in Section 5.2.10(b), a Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property Properties or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the an Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. , and provided, further, all outstanding partnership interests in Guarantor shall at all times be owned, directly or indirectly, by ▇▇▇▇ Credit Property Trust III, Inc. If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall pay shall, no less than thirty (30) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies). In addition, at all times, ▇▇▇▇ Credit Property Trust III, Inc. must continue to Control Borrower, Guarantor and Manager and own, directly or indirectly, at least a 51% legal and beneficial interest in Borrower, Guarantor and Manager.
(e) Without limiting No Transfer of the Properties and assumption of the Loan, or Transfer of any direct interest in any Individual Borrower shall occur during the period that is sixty (60) days prior to and sixty (60) days after a Securitization. Otherwise, Lender’s discretion consent to approve or disapprove any request for a waiver Transfer of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction Properties and assumption of the Loan or Transfer of one hundred percent (100%) of the outstanding membership or partnership interests in Borrower shall not be unreasonably withheld provided that Lender receives not less than sixty (60) days prior written notice of such Transfer and no Event of Default has occurred and is continuing, and further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay or cause to be paid to Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transferTransfer, unless the applicable Transfer is a Transfer to an Identified Affiliate that is a ▇▇▇▇ sponsored entity, in which case no transfer fee shall be required;
(ii) Borrower shall pay or cause to be paid any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the PropertyProperties, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall ratify or assume (subject to Section 9.3 hereof) all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender, provided that such certificates, agreements and covenants shall not materially increase the obligations of Borrower under the Loan Documents or materially decrease the rights of Borrower under the Loan Documents;
(x) If required by Lender, Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a qualification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.;
(xixii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance PolicyPolicies, as modified by the assumption agreement, as a valid first lien liens on the Property Properties and naming the Transferee as owner of the PropertyProperties, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property Properties shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy Policies issued on the date hereof and the Permitted Encumbrances;
(xiixiii) If applicable, the Property The Properties shall be managed by a Qualified Manager pursuant to a Replacement Management Agreement; and
(xiiixiv) The Property meets Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender. Immediately upon a Transfer to such Transferee and the satisfaction of all of the Lender’s underwriting standards related above requirements, the named Borrower and Guarantor herein shall be released from all liability under this Agreement, the Note, the Mortgages and the other Loan Documents accruing after such Transfer. The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to its financial condition, cash flow, operating income, physical condition, management and operationprovide written evidence thereof reasonably requested by Borrower.
(f) Notwithstanding No Transfer of any provision direct interest in this Section 5.2.10 a Principal or a manager of an Individual Borrower or of a Principal shall occur during the period that is sixty (60) days prior to the contraryand sixty (60) days after a Securitization. Otherwise, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application to a Transfer of one hundred percent (100%) of the fee set forth outstanding membership interests in Section 5.2.10(e)(i): a Principal or a manager of an Individual Borrower or of a Principal shall not be unreasonably withheld provided that Lender receives not less than sixty (i60) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members days prior written notice of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) Transfer and no Default or Event of Default has occurred and is continuing; , and further provided that the following additional requirements are satisfied:
(i) The Transferee shall be, or shall be owned and controlled by, an Identified Affiliate;
(ii) Borrower shall pay or cause to be paid any and all reasonable out-of-pocket costs incurred in connection with such Transfer (including, without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below), provided that no transfer fee shall be required;
(iii) The Transferee or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Properties, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall ratify all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) Lender has received Borrower’s notice all certificates, agreements, covenants and legal opinions reasonably required by Lender, provided that such certificates, agreements and covenants shall not materially increase the obligations of Borrower under the Loan Documents or materially decrease the rights of Borrower under the Loan Documents;
(x) If required by Lender, Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a qualification, reduction, downgrade or withdrawal of the Additional Permitted Transfer no less than 30 days ratings in effect immediately prior to the commencement of such transfer; (C) no indemnitor assumption or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible transfer for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender Securities or any class thereof issued in connection with the Additional Permitted Transfer, whether or not consummated; a Securitization which are then outstanding;
(Fxi) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior Intentionally omitted;
(xii) Intentionally omitted;
(xiii) The Properties shall be continue to be managed by a Qualified Manager pursuant to the Additional Permitted TransferManagement Agreement or a Replacement Management Agreement; and
(Gxiv) Borrower or Transferee, at its sole cost and expense, shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence deliver to Lender that, following the an Additional Permitted Transfer, Borrower shall continue Insolvency Opinion reflecting such Transfer satisfactory in form and substance to comply with the provisions of Section 4.1.31 hereof. Lender.
(g) Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Sources: Loan Agreement (Cole Credit Property Trust III, Inc.)
Transfers. (a) Borrower acknowledges Borrowers acknowledge that Lender has examined and relied on the experience of Borrower Borrowers and its stockholders, general partners, members, Key Principals their direct and (if Borrower is a trust) beneficial owners indirect members in owning and operating properties such as the Property Collateral and Mortgage Borrowers in agreeing to make the Loan, and will continue to rely on Borrower’s Borrowers’ ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Additionally, Borrowers acknowledge that Lender has examined and relied on the experience of Mortgage Borrowers and their general partners, members, principals and (if any Mortgage Borrower acknowledges is a trust) beneficial owners, as applicable, in owning and operating properties such as the Properties and in owning intellectual property such as the IP, in agreeing to make the Loan, and will continue to rely on Mortgage Borrowers’ ownership of the Properties and the IP as a means of maintaining the value of the Properties and the IP and, therefore, indirectly the value of the Collateral, as security for repayment of the Debt and the performance of the obligations contained in the Loan Documents. Borrowers acknowledge that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower Borrowers default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower Borrowers shall not, and shall not permit any Transfer Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, license, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Property or any part thereof or any legal or beneficial interest therein therein, or any IP or any part thereof or any legal or beneficial interest of Borrower in therein, or the Loan (including Collateral or any of its rights, duties and obligations under this Agreement and the other Loan Documents) part thereof or any legal or beneficial interest therein; or (ii) permit a Sale or Pledge of an any interest in any Transfer Restricted PartyParty (any of the actions in the foregoing clauses (i) or (ii), a “Transfer”), other than than, notwithstanding anything to the contrary contained in this Section 5.2.10:
(A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and hereof;
(B) the pledge of the membership interests in each Mortgage Borrower as collateral for the First Mezzanine Loan and, if applicable, the exercise of remedies by First Mezzanine Lender including, without limitation, any Transfer of all or a portion of such membership interests in connection with a foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure under the First Mezzanine Loan Documents, provided that any such exercise of remedies is performed in accordance with and subject to the conditions and restrictions set forth in the Intercreditor Agreement and as a condition precedent to any foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure of such membership interests the First Mezzanine Lender shall pay to Mortgage Lender a transfer fee in an amount equal to 1.00% of the sum of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan Outstanding Principal Balance;
(C) the pledge of the membership interests in each First Mezzanine Borrower as collateral for the Loan and, if applicable, the exercise of remedies by Lender, including, without limitation, any Transfer of all or a portion of such membership interests in connection with a foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure under the Loan Documents, provided that any such exercise of remedies is performed in accordance with and subject to the conditions and restrictions set forth in the Intercreditor Agreement and as a condition precedent to any foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure of such membership interests the Lender shall pay to Mortgage Lender a transfer fee in an amount equal to 1.00% of the sum of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan Outstanding Principal Balance;
(D) the pledge of the membership interests in each Borrower as collateral for the Third Mezzanine Loan and, if applicable, the exercise of remedies by Third Mezzanine Lender, including, without limitation, any Transfer of all or a portion of such membership interests in connection with a foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure under the Third Mezzanine Loan Documents, provided that any such exercise of remedies is performed in accordance with and subject to the conditions and restrictions set forth in the Intercreditor Agreement and as a condition precedent to any foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure of such membership interests the Third Mezzanine Lender shall pay to Mortgage Lender a transfer fee in an amount equal to 1.00% of the sum of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan Outstanding Principal Balance;
(E) any Release Parcel Sale or an IP Sale, in each instance in accordance with the applicable provisions of Section 2.5 of the Mortgage Loan Agreement;
(F) Intentionally Deleted;
(G) any IP License or Adjacent Property IP License granted in accordance with the provisions of Section 5.1.26 hereof;
(H) the Permitted TransfersEncumbrances and Permitted IP Encumbrances;
(I) the issuance of new stock in, the merger or consolidation of, and/or the Sale or Pledge of the stock in, any Publicly Traded Entity who owns a direct or indirect ownership interest in any Transfer Restricted Party;
(iiiJ) enter into the transfer of indirect ownership interests in any plan Mortgage Borrower in order to create one or more new mezzanine borrowers for any New Mezzanine Loan as contemplated under the Mortgage Loan Agreement, including, without limitation, the transfers of division, or divide, establish a protected series, ownership interests which were necessary to create Third Mezzanine Borrowers and the admission of a new registered seriesmember in each of First Mezzanine Borrowers in connection with the creation of Third Mezzanine Borrowers; and
(K) the transfer by deed of any applicable Partial Release Parcel to a Subsidiary Transferee and the subsequent transfer of all of the membership interests held by Adjacent Borrower in such Subsidiary Transferee, or convert to another form in each instance in accordance with Section 2.5.1(f) of incorporated or unincorporated business or other entity or provide the Mortgage Loan Agreement; provided, however, that in its operating agreement for any the case of each of the foregoing clauses (A) — (K), such Transfer shall only be permitted hereunder if it does not violate any Legal Requirements, including specifically, but without Lender's prior written consentlimitation, any Gaming Laws, or suspend or terminate any liquor license applicable to a Property.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein any Borrower or Mortgage Borrower, as applicable, agrees to sell a Property or any part thereof, the Property IP, the Collateral or any part thereof for a price to be paid in installments; (ii) an agreement by any Mortgage Borrower leasing all or a substantial part of the a Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, any Mortgage Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Transfer Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Transfer Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation resignation, admission or addition of a general partner or the Sale or Pledge of the general partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Transfer Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation resignation, admission or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing or managing membership interests or the creation or issuance of new non non-managing or managing membership interests; (vi) if a Transfer Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Transfer Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent any Manager (including including, without limitation, an Affiliated Manager) other than in accordance with the Mortgage Loan Agreement and Section 5.1.22 hereof; or (viii) any deed-in-lieu or consensual foreclosure relating to any Property with or for the benefit of Mortgage Lender or any Affiliate thereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (so long as the case may be) following Transfers do not violate any Legal Requirements in a Restricted Party; providedany instance, howeverincluding specifically, no such Transfer shall but without limitation, any Gaming Laws, or cause or otherwise result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrowersuspension, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage termination and/or revocation of any insolvency act, Gaming License or the Casino Component Lease or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant liquor license applicable to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interestsProperty, as applicable, in Borrower the following Transfers may be transferred occur without Lender’s the consent and without application of Lender or the fee set forth in Section 5.2.10(e)(i): payment of any transfer or other fee, excluding, however, any Transfer of (i) among limited partners any direct interest in any Mortgage Borrower for so long as the Loan, the Mortgage Loan or membersany Mezzanine Loan is outstanding, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and and/or (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner direct interest in any Borrower for so long as the Loan or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions any Mezzanine Loan is satisfied: outstanding:
(A) the Transfer of any direct or indirect interest in any Transfer Restricted Party, provided that (1) no Event of Default, Mortgage Event of Default or any Mezzanine Event of Default has occurred and is continuing; , (2) (y) one or both Guarantors continue to Control, directly or indirectly, each Loan Party and HRHI, and (z) one or both Guarantors own, directly or indirectly, at least a fifty-one percent (51%) economic interest in each Loan Party and in HRHI, (3) Lender receives (y) at least ten (10) days prior written notice of any such voluntary Transfer and copies of the documents transferring such interest, or (z) written notice of any such involuntary Transfer and copies of the documents transferring such interest within thirty (30) days following such involuntary Transfer, (4) if after such Transfer any Person and its Affiliates collectively would own more than forty-nine (49%) in the aggregate of the direct and/or indirect interests of any Loan Party and as of the Closing Date such Person and its Affiliates collectively owned forty-nine percent (49%) or less in the aggregate of the direct and/or indirect interests of any Loan Party, Lender shall have received, prior to such Transfer, an Additional Insolvency Opinion reasonably satisfactory to Lender and the Rating Agencies and, if a Securitization has occurred, a confirmation in writing from the Rating Agencies to the effect that such Transfer will not result in a re-qualification, reduction or withdrawal of the then current rating assigned to the Securities or any class thereof in any applicable Securitization, and (5) Borrowers deliver, or cause Mortgage Borrowers to deliver, to Lender a copy of any consents or approvals required by any Governmental Authority, including specifically, but without limitation, any Gaming Authority, in connection with such Transfer;
(B) the Transfer of any direct or indirect interest in any Transfer Restricted Party to any other Person who is, as of the Closing Date, a holder of any direct or indirect interest in any Transfer Restricted Party, provided that (1) no Event of Default, Mortgage Event of Default or any Mezzanine Event of Default has occurred and is continuing, (2) (y) one or both Guarantors continue to Control, directly or indirectly, each Loan Party and HRHI, and (z) one or both Guarantors own, directly or indirectly, at least a fifty-one percent (51%) economic interest in each Loan Party and in HRHI, (3) Lender has received Borrower’s receives (y) at least ten (10) days prior written notice of any such voluntary Transfer and copies of the Additional Permitted documents transferring such interest, or (z) written notice of any such involuntary Transfer no less than 30 and copies of the documents transferring such interest within thirty (30) days prior following such involuntary Transfer, and (4) Borrowers deliver, or cause Mortgage Borrowers to the commencement deliver, to Lender a copy of any consents or approvals required by any Governmental Authority, including specifically, but without limitation, any Gaming Authority, in connection with such transfer; Transfer;
(C) no indemnitor the Transfer of any direct or Guarantor shall be released from indirect interest in any guaranty Transfer Restricted Party by inheritance, devise, bequest or indemnity agreement by virtue operation of law upon the death of a natural person who owned such interest, provided that (1) such Transfer is to a non-minor member of the Additional Permitted Transfer; (D) Borrower shall be responsible immediate family of the deceased holder of such interest or a trust established for the costs benefit of one or more members of the immediate family of the deceased holder of such interest, (2) (y) one or both Guarantors continue to Control, directly or indirectly, each Loan Party and expenses HRHI, and (z) one or both Guarantors own, directly or indirectly, at least a fifty-one percent (51%) economic interest in each Loan Party and in HRHI, (3) such Transfer shall not result in a change of documenting Control of the day-to-day operations of any of the Properties, (4) Lender receives written notice of such Transfer and copies of the documents transferring such interest not later than thirty (30) days following such Transfer, (5) the legal and financial structure of each Loan Party and the other Transfer Restricted Parties, and the single purpose nature and bankruptcy remoteness of each Loan Party and the other Transfer Restricted Parties, after such Transfer shall satisfy the applicable provisions of the Loan Documents, the Mortgage Loan Documents and/or the First Mezzanine Loan Documents (including, without limitation, Section 4.1.30 hereof and/or Section 4.1.30 of the Mortgage Loan Agreement or the First Mezzanine Loan Agreement, as applicable), (6) if after such Transfer any Person and its Affiliates would collectively own more than forty-nine (49%) in the aggregate of the direct and/or indirect interests of any Loan Party and as of the Closing Date such Person and its Affiliates collectively owned forty-nine percent (49%) or less in the aggregate of the direct and/or indirect interests of any Loan Party, Lender shall have received an Additional Permitted Transfer; Insolvency Opinion reasonably satisfactory to Lender and the Rating Agencies and, if a Securitization has occurred, a confirmation in writing from the Rating Agencies to the effect that such Transfer will not result in a re-qualification, reduction or withdrawal of the then current rating assigned to the Securities or any class thereof in any applicable Securitization, and (E7) Borrower shall reimburse Borrowers deliver, or cause Mortgage Borrowers to deliver, to Lender for all actual costs and expenses incurred a copy of any consents or approvals required by Lender any Governmental Authority, including specifically, but without limitation, any Gaming Authority, in connection with such Transfer; and
(1) the Additional Permitted Transfermerger or consolidation of any Guarantor or any Constituent Member of any Guarantor with or into any other Person, whether (2) the sale of any Guarantor or not consummated; substantially all of any Guarantor’s assets to any other Person, or (F3) once the Additional Permitted Transfer is completeissuance of new stock or limited partnership or membership interests in, and/or the persons with Control Sale or Pledge of Borrower and management stock, limited partnership or membership interests in, any Guarantor or any Constituent Member thereof (any of the Property are occurrences in the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; foregoing clauses (G1), (2) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and or (H) Borrower shall have delivered satisfactory evidence to Lender that3), following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.a “Guarantor
Appears in 1 contract
Sources: Second Mezzanine Loan Agreement (Hard Rock Hotel Holdings, LLC)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals members and (if Borrower is a trust) beneficial owners owners, as applicable, and principals of Borrower in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than than, in either case, to the extent that such Transfer constitutes a Permitted Transfer. Any Transfer made without Lender’s prior written consent (A) to the extent that such consent is required pursuant to Leases this Section 5.2.10) shall be null and void. For the avoidance of space doubt, notwithstanding anything in this Agreement to the Improvements to Tenants contrary, the Sale or Pledge of a direct or indirect interest in accordance with an Excluded Entity shall not constitute a Transfer and may be effectuated by the provisions of Section 5.1.20 and (B) Permitted Transfersapplicable Person without the consent of, or (iii) enter into any plan of divisionnotice to, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.105.2.10 but subject to the final two sentences of this Section 5.2.10(d), Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (provided that, in the case of any multi-member Restricted Party, excluding any interests of the managing member) (as the case may be) in a Restricted Party; provided, however, (i) no such Transfer shall result in the Change change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and (ii) as a condition to each such Transfer, Lender shall receive not less than thirty (30) days days’ prior written notice of such proposed Transfer. , and (iii) if after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall pay shall, no less than thirty (30) days prior to the effective date of any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of Transfer, deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and, following a Securitization, acceptable to the Rating Agencies. Notwithstanding anything contained in this Section 5.2.10(d), no Transfer of any direct ownership interests in Borrower or any SPE Constituent Entity shall be permitted. In addition, at all times, Guarantor must continue to Control Borrower and each SPE Constituent Entity and own, directly or indirectly, at least a fifty-one percent (51%) legal and beneficial interest in Borrower and each SPE Constituent Entity.
(e) Without limiting No Transfer of the Property and assumption of the Loan shall occur during the period that is sixty (60) days prior to a Securitization or the period that is sixty (60) days after a Securitization. Otherwise, Lender’s discretion consent to approve or disapprove any request for a waiver one (1) time Transfer of the prohibition against Transfers, Property and assumption of the entire Loan by the proposed Transferee (the “Transferee”) shall be given in Lender’s sole discretion provided that Lender specifically reserves receives sixty (60) days’ prior written notice of such Transfer and no Event of Default has occurred and is continuing at the right time Lender receives such notice and at the time such Transfer is consummated. In determining whether to condition its consent to any waiver of a prohibited proposed Transfer upon satisfaction of pursuant to this Section 5.2.10(e), Lender may require or consider, without limitation, the following minimum conditionsactions and matters:
(i) Borrower shall pay Lender a transfer fee equal to one one-half percent (10.5%) of the outstanding principal balance of the Loan at the time of such transferTransfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) Transferee or Transferee’s Principals Sponsors must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals Sponsors shall, as of the date of such transferTransfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals Sponsors and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals Sponsors (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals Sponsors or any Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals Sponsors and any Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals SPE Constituent Entities must be able to satisfy make all of the representations set forth in Sections 4.1.30, 4.1.35, and 4.1.38, and perform all of the covenants set forth in Sections 4.1.315.1.27, 4.1.35, 5.1.23 5.1.29 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals SPE Constituent Entities shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender Lender, and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Following a Securitization, if required by Lender, Transferee shall be approved by the Rating Agencies rating the Loan, which approval, if required by Lender, shall take the form of a Rating Agency Confirmation with respect to such Transfer;
(xi) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and the Environmental Indemnity or executed by Guarantor or execute a replacement guaranty and and/or environmental indemnity reasonably satisfactory to Lender.;
(xixii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, confirming the Lien of the Mortgage as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement endorsements shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens Liens other than those contained in the Title Insurance Policy issued on the date hereof Closing Date and the Permitted Encumbrances;
(xiixiii) If applicable, the The Property shall be managed by Qualified Manager (and, if the Qualified Manager managing the Property prior to the Transfer is being replaced, the replacement Qualified Manager shall manage the Property pursuant to a Replacement Management Agreement); and
(xiiixiv) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender (A) an Additional Insolvency Opinion in respect of such Transfer satisfactory in form and substance to Lender and (B) a fraudulent conveyance opinion in respect of such Transfer, each of which opinions may be relied upon by Lender and the Rating Agencies with respect to the proposed Transfer. Immediately upon the consummation of a Transfer pursuant to this Section 5.2.10(e) (provided that Lender has consented thereto in accordance with the foregoing), Borrower and Guarantor shall be released from all liability under this Agreement, the Note, the Mortgage and the other Loan Documents accruing after the date of such Transfer (other than to the extent such liability is expressly stated herein to survive). The Property meets all foregoing release shall be effective upon the date of such Transfer, but Lender agrees to provide written evidence thereof if the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operationsame is reasonably requested by Borrower.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s the consummation of a purported Transfer without Lender’s consent. This provision shall apply that is prohibited (and as such, null and void) pursuant to every Transfer regardless the terms of whether voluntary or not, or whether or not Lender has consented to any previous Transferthis Section 5.2.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on Except as otherwise permitted by the experience provisions of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt this Section or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth permitted elsewhere in this Section 5.2.10the Loan Documents, Borrower shall not, and shall will not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, permit or otherwise transfer or dispose of suffer (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise) any sale, and whether assignment, conveyance, transfer or not for consideration other similar disposition of its legal or of record) the Property equitable interest in all or any part thereof of the Property, (ii) permit or suffer (by operation of law or otherwise) any sale, assignment, conveyance, transfer or other disposition of any direct or indirect interest in Borrower, (iii) permit or suffer (by operation of law or otherwise) any mortgage, lien or other encumbrance of all or any legal part of the Property, other than the Permitted Encumbrances, (iv) permit or beneficial suffer (by operation of law or otherwise) any pledge, hypothecation, creation of a security interest therein in or other encumbrance of any interest direct or indirect interests in Borrower, or (v) file a declaration of condominium with respect to the Property (each action described in clauses (i), (ii), (iii), (iv) and (v) of this subsection is a “Transfer”).
(b) sale or conveyance by Borrower of all of the Property subject to the lien of the Mortgage (but not a mortgage, Lien or other encumbrance) is permitted, provided that the following conditions are satisfied:
(i) no Event of Default shall have occurred and be continuing and such sale or conveyance shall not result in an Event of Default;
(ii) the Person to whom the Property is sold or conveyed (the “Transferee”) satisfies the requirements of a Special Purpose Entity and the organizational documents of the Transferee are reasonably acceptable to Lender and, after a Securitization, to the Rating Agencies;
(iii) a Permitted Owner owns not less than 51% of the direct or indirect equity interests in the Transferee and controls, directly or indirectly, the Transferee;
(iv) Lender has received an Insolvency Opinion which may be relied upon by Lender, the Rating Agencies and their respective counsel, successors and assigns, with respect to the Transferee and its applicable affiliates, which Insolvency Opinion shall be reasonably acceptable to Lender and, after a Securitization, the Rating Agencies;
(v) the Transferee shall execute an assumption, effective as of the date of transfer, of all of the obligations of the Borrower thereafter arising or to be performed under the Loan (including any of its rightsAgreement, duties and obligations under this Agreement the Mortgage and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant subject, however, to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 9.4 hereof and upon such assumption, Borrower shall be released from the Loan Documents;
(vi) if following such sale or conveyance, Manager will not be the property manager of the Property, then the property manager of the Property must be a Qualifying Manager; and
(vii) if such sale or conveyance occurs (A) prior to a Securitization, Lender shall have consented to such sale or conveyance, which consent shall not be unreasonably withheld, or (B) Permitted Transfersafter a Securitization, a Rating Agency Confirmation with respect to such sale or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentconveyance.
(c) A Transfer shall include transfer or sale (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for but not a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a salepledge, assignment or other transfer ofhypothecation, or the grant creation of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iiiother Lien or encumbrance) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner direct or any profits or proceeds relating to such partnership interestindirect interests in Borrower is permitted, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of provided that the following minimum conditionsconditions are satisfied:
(i) Borrower after giving effect to such transfer or sale a Permitted Owner shall pay Lender a transfer fee equal to one percent (1%) own, directly or indirectly, not less than 51% of the outstanding principal balance of the Loan at the time of such transferequity interests in Borrower and control, directly or indirectly, Borrower;
(ii) prior to any such transfer or sale of direct or indirect ownership interests in Borrower, as a result of either of which (and after giving effect to such transfer or sale), more than 49% of the direct or indirect ownership interests in Borrower shall pay any have been transferred to a Person not owning at least 49% of the direct or indirect ownership interests in Borrower on the Closing Date (or as reflected in the most recent additional Insolvency Opinion delivered to Lender), Borrower shall deliver to Lender an additional Insolvency Opinion which may be relied upon by Lender, the Rating Agencies and all reasonable out-of-pocket costs incurred in connection their respective counsel, successors and assigns, with such Transferrespect to the proposed transfer or sale, including Lender’s counsel fees and disbursements and all recording feeswhich additional Insolvency Opinion shall be reasonably acceptable to Lender and, title insurance premiums and mortgage and intangible taxesafter a Securitization, the Rating Agencies;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years immediately prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be such transfer or sale no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; ;
(Biv) Lender has received Borrower’s notice if following such transfer or sale, Manager will not be the property manager of the Additional Permitted Transfer no less Property, then the property manager of the Property must be a Qualifying Manager;
(v) prior to any proposed transfer or sale of direct or indirect ownership interests in Borrower, as a result of which (and after giving effect to such proposed transfer or sale), a Person owning not more than 30 days 49% of the direct or indirect ownership interests in Borrower on the day prior to the commencement date of such transfer; transfer or sale shall (Cif such proposed transfer or sale occurs) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue become the owner of more than 49% of the Additional Permitted Transfer; (D) Borrower direct or indirect ownership interests in Borrower, Lender shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender have consented to such transfer or sale or if such transfer or sale occurs after a Securitization, a Rating Agency Confirmation is obtained in connection with such transfer or sale; and
(vi) with regard to any to any transfer or sale described in clause (v) above, Borrower shall give or cause to be given written notice to Lender of the Additional Permitted Transferproposed transfer or sale not later than fifteen (15) days prior thereto, whether which notice shall set forth the name of the Person to which the interest in Borrower is to be transferred or sold, identify the proposed transferee and set forth the date the transfer or sale is expected to be effective.
(d) Notwithstanding any provision in this Agreement or in any other Loan Document to the contrary, this Section 5.2.13 shall not consummated; restrict the right of (Fi) once any shareholder in AFRT or in any other Publicly Traded Corporation to transfer its shares in AFRT or in any other Publicly Traded Corporation or to cause or permit its interest in AFRT or in such other Publicly Traded Corporation to be redeemed, or (ii) any limited partner of First States Group other than AFRT to transfer its limited partnership interest in First States Group or to cause or permit its limited partnership interest in First States Group to be redeemed, or (iii) any transfer of any direct or indirect interest in Borrower by any Person other than AFRT, provided that after giving effect to such transfer either AFRT or First States Group owns not less than 100% of the Additional Permitted Transfer is complete, the persons with Control of interests in Borrower and management controls Borrower. In connection with any transfer described in this clause (d) which, as a result of which (and after giving effect to such transfer), more than 49% of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed direct or indirect ownership interests in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have been transferred to a Person not owning at least 49% of the direct or indirect ownership interests in Borrower on the Closing Date (or as reflected in the most recent additional Insolvency Opinion delivered satisfactory evidence to Lender that, following the Additional Permitted TransferLender), Borrower shall continue deliver to comply Lender an additional Insolvency Opinion which may be relied upon by Lender, the Rating Agencies and their respective counsel, successors and assigns, with respect to the provisions of Section 4.1.31 hereof. proposed transfer, which additional Insolvency Opinion shall be reasonably acceptable to Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare and, after a Securitization, the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous TransferRating Agencies.
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Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property. Notwithstanding the foregoing, for purposes hereof, a “Transfer” shall not include Permitted Transfers.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-non member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-non managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. In addition, at all times, TNP must continue to Control Borrower shall pay any and all reasonable out-of-pocket costs Manager and expenses incurred own, directly or indirectly, at least a 51% legal and beneficial interest in connection with such Transfers (including Lender’s counsel fees Borrower and disbursements and any fees and expenses of the Rating Agencies)Manager.
(e) Without limiting No Transfer of the Property and assumption of the Loan shall occur during the period that is sixty (60) days prior to and sixty (60) days after a Securitization. Otherwise, Lender’s discretion consent to approve or disapprove any request for a waiver one (1) time Transfer of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction Property and assumption of the Loan shall not be unreasonably withheld provided that Lender receives sixty (60) days prior written notice of such Transfer and no Event of Default has occurred and is continuing, and further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) If required by Lender, Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.;
(xixii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;; and
(xiixiii) If applicable, the The Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets . Immediately upon a Transfer to such Transferee and the satisfaction of all of the Lender’s underwriting standards related above requirements, the named Borrower and Guarantor herein shall be released from all liability under this Agreement, the Note, the Mortgage and the other Loan Documents accruing after such Transfer. The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to its financial condition, cash flow, operating income, physical condition, management and operationprovide written evidence thereof reasonably requested by Borrower.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
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Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent5.1.20.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with (i) one or a series of Transfers, of not more than ten up to forty-nine percent (1049%) of the stockstock in a Restricted Party, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted PartyParty (ii) any transfer to Behringer Harvard Funds or an Affiliate of Behringer Harvard Funds (iii) any transfer of an equity interest in Behringer Harvard Funds or any Affiliate thereof or the issuance of additional equity interests in Behringer Holdings or any Affiliate thereof or (iv) any transfer of a direct or indirect equity interest in Borrower to a newly formed entity formed to be the Mezzanine Borrower pursuant to Section 5.2.10(h) below; provided, however, no such Transfer shall result in the Change change of Control in Borrower, Guarantor or Property Manager. If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or cause any Key Principal to indirect interest in such Restricted Party as of the Closing Date, Borrower shall, no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice to the effective date of any such proposed Transfer. Borrower shall pay any , deliver to Lender an Additional Insolvency Opinion acceptable to Lender and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies. In addition, as a condition to any Transfer pursuant to this Section 5.2.10(d), at all times, Guarantor must continue to Control Borrower and own, directly or indirectly, at least a 51% legal and beneficial interest in Borrower.
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its No consent to any waiver of a prohibited Transfer upon satisfaction assumption of the Loan shall occur on or before the first (1st) anniversary of the first (1st) Payment Date. Thereafter, Lender’s consent to Transfers of the Property shall not be unreasonably withheld provided that Lender receives sixty (60) days prior written notice of such Transfer and no Event of Default has occurred and is continuing, and further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one-quarter of one percent (10.25%) of the outstanding principal balance of the Loan at the time of the first such transfertransfer and a transfer fee equal to one-half of one percent (0.5%) of the outstanding principal balance of the Loan at the time of each subsequent transfer (provided that no transfer fee shall be payable in connection with any transfer to Behringer Harvard Funds or an Affiliate of Behringer Harvard Funds);
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 4.1.30 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, agreements and covenants and legal opinions reasonably required by Lender;
(x) Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender;
(xii) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity and any Guaranty of Payment executed by Guarantor or execute a replacement guaranty and guaranty, environmental indemnity and Guaranty of Payment reasonably satisfactory to Lender.Lender (provided that with respect to a Guaranty of Payment any substitute guarantor shall be subject to the net worth requirement set forth in Section 7.5.3 hereof unless otherwise agreed to by Lender in its sole discretion);
(xixiii) Borrower or Transferee shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the other Permitted Encumbrances;; and
(xiixiv) If applicable, the The Property shall be managed by Qualified a Qualifying Property Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets . Immediately upon a Transfer to such Transferee and the satisfaction of all of the Lender’s underwriting standards related above requirements, the named Borrower and Guarantor herein shall be released from all liability under this Agreement, the Note, the Mortgage and the other Loan Documents accruing after such Transfer. The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to its financial condition, cash flow, operating income, physical condition, management and operationprovide written evidence thereof reasonably requested by Borrower.
(f) Notwithstanding any provision Borrower, without the consent of Lender, may grant easements, restrictions, covenants, reservations and rights of way in this Section 5.2.10 to the contraryordinary course of business for water and sewer lines, limited partnership telephone and telegraph lines, electric lines and other utilities or membership interestsfor other similar purposes, as applicableprovided that no transfer, in Borrower may be transferred without Lender’s consent conveyance or encumbrance shall materially impair the utility and without application operation of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners Property or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as materially adversely affect the value of the date Property or the Net Operating Income of this Agreement (each a “Current Owner”)the Property. If Borrower shall receive any consideration in connection with any of said described transfers or conveyances, Borrower shall have the right to use any such proceeds in connection with any alterations performed in connection therewith, or required thereby. In connection with any transfer, conveyance or encumbrance permitted above, the Lender shall execute and (ii) deliver any instrument reasonably necessary or appropriate to immediate family members (which shall be limited evidence its consent to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner said action or to trusts formed for subordinate the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each Lien of the following conditions is satisfiedrelated Mortgage to such easements, restrictions, covenants, reservations and rights of way or other similar grants upon receipt by the Lender of: (A) no Default or Event a copy of Default has occurred the instrument of transfer; and is continuing; (B) Lender has received Borroweran Officer’s notice of Certificate stating with respect to any transfer described above, that such transfer does not materially impair the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs utility and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management operation of the Property are or materially reduce the same persons who have such Control and management rights immediately prior to value of the Additional Permitted Transfer; Property or the Net Operating Income of the Property.
(Gg) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
(h) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with Transfers in the nature of a pledge by a Mezzanine Borrower (as defined below) of its direct and/or indirect equity interest in Borrower (but not of any direct interest in the Property) to a Permitted Mezzanine Lender (defined below) as security for a loan to such Mezzanine Borrower (a “Mezzanine Loan”) provided that the following terms and conditions are satisfied:
(i) no Event of Default shall then exist;
(ii) Lender shall have received at least thirty (30) and no more than sixty (60) days’ prior written notice of the proposed Mezzanine Loan;
(iii) the aggregate amount of the Loan and the Mezzanine Loan (as of the effective date of the Mezzanine Loan) shall not exceed eighty percent (80%) of the fair market value of the Property as determined by an independent MAI appraisal dated not more than ninety (90) days prior to the effective date of the Mezzanine Loan and otherwise acceptable to Lender;
(iv) the aggregate Debt Service Coverage Ratio of the Loan and such Mezzanine Loan is at least 1.20 to 1.0;
(v) Borrower shall not be obligated to repay the Mezzanine Loan nor incur any obligation or liability to the Permitted Mezzanine Lender or any other Person with respect to the Mezzanine Loan, and the terms and conditions of the Mezzanine Loan, the collateral pledged as security therefor, and the documents evidencing the Mezzanine Loan, shall be satisfactory to Lender;
(vi) a new Single Purpose Entity shall have been formed that will directly or indirectly own 100% of the Equity Interests in Borrower and Principal (the “Mezzanine Borrower”), the organizational documents of Borrower, such Mezzanine Borrower, and their respective constituent owners shall be satisfactory to Lender, and Borrower and such Mezzanine Borrower shall otherwise satisfy all applicable Rating Agency criteria for single-purpose entities, bankruptcy remoteness, and mezzanine borrowers;
(vii) the Permitted Mezzanine Lender shall have executed and delivered to Lender an intercreditor agreement acceptable to Lender in its sole and absolute discretion, provided that Lender’s approval of such intercreditor agreement shall not be unreasonably withheld, conditioned or delayed so long as it is otherwise in conformance with Rating Agency approved forms for intercreditor agreements (except that Lender shall not be required to use any Rating Agency approved form of intercreditor agreement if the Permitted Mezzanine Lender is an Affiliate of Borrower);
(viii) Borrower, Principal and Guarantor shall have executed such additional Loan Documents and such amendments to and reaffirmations of the existing Loan Documents as Lender may require, including entering into a cash management arrangement with Lender (or modifying any existing cash management requirement) to provide for, among other things, the payment of Lender-approved operating expenses and capital expenses prior to the payment of debt service on the Mezzanine Loan;
(ix) the lender under the Mezzanine Loan shall be either (A) any person or entity satisfying the definition of “Qualified Transferee” under clause (ii) of the definition of “Qualified Transferee” set forth in the form Intercreditor Agreement attached as Appendix VI to the Standard & Poor’s U.S. CMBS Legal and Structural Finance Criteria published May 1, 2003, based on the default values for minimum total assets and capital/statutory surplus or shareholders’ equity included in the definition of “Eligibility Requirements” in such publication or (B) a
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower Borrower, Master Tenant and its and Master Tenant’s stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit Master Tenant or any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and 5.1.20, (B) Hotel Transactions, and (C) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower or Master Tenant agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-non member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-non managing membership interests or the creation or issuance of new non managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding anything to the provisions of this Section 5.2.10, contrary contained in the Loan Documents.
(i) Lender’s consent shall not be required in connection with one (1) or a series of Transfers, Transfers of not more than ten up to forty-nine percent (1049%) in the aggregate of the stock, the limited partnership direct or indirect ownership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a any Restricted Party or cause any Key Principal to provided that (a) no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise have occurred and remain uncured or would occur as a result of such Transfer, and Transferee and Transferee’s Principals (b) such Transfer shall deliver not (Ai) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory cause the transferee (together with its Affiliates) to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to acquire Control of any release of Restricted Party unless such transferee is Guarantor, (ii) result in any Restricted Party that is as of the Closing Date controlled by Guarantor no longer being controlled by Guarantor, 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) the Property shall continue to be managed by Manager or a Qualified Manager, (d) after giving effect to such Transfer, Guarantor shall continue to own, directly or indirectly, at least fifty-one percent (151%) of all legal, beneficial and economic interests in each of Borrower and Master Tenant, (e) if, immediately following such Transfer, the transferee owns ten percent (10%) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations direct or indirect ownership interests in Borrower or Master Tenant then, to the extent such transferee did not own ten percent (10%) or more of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor direct or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) indirect ownership interests in Borrower or Master Tenant on the Closing Date, Borrower shall deliver, or cause to be delivered, at its Borrower’s sole cost and expense, an endorsement such searches (including credit, negative news, OFAC, litigation, judgment, lien and bankruptcy searches) as Lender may reasonably require with respect to such transferee and its Controlling Persons, the results of which must be reasonably acceptable to Lender (unless such transferee 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 5.2.10(d) shall be satisfied to the Title Insurance Policyextent 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), and (g) the legal and financial structure of Borrower, Master Tenant and their respective stockholders, members or partners, as modified by applicable, and the assumption agreementsingle purpose nature and bankruptcy remoteness of Borrower, Master Tenant and their respective stockholders, members or partners, as a valid first lien on applicable, after such Transfer, shall satisfy Lender’s then current applicable underwriting criteria and requirements. Notwithstanding anything in this Section 5.2.10(d) to the Property contrary, and naming the Transferee as owner without limiting any of the Propertyforegoing requirements of this Section 5.2.10(d), which endorsement shall insure thatif 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 the recording any such Transfer, deliver (or cause to be delivered) to Lender a non-consolidation opinion letter acceptable to Lender and delivered by counsel reasonably satisfactory to Lender; and
(ii) The sale, conveyance, transfer, disposition, alienation, hypothecation, pledge or encumbering of all or any portion of the assumption agreementdirect or indirect ownership interests in M▇▇▇▇ REIT II (each a “Permitted REIT Transfer”) shall be permitted at any and all times without (1) Lender’s consent, (2) notice to Lender, or (3) the Property shall not be subject payment of any fee, premium, penalty or other payment to any additional exceptions or liens Lender other than those contained payment of Lender’s actual out-of-pocket expenses, if any, provided, however, that upon completion of such Permitted REIT Transfer (a) except with the Lender’s prior written consent, M▇▇▇▇ REIT II is a Reporting Company, (b) there is no change of Control of Borrower, Master Tenant, Principal or M▇▇▇▇ REIT II, (c) no Person together with such Person’s Affiliates, other than the Key Principal and his Affiliates, owns more than forty-nine percent (49%) of the direct or indirect ownership interests in M▇▇▇▇ REIT II, (d) M▇▇▇▇ REIT II continues to own, directly or indirectly, at least seventy-five percent (75%) of the Title Insurance Policy issued on ownership interests in MNOP II and MNOP II continues to own, directly or indirectly, one hundred percent (100%) of the date hereof ownership interests in Borrower and Master Tenant, and (e) if the Franchise Agreement will be terminated as a result of any such Permitted Encumbrances;
(xii) If applicableREIT Transfer, the Property shall be managed by Qualified Manager pursuant to operated in accordance with a Replacement Management Franchise Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(fe) Notwithstanding any provision For the avoidance of doubt, and notwithstanding anything in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or membersMNOP II must, as applicableat all times, own 100% of the direct equity interests in each of Borrower who are limited partners or membersand MN L▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ MT, as applicableInc., of Borrower as a Delaware corporation, (ii) MN L▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ MT, Inc., a Delaware corporation, must, at all times, own 100% of the date of this Agreement (each a “Current Owner”)direct equity interests in Master Tenant, and (iiiii) M▇▇▇▇ REIT II continues to immediate family members own, directly or indirectly, at least seventy-five percent (which 75%) of the ownership interests in MNOP II.
(f) Borrower, without the consent of Lender, may grant easements, restrictions, covenants, reservations and rights of way in the ordinary course of business for water and sewer lines, telephone and telegraph lines, electric lines and other utilities or for other similar purposes, provided that no transfer, conveyance or encumbrance shall be limited materially impair the utility and operation of the Property or materially adversely affect the value of the Property or the Net Operating Income of the Property. If Borrower shall receive any consideration in connection with any of said described transfers or conveyances, provided no Event of Default then exists, Borrower shall have the right to a spouseuse any such proceeds in connection with any alterations performed in connection therewith, parentor required thereby. In connection with any transfer, child conveyance or encumbrance permitted above, Lender shall, unless it reasonably determines that the foregoing conditions have not been satisfied, execute and grandchild (each, an “Immediate Family Member”)), of deliver any Current Owner instrument reasonably necessary or appropriate to evidence its consent to said action or to trusts formed for subordinate the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each Lien of the following conditions is satisfiedSecurity Instrument to such easements, restrictions, covenants, reservations and rights of way or other similar grants upon receipt by the Lender of: (A) no Default or Event a copy of Default has occurred the instrument of transfer; and is continuing; (B) Lender has received Borroweran Officer’s notice Certificate stating with respect to any transfer described above, that such transfer does not materially impair the utility and operation of the Additional Permitted Transfer no less than 30 days prior to Property or materially reduce the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue value of the Additional Permitted Transfer; (D) Property or the Net Operating Income of the Property. Borrower shall be responsible for the costs and expenses pay all of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and Lender’s reasonable expenses incurred by Lender in connection with the Additional Permitted Transferforegoing including, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower reasonable attorney’s fees and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. expenses Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals members and (if Borrower is a trust) beneficial owners owners, as applicable, and principals of Borrower in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of Lender, and except Except (i) to the extent otherwise set forth in this Section 5.2.10, (ii) with respect to the release of one or more Individual Properties or any portion thereof (and related collateral) in accordance with this Agreement and (iii) to the extent such Transfer constitutes a Permitted Transfer or Permitted Debt, without the prior written consent of Lender, Borrower shall not, not and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (ix) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant purchase options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Individual Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan therein, (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (iiy) permit a Sale or Pledge of an interest in any Restricted PartyParty or (z) Borrower entering into, other than or causing the Property to be subject to, any PACE Debt. Any Transfer made without Lender’s prior written consent (A) to the extent that such consent is required pursuant to Leases this Section 5.2.10) shall be null and void. Notwithstanding anything to the contrary contained herein, Lender’s receipt of space a Rating Agency Confirmation shall not be required in connection with any Transfer that is permitted hereunder, including, without limitation, any Permitted Transfer, Permitted Assumption, Controlling Interest Transfer or Public Sale or the Improvements to Tenants replacement of any Guarantor or Ancillary Guarantor in connection therewith that is consummated in accordance with the provisions terms of Section 5.1.20 this Agreement and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any the terms of the foregoing without Lender's prior written consentGuaranty or Ancillary Guaranty, as applicable.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the an Individual Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or substantially all of an Individual Property to a substantial part of the Property third party for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any Division, merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venturepartnership, any Division, merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any Division, merger or consolidation or the change, removal, resignation or addition of a managing member or non-member a non‑member manager (other than an Independent Director or if no managing member, any memberIndependent Manager that is a springing member in accordance with the terms and conditions hereof) or the Sale or Pledge of the membership interest of a managing member (other than an Independent Director or if no managing member, any memberIndependent Manager that is a springing member in accordance with the terms and conditions hereof) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent 5.2.10 the following Transfers shall not be require any notice to Lender (unless Borrower is required to deliver any Additional Insolvency Opinion or satisfy any “know your customer” compliance screening as expressly required below) or the consent of Lender or the payment of any transfer fee:
(i) The Sale or Pledge, in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership direct or indirect equity interests in Borrower or non-managing membership direct or indirect interests (as the case may be) in a any Restricted Party; provided, howeverthat, no (A) after giving effect to such Transfer shall result Sale or Pledge (and in the Change case of a Sale or Pledge that is a pledge for security purposes otherwise permitted hereunder, any subsequent foreclosure thereon (other than a Pledge Foreclosure)), one or more Approved Control in a Restricted Party Party(ies) (x) shall individually or cause any Key Principal collectively, directly or indirectly, own the applicable Required Ownership Interest, and (y) shall individually or collectively, directly or indirectly, Control Borrower and Mezzanine Borrower, (B) intentionally omitted, (C) intentionally omitted, (D) no Individual Borrower or SPE Constituent Entity shall fail to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice Special Purpose Entity by reason of such proposed Transfer. Borrower Sale or Pledge, (E) for so long as the Loan or any Mezzanine Loan shall pay remain outstanding (I) no pledge of any and all reasonable out-of-pocket costs and expenses incurred direct interests in connection with such Transfers any Restricted Pledge Party shall be permitted (including Lender’s counsel fees and disbursements and any fees and expenses other than pledges securing the Loan or a New Mezzanine Loan), except that a pledge of the Rating Agencies).
direct ownership interests in any Restricted Pledge Party (e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver other than pledges of the prohibition against Transfersdirect ownership interests in Borrower (or, Lender specifically reserves the right to condition its consent to if any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(iMezzanine Loan is outstanding, any Mezzanine Borrower)) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of permitted if such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled pledge directly or indirectly secures indebtedness that is also directly or indirectly secured by Transferee’s Principals substantial assets other than the Properties and (“Related Entities”II) must not have been party no Restricted Pledge Party shall issue preferred equity that is substantially similar to any bankruptcy proceedingsmezzanine debt (such as preferred equity which has a fixed maturity date, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date pledged ownership interests as security and rights of the proposed Transfer;
equity holder to demand repayment of its investment on such maturity date) and (viF) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31transferee that, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, will hold a twenty percent (20%) or greater direct or indirect interest in, or Control, Borrower (and Transferee such transferee owned less than twenty percent (20%) of the direct or indirect interest in Borrower or did not Control Borrower immediately prior to such Transfer), Lender shall receive notice of such transfer (provided, however, the failure to provide such notice shall not constitute an Event of Default) and Transferee’s Principals shall receive KYC Searches with respect to such transferee. Notwithstanding anything to the contrary contained in the Loan Documents, no notice to or consent of Lender shall be required in connection with (i) any foreclosure of any pledge of an indirect equity interest in Borrower or (ii) the exercise of remedies or acquisition of Control by a provider of preferred equity or debt to an indirect owner of Borrower, in each case, that is permitted by this Agreement (a “Pledge Foreclosure”) that may or may not result in a change of Control of Borrower and no assumption fee shall be payable in connection therewith; provided that (x) the foreclosing party or the party acquiring Control of Borrower or exercising remedies is an Eligible Assignee that is able to remake the applicable representations set forth in Section 4.1.35 and is able to comply with Borrowers’ covenants set forth in Section 5.1.27 and (y) Lender shall receive notice of such transfer (provided, however, the failure to provide such notice shall not constitute an Event of Default) and shall have the right to receive the KYC Searches with respect to any Person that holds a twenty percent (20%) or greater direct or indirect interest in, or Controls, Borrower following such Pledge Foreclosure (and such transferee owned less than twenty percent (20%) of the direct or indirect interest in Borrower or did not Control Borrower immediately prior to such Pledge Foreclosure). If after giving effect to any such sale, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in Borrower and/or any SPE Constituent Entity are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in Borrower and/or such SPE Constituent Entity, as applicable, as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and, following a Rated Securitization, the Rating Agencies. Notwithstanding anything to the contrary contained in this Agreement, (Ax) no notice to, or consent of, Lender shall be required in connection with any Sale or Pledge of direct or indirect interests in any Excluded Entity or by and among any Excluded Entity and (y) subject to sub-clause (I) above, no Restricted Pledge Party (other than Borrower or a New Mezzanine Borrower) shall be restricted from any Sale or Pledge of its direct or indirect assets; provided such direct or indirect assets are not encumbered (or required to be encumbered) by the Loan or the Mezzanine Loan. In connection with a Controlling Interest Transfer or any other Transfer (including, for the avoidance of doubt, without limitation, a Pledge Foreclosure), the result of which is that Guarantor or any Ancillary Guarantor, as applicable, no longer owns a direct or indirect interest in or is no longer an Affiliate of Borrower (individually or collectively as the context requires, the “Exiting Guarantor”), Exiting Guarantor shall be released as a guarantor under the (I) Guaranty for any acts occurring from and after such Transfer; provided that a Guaranty Assumption occurs with respect to the Guaranty (the “Non-Recourse Assumption”), (II) Rate Cap Reserve Guaranty (if any) provided that (x) Borrower shall pay to Lender an amount equal to all organizational documentation reasonably requested amounts guaranteed under the Rate Cap Reserve Guaranty as of such date which amounts shall be deposited by LenderLender into the Rate Cap Reserve Account or (y) a Guaranty Assumption occurs with respect to the Rate Cap Reserve Guaranty (the “Rate Cap Guaranty Assumption”), (III) Alterations Guaranty (if any), provided that (x) Borrower shall pay to Lender an amount equal to all amounts guaranteed under the Alterations Guaranty as of such date which amounts shall be held by Lender as the Alterations Deposit or (y) a Guaranty Assumption occurs with respect to the Alterations Guaranty (the “Alterations Guaranty Assumption”), (IV) Excess Cash Flow Guaranty (if any), provided that (x) Borrower shall pay to Lender an amount equal to all amounts guaranteed under the Excess Cash Flow Guaranty as of such date which amounts shall be deposited by Lender into the Excess Cash Flow Reserve Account or (y) a Guaranty Assumption occurs with respect to the Excess Cash Flow Guaranty (the “Excess Cash Flow Guaranty Assumption”), and (V) Debt Yield Trigger Cure Guaranty (if any), provided that, at the election of Borrower, (v) Borrower shall pay to Lender an amount equal to all amounts guaranteed under the Debt Yield Trigger Cure Guaranty as of such date (the “DY Guaranty Amount”) to be applied as a prepayment of the Loan, (w) Borrower shall pay to Lender an amount equal to the DY Guaranty Amount to be held by Lender as Debt Yield Cure Collateral in accordance with the definition thereof, (x) Borrower delivers to Lender a Letter of Credit in an amount equal to the DY Guaranty Amount to be held by Lender as Debt Yield Cure Collateral in accordance with the definition thereof, (y) Borrower shall pay to Lender an amount equal to the DY Guaranty Amount which shall be reasonably satisfactory deposited by Lender into the Cash Management Account at which point a Debt Yield Trigger Event shall be deemed to Lender exist until a Debt Yield Trigger Event Cure has taken place or (z) a Guaranty Assumption occurs with respect to the Debt Yield Trigger Cure Guaranty (the “Debt Yield Trigger Cure Guaranty Assumption”) and (BVI) all certificatesDeductible Guaranty (if any), agreementsprovided that, covenants and legal opinions reasonably required by Lender;
at the election of Borrower, (x) Prior Borrower obtains and maintains insurance coverage sufficient to any meet the requirements of Section 6.1(a)(i)(C) in which case the Deductible Guaranty will automatically terminate in accordance with Section 1.4 thereof or (y) a Guaranty Assumption occurs with respect to the Deductible Guaranty (the “Deductible Guaranty Assumption”) with the conditions set forth in clauses (I) through (VI) above shall be referred to herein as the “Guaranty Release Conditions”, and the release of Guarantor, one (1) the applicable Guarantor or more substitute guarantors acceptable Ancillary Guarantor shall be referred to Lender herein as the “Guarantor Release”. Each Guarantor Release shall have assumed all be effective automatically upon satisfaction of the liabilities and obligations of Guarantor under the applicable Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory Release Conditions, but Lender agrees to Lender.
(xi) Borrower shall deliverprovide written evidence thereof, at its Borrower’s sole cost and expense, an endorsement if the same is reasonably requested by Borrower.
(ii) A Public Sale; provided that (A) if after giving effect to any such Public Sale, more than forty-nine percent (49%) in the Title Insurance Policyaggregate of the direct or indirect interests in Borrower and/or any SPE Constituent Entity are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) of the direct or indirect interest in Borrower and/or such SPE Constituent Entity, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure thatapplicable, as of the date of Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and, to the recording of the assumption agreementextent a Rated Securitization has occurred, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicableRating Agencies, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice Borrower and any SPE Constituent Entity shall not fail to be a Special Purpose Entity by reason of the Additional Permitted Transfer no less than 30 days prior such Public Sale and (C) with respect to the commencement any transferee that, as a result of such transfer; , will hold a twenty percent (C20%) no indemnitor or Guarantor shall be released from any guaranty greater direct or indemnity agreement by virtue indirect interest in, or Control, Borrower (and such transferee owned less than twenty percent (20%) of the Additional Permitted Transfer; (D) direct or indirect interest in Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) or did not Control Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower such Public Sale), Lender shall furnish Lender copies receive KYC Searches with respect to such transferee. Upon completion of any documentation executed such Public Sale subject to and in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply accordance with the provisions of this Section 4.1.31 hereof5.2.10(d)(ii), Borrower shall have the right to cause the Non-Recourse Assumption, the Rate Cap Guaranty Assumption, the Alterations Guaranty Assumption, the Excess Cash Flow Guaranty Assumption, the Debt Yield Trigger Cure Guaranty Assumption and/or the Deductible Guaranty Assumption and each Guarantor Release shall be effective automatically upon satisfaction of the applicable Guaranty Release Conditions and Lender agrees to provide written evidence of such Guarantor Release if the same is reasonably requested by Borrower. Lender Following any Transfer in accordance with this Section 5.2.10(d)(ii), the Qualified Public Company shall be deemed to be an Excluded Entity. For purposes of clarity, the provisions of Section 5.2.3 and this Section 5.2.10 shall not restrict the Qualified Public Company or Public Vehicle (or any direct or indirect owner of the Qualified Public Company or Public Vehicle, but excluding any Borrower, any New Mezzanine Borrower or any SPE Constituent Entity) from effectuating a restructuring and such Qualified Public Company or Public Vehicle (or any direct or indirect owner of the Qualified Public Company or Public Vehicle, but excluding any Borrower, any New Mezzanine Borrower or any SPE Constituent Entity) shall be permitted to effectuate a restructuring, including amending or modifying its organizational documents, intercompany commercial arrangements or governance including any amendments or modifications reasonably determined by such Qualified Public Company or Public Vehicle to be required to demonstrate any actual impairment of its security satisfy stock exchange, quotation system listing or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.tradi
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender L▇▇▇▇▇ has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on BorrowerB▇▇▇▇▇▇▇’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender L▇▇▇▇▇ has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender L▇▇▇▇▇ can recover the Debt by a sale of the Property.
(b) Without the prior written consent of LenderL▇▇▇▇▇, not to be unreasonably withheld, delayed or conditioned, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof (except in connection with any Condemnation) or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 hereof and (B) Permitted Transfers. For the avoidance of doubt, in no event shall the Transfers described in clauses (a), (b), (c), (d), (g), (h) or (iiij) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without definition of “Permitted Transfers” set forth in Section 1.1 hereof require consent by Lender or, except as otherwise expressly required hereunder, notice to Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, BorrowerB▇▇▇▇▇▇▇’s right, title and interest in and to any Leases or any RentsRents or any Property Documents; (iii) if a Restricted Party is a corporation, any merger, consolidation division into two (2) or more legal entities or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation consolidation, division into two (2) or more legal entities or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation consolidation, division into two (2) or more legal entities or the change, removal, resignation or addition of a managing member or non-member nonmember manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing nonmanaging membership interests or the creation or issuance of new non managing nonmanaging membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation consolidation, division into two (2) or more legal entities or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent Manager (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof; or (viii) Borrower entering into or affirmatively consenting to any P▇▇▇ ▇▇▇▇.
(d) Notwithstanding the provisions of this Section 5.2.10, LenderL▇▇▇▇▇’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership direct or indirect ownership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a Restricted Party Borrower or cause any Key Principal to no longer be a Key Principal of BorrowerGuarantor, and as a condition to each such Transfer that results in the transferee, if such transferee is a non-U.S. Person, owning ten percent (10%) or more of the direct or indirect ownership interests in a Borrower or, if such transferee is a U.S. Person, owning twenty percent (20%) or more of the direct or indirect ownership interests in a Borrower (which such transferee did not own 10% or more (if a non-U.S. Person) or 20% of more (if a U.S. Person) of the direct or indirect ownership interests in a Borrower prior to such Transfer), Lender (i) Borrower shall receive provide to Lender, not less than thirty ten (3010) days prior written notice to such transfer, the name and identity of each proposed transferee, together with the names of its controlling principals, the social security number (if applicable) or employee identification number (if applicable) of such transferee and controlling principals (if applicable), and such transferee’s and, if applicable, controlling principal’s home address or principal place of business, and home or business telephone number (if applicable) and (ii) Lender shall have received Satisfactory Search Results with respect to the proposed transferee and such controlling principals, if applicable; provided, further, however, the foregoing clause (i) and (ii) shall not be applicable in connection with any transfer (or pledging) of stock or membership interests in any publicly-held corporation or other publicly-held entity (in each case) which is listed on the New York Stock Exchange, the NASDAQ Global Select Market or another nationally-recognized stock exchange, or transfer or issuance of securities of the REIT provided that such securities are listed on the New York Stock Exchange, the NASDAQ Global Select Market or another nationally recognized stock exchange. If as a result of such Transfer, more than forty-nine percent (49%) of the direct or indirect ownership interests in Borrower or Guarantor are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) of the aggregate direct or indirect ownership interests in Borrower or Guarantor as of the Closing Date, and if such Persons are not already included in the pairings of the Insolvency Opinion most recently delivered in connection with the Loan, Borrower shall, no less than ten (10) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and (if a Securitization has occurred) the Rating Agencies (which Additional Insolvency Opinion may be on the same form as the Insolvency Opinion provided on the date hereof). Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies). In addition, at all times (other than in connection with a Mezzanine Control Event), Guarantor (or a Qualified Equity Holder) must continue to Control Borrower, and own, directly or indirectly, at least a 51% legal and beneficial interest in Borrower.
(e) Without limiting Lender’s discretion Notwithstanding anything to approve or disapprove any request for a waiver of the prohibition against Transferscontrary contained in this Section 5.2.10, Lender specifically reserves the right to condition shall not unreasonably withhold its consent to any waiver of a prohibited Transfer upon satisfaction sale, assignment, or other transfer of the Property (or such Property remaining after any releases of Individual Properties pursuant to Section 2.5.2 hereof) and the assumption of the Loan by the applicable Transferee provided that (i) Lender receives prior written notice of such transfer, (ii) no Event of Default has occurred and is continuing both at the time such notice is given and as of the closing date of such transaction, (iii) no such sale, assignment or other transfer of the Property shall occur on or prior to the Permitted Prepayment Date (or prior to the date that is ninety (90) days following minimum conditions:the Permitted Prepayment Date, if Lender delivers a written notice to Borrower on or prior to the Permitted Prepayment Date stating that a Securitization is imminently pending), and (iv) the following conditions precedent are satisfied (or waived in writing by L▇▇▇▇▇ or Servicer):
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) $200,000.00 for each such Transfer resulting in the assumption of the outstanding principal balance of the Loan at the time of such transferLoan;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, Transfer (including LenderL▇▇▇▇▇’s outside counsel reasonable fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals (directly or indirectly) must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the each Individual Property (or deliver evidence that they will engage a Qualified Manager to manage each Individual Property), which expertise shall be reasonably determined by LenderL▇▇▇▇▇;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender; with the understanding that if Transferee and Transferee’s Principals would otherwise satisfy the Qualified Replacement Guarantor or Qualified Equity Holder Thresholds, as the case may be, then this clause (iv) shall be deemed satisfied;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner reasonably satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance reasonably satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened in writing against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender in its reasonable discretion and Lender shall have performed searches and/or received other diligence such that Lender is in compliance with Lender’s then current “know your customer” requirements and shall have received Satisfactory Search Results for any owner of Transferee which, if a non-U.S. Person, will own a 10% or greater equity interest (directly or indirectly) in Borrower or, if a U.S. Person, will own a 20% or greater equity interest (directly or indirectly) in Borrower, after giving effect to such transfer;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to LenderLender in its reasonable discretion;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by LenderL▇▇▇▇▇, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by LenderL▇▇▇▇▇;
(x) If required by Lender (and if a Securitization has occurred), Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender; with the understanding that a substitute guarantor that qualifies as a Qualified Replacement Guarantor will be acceptable to Lender.
(xixii) Borrower shall deliver, at its sole cost and expense, an endorsement (or equivalent) to the each Title Insurance PolicyPolicy insuring the Security Instruments, as modified by the assumption agreement, as a valid first lien liens on the each Individual Property and naming the Transferee as owner of the each Individual Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the that each Individual Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy Policies issued on the date hereof and the Permitted Encumbrances;
(xiixiii) If applicable, the Each Individual Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiiixiv) The Property meets all of the If requested by L▇▇▇▇▇, Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, direct or indirect limited partnership partnership, membership or membership other equity interests, as applicable, in Borrower a Restricted Party may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among direct or indirect limited partners or membersmembers or other equity owners, as applicable, of Borrower a Restricted Party who are direct or indirect limited partners or membersmembers or other equity owners, as applicable, of Borrower a Restricted Party as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer, if required by clause (J) below; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with will not result in a change of Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted TransferBorrower; (G) upon L▇▇▇▇▇’s request, Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Transfer shall not cause Borrower shall continue to comply with violate any of the provisions of Section 4.1.31 hereof. Lender 4.1.30 hereof and, upon L▇▇▇▇▇’s request, Borrower shall not be required deliver a written certification of such compliance to demonstrate Lender; (I) intentionally omitted; (J) in connection with any actual impairment of its security or any increased risk of default hereunder Additional Permitted Transfer that results in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or nottransferee, or whether or not Lender has consented to any previous Transfer.i
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined Each Holder, severally and relied on the experience of Borrower and its stockholdersnot jointly, general partnershereby agrees, members, Key Principals and (if Borrower while this Agreement is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loaneffect, and will continue except as contemplated hereby or pursuant to rely on Borrower’s ownership and control the Merger Agreement, not to sell, transfer, pledge, encumber, assign or otherwise dispose of, enforce or permit the execution of the Property as provisions of any redemption, share purchase or sale, recapitalization or other agreement with the Company or enter into any contract, option or other arrangement or understanding with respect to or consent to the offer for sale, sale, transfer, pledge, encumbrance, assignment or other disposition of, any of such Holder’s Warrants or Shares or any interest in such Holder’s Warrants or Shares, in each case including by merger or otherwise by operation of law, except (i) to Parent or Merger Sub, (ii) to a means of maintaining the value third-party which executes a joinder agreement, in form and substance reasonably satisfactory to Parent, to be bound by each of the Property terms of this Agreement as security for repayment if a party hereto, (iii) with the prior written consent of the Debt and the performance Parent or (iv) in accordance with Section 2.3(b). The Company shall not recognize any purported transfer of the Other Obligations. Borrower acknowledges that Lender has a valid interest Warrants or Shares in maintaining the value violation of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Propertythis Agreement.
(b) Without Notwithstanding the prior written consent foregoing, this Agreement shall not restrict the Holders from selling Shares for value (x) in market transactions or (y) in Restricted Size Private Transactions. For purposes of Lenderthis Agreement, the term “Restricted Size Private Transactions” shall mean privately negotiated sales of Common Stock by one or more Holders to a purchaser which, when aggregated with other such sales by the Holders to such purchaser and except each “affiliate” (as such term is defined in Rule 405 of the Securities and Exchange Commission) of such purchaser on or after the date hereof, do not involve more then 2,500,000 shares of Common Stock (as adjusted for any subsequent stock split, stock dividend, recapitalization or similar transaction). For avoidance of doubt, no purchaser pursuant to the extent otherwise set forth in this Section 5.2.10, Borrower 2.3(b) shall not, and shall not permit any Restricted Party be subject to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies)Agreement.
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest therein, other than pursuant to Leases of Borrower space in the Loan (including any Improvements to tenants in accordance with the provisions of its rightsSection 5.1.20, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an any direct or indirect interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business Borrower or other entity or provide in its operating agreement for Restricted Party (any of the foregoing without Lender's prior written consentacts set forth in clause (i) or (ii) being referred to herein collectively as a “Transfer”) except as permitted under, and subject to the satisfaction of the conditions set forth in, Section 5.2.10(d) below.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, the following transfers shall not be deemed to be a Transfer and may occur without the consent of Lender or the payment of any transfer or other fee: Transfers of direct and/or indirect interests in Borrower and in its constituent partners, stockholders, members and beneficiaries (including transfers between and among such Persons), provided that (i) FelCor OP must continue to control, directly or indirectly, each Borrower and each Principal and own, directly or indirectly, on an unencumbered basis (subject to Section 5.2.10(f) below), at least fifty-one percent (51%) of the equity and economic interests in each Borrower, (ii) FelCor REIT must at all times be the sole general partner of and control FelCor OP and continue to own, directly or indirectly, at least eighty percent (80%) of the equity and economic interests in FelCor OP, (iii) each Borrower shall remain, directly or indirectly, on an unencumbered basis (subject to Section 5.2.10(f) below), under 100% common ownership and control by FelCor OP, (iv) Lender receives prior written notice of any such transfer and copies of the documents transferring such interest, provided that the foregoing requirement set forth in this subsection (iv) shall not be applicable in the case of transfers of limited partnership interests in FelCor OP or of publicly traded stock in FelCor REIT, and (v) if after such transfer any Person and its Affiliates collectively owns more than forty-nine (49%) in the aggregate of the direct and/or indirect interests of Borrower and as of the Assumption Date such Person and its Affiliates collectively owned forty-nine percent (49%) or less in the aggregate of the direct and/or indirect interests of Borrower, Lender shall have received an Additional Insolvency Opinion reasonably satisfactory to Lender and the Rating Agencies.
(e) Notwithstanding the other provisions of this Section 5.2.10, Transfers of one hundred percent (100%) of the direct and/or indirect interests in Borrower or transfers of the Property, shall be permitted with Lender’s prior written consent, which consent shall not be required unreasonably withheld after consideration of all relevant factors and provided that Borrower satisfies the following conditions:
(i) no Event of Default has occurred and is continuing;
(ii) the proposed transferee (“Transferee”) shall be a reputable entity or person of good character, creditworthy, and shall have sponsorship with sufficient financial worth considering the obligations assumed and undertaken, as evidenced by financial statements and other information reasonably requested by Lender;
(iii) the Transferee or its sponsor and its property manager shall have sufficient experience in connection the ownership and management of properties similar to the Property, and Lender shall be provided with reasonable evidence thereof (and Lender reserves the right to approve the Transferee without approving the substitution of the property manager);
(iv) if a Securitization has occurred, confirmation in writing from the Rating Agencies to the effect that such transfer will not result in a re-qualification, reduction or withdrawal of the then current rating assigned to the Securities or any class thereof in any applicable Securitization;
(v) Lender shall have received evidence reasonably satisfactory to it (which shall include a legal non-consolidation opinion reasonably acceptable to Lender) that the single purpose nature and bankruptcy remoteness of Transferee following such transfers are in accordance with the standards of the Rating Agencies;
(vi) the Transferee shall have executed and delivered to Lender an assumption agreement in form and substance reasonably acceptable to Lender, evidencing such Transferee’s agreement to abide and be bound by the terms of the Note, the Mortgage and the other Loan Documents, together with such legal opinions and title insurance endorsements as may be reasonably requested by Lender;
(vii) Lender shall have received from Borrower or Transferee on or prior to the date of the sale or transfer (A) an assumption fee equal to one or a series of Transfers, of not more than ten percent (101.0%) of the stockLoan amount, (B) a rating confirmation fee for each of the limited partnership interests or nonRating Agencies delivering a confirmation pursuant to clause (iv) above, which confirmation fees shall be equal to the then customary fees charged by each applicable Rating Agency for such a confirmation and (C) the payment of all out-managing membership interests of-pocket third-party costs and expenses incurred by Lender, Servicer and the Rating Agencies in connection with such assumption (as the case may beincluding reasonable attorneys’ fees and costs); and
(viii) in a Restricted Party; provided, however, no such Transfer Borrower shall result in the Change of Control in a Restricted Party or cause any Key Principal have provided to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than at least thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision anything to contrary contained in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”)Agreement, provided each of the following conditions is satisfied: (A) that no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice , certain owners of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for permitted to obtain mezzanine financing (the costs “Subordinate Mezzanine Loan”), which Subordinate Mezzanine Loan shall be secured by the membership or partnership interests in Hotel Owner and/or Hotel Operator (as applicable) or the owners of Borrower, subject to the following conditions and expenses requirements:
(i) Lender’s review and approval in its reasonable discretion of documenting the Additional Permitted Transfer; terms and conditions of the Subordinate Mezzanine Loan and the documents evidencing the Subordinate Mezzanine Loan, but only to the extent such review of the documents is to confirm such terms and conditions;
(Eii) the Subordinate Mezzanine Loan shall only be payable out of any excess cash flow from the Property;
(iii) the Subordinate Mezzanine Loan together with the Loan (and any New Mezzanine Loan) shall have a combined loan-to-value ratio of no greater than eighty percent (80%);
(iv) the lender under the Subordinate Mezzanine Loan shall enter into, and be subject to, an intercreditor agreement in the form and substance reasonably satisfactory to Lender in its reasonable discretion (the “Subordinate Mezzanine Intercreditor Agreement”);
(v) the Subordinate Mezzanine Loan shall be nonrecourse as to principal and interest required to be paid under the Subordinate Mezzanine Loan and shall not be secured by a lien against the Property;
(vi) Borrower shall reimburse Lender for all actual costs and reasonable out-of-pocket expenses incurred by Lender in connection with reviewing the Additional Permitted Transfer, whether or not consummated; Subordinate Mezzanine Loan documents and negotiating and documenting the Subordinate Mezzanine Intercreditor Agreement;
(F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (Hvii) Borrower shall have obtained and delivered satisfactory evidence to Lender thatat Borrower’s sole cost and expense a confirmation in writing from each of the Rating Agencies that such Subordinate Mezzanine Loan will not result in a requalification, following reduction, downgrade or withdrawal of the Additional Permitted Transfer, Borrower shall continue to comply with ratings in effect immediately before such Subordinate Mezzanine Loan was incurred for the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security Securities or any increased risk class thereof issued in connection with a Securitization which are then outstanding; and
(viii) the final capital structure of default hereunder the Subordinate Mezzanine Loan is subject in order all respects to declare the Debt immediately due Rating Agencies’ approval and payable upon Borrower’s Transfer without to Lender’s consent. This provision shall apply reasonable approval, including, without limitation, any changes to every Transfer regardless the organizational structure of whether voluntary or not, or whether or not Lender has consented to any previous TransferBorrower.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners owners, as applicable, in owning and operating properties such as the Property Collateral in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other ObligationsObligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Collateral, the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty ((i) and (ii) collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consenthereof.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property Collateral or any part thereof for a price to be paid in installments; (ii) an agreement by Mortgage Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership limited liability company interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership limited liability company interest, or the Sale or Pledge of non-managing membership limited liability company interests or the creation or issuance of new non non-managing membership limited liability company interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following transfers shall not be required deemed to be a Transfer and shall not require Lender’s consent: (i) the sale or transfer, in connection with one or a series of Transferstransactions, of not more than ten forty-nine percent (1049%) of the stockstock in a Restricted Party; (ii) the sale or transfer, directly or indirectly, in one or a series of transactions, of not more than forty-nine percent (49%) of the limited partnership interests or non-managing membership limited liability company interests (as the case may be) in a Restricted Party; provided, however, that with respect to each such sale or transfer (A) no such Transfer sales or transfers shall result in the Change change of Control voting control in a the Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and (B) as a condition to each such Transfersale or transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. sale or transfer, (C) no such sale or transfer of any direct ownership interests in Borrower, General Partner or Mortgage Borrower shall be permitted, (D) Borrower shall pay or cause to be paid any and all reasonable outcosts imposed or incurred as a result of any such sale or transfer, including, without limitation, any transfer taxes, and (E) if after giving effect to any such sale or transfer, more than forty-ofnine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-pocket costs nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion acceptable to Lender and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies; and (iii) the execution by Mortgage Borrower of a license agreement and related documents for the operation of a health club on the Property with a wholly owned taxable reit subsidiary of the Operating Partnership provided that Mortgage Borrower delivers to Lender an executed copy of such license agreement and related documents and all fees payable to Mortgage Borrower arising from such license are deposited into the Lockbox Account. In addition to the requirements of this Section 5.2.10(d), except following transfers of the Property permitted pursuant to Section 5.2.10(f), at all times during the term of the Loan, the Operating Partnership must continue to control Borrower, Mortgage Borrower and Affiliated Manager and own, directly or indirectly, at least a fifty-one percent (51%) interest in Borrower, Mortgage Borrower and Affiliated Manager. The sale, transfer or issuance of stock in the REIT shall not be deemed a transfer hereunder provided the stock of the REIT is listed and traded on the New York Stock Exchange or such other nationally recognized stock exchange.
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s a Transfer without Lender’s written consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
(f) Notwithstanding anything to the contrary contained herein, and without limiting any Transfers or rights under Section 5.2.10(g) hereof, Lender agrees that it shall not unreasonably withhold its consent to a Transfer (or to an unlimited number of Transfers) of the Property by Mortgage Borrower (or the then owner of the Property), provided that the following terms and conditions are satisfied: (i) Borrower (or the then owner of the Property) shall have given at least thirty (30) days prior written notice to Lender of the proposed Transfer and the proposed Transfer shall not be effective earlier than the date that is three (3) months after the first Payment Date, (ii) no Default, Mortgage Loan Default or Event of Default shall have occurred or be continuing; (iii) an express assumption of this Agreement, the Note, and the other Loan Documents by the principals of the proposed transferee of the Property, and a pledge by the principals of the proposed transferee of all of their equity interest in the transferee of the Property as security for the Loan in form and substance satisfactory to Lender, in each case subject to the provisions of Section 9.4 hereof; (iv) payment of all of fees and expenses incurred in connection with such Transfer, including, without limitation, the cost of any third party reports, legal fees and expenses, Rating Agency fees and expenses or required legal opinions; (v) payment of a non-refundable $5,000 application fee and an assumption fee equal to one-quarter of one percent (0.25%) of the Outstanding Principal Balance with respect to the initial transfer and one-half of one percent (0.50%) of the Outstanding Principal Balance with respect to each transfer thereafter; (vi) the delivery of an Additional Insolvency Opinion reflecting the proposed Transfer reasonably satisfactory in form and substance to Lender; (vii) the proposed transferee’s compliance with the representations and covenants set forth in Section 4.1.30 and Section 5.2.9 hereof; (viii) the delivery of evidence satisfactory to Lender that the single purpose nature and bankruptcy remoteness of the proposed transferee, and its shareholders, partners or members, as the case may be, following such Transfer is in accordance with the then current standards of Lender and the Rating Agencies; (ix) prior to any release of Guarantor, a substitute guarantor acceptable to Lender in its sole discretion shall have assumed the Guaranty executed by Guarantor or executed a replacement guaranty reasonably satisfactory to Lender; (x) Lender shall have received confirmation in writing from the Rating Agencies to the effect that such Transfer will not result in a re-qualification, reduction or withdrawal of the then current rating assigned to the Securities or any class thereof in any applicable Securitization; (xi) the satisfaction of all of the conditions set forth in Section 5.2.10 (f) of the Mortgage Loan Agreement; and (xii) the satisfaction of such other conditions as Lender shall determine in its reasonable discretion to be in the interest of Lender, including, without limitation, the creditworthiness, reputation and qualifications of the transferee with respect to the Loan, the Mortgage Loan and the Property.
(g) A Transfer that occurs by inheritance, devise or bequest or by operation of law upon the death or disability of a natural person who holds an indirect interest in Mortgage Borrower and a Transfer by a natural person of indirect interests in Mortgage Borrower for estate planning purposes shall not require the consent of Lender and no transfer fee shall be payable in connection therewith, provided that, in each case, such Transfer is to a non-minor member of the immediate family of the holder of such interest, or a trust established for the benefit of a member of the immediate family of the holder of such interest, and provided further that, in each case, each of the following transfer conditions are satisfied:
(i) no Event of Default shall have occurred and remain uncured;
(ii) Borrower shall give Lender notice of such Transfer together with copies of all instruments effecting such transfer not less than ten (10) days prior to the date of such Transfer, or in the event that any such Transfer or series of Transfers shall result in any Person that does not own more than a 20% direct or indirect interest in Mortgage Borrower as of the date hereof owning more than a 20% direct or indirect interest in Mortgage Borrower, Borrower shall give Lender thirty (30) days prior written notice of such Transfer and Lender shall have an opportunity to perform its customary credit and background searches with respect to such transferee, except in the case of the death or disability of an interest holder, in which event Borrower shall give Lender notice of such Transfer within ten (10) Business Days after such Transfer;
(iii) no such Transfer of interest shall result in a change of control of Mortgage Borrower or Borrower (or its managing member or general partner) or the day to day operations of the Property, or, if such Transfer would result in a change of control of Mortgage Borrower or Borrower (or its managing member or general partner) or the day to day operations of the Property as a result of the death or disability of an interest holder that is a natural person, Lender shall have approved in good faith the Person that will control Mortgage Borrower or Borrower and/or the day to day operations of the Property;
(iv) the legal and financial structure of Mortgage Borrower and Borrower and their shareholders, partners or members, and the single purpose nature and bankruptcy
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.105.2.11, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.. 103
(d) Notwithstanding the provisions of this Section 5.2.105.2.11, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall pay shall, no less than thirty (30) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies). In addition, at all times, (a) Guarantor must continue to Control, and own, directly or indirectly, in the aggregate, at least a 51% legal and beneficial interest in, Borrower, and (b) Acadia Realty Trust must continue to Control, and own, directly or indirectly, at least a 20% legal and beneficial interest in, each of Guarantor and any Affiliated Manager.
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its No consent to any waiver of a prohibited Transfer upon satisfaction assumption of the Loan shall occur on or before the date that is twelve (12) Payment Dates after the Completion of the Improvements. Thereafter, Lender’s consent to a Transfer of the Property and assumption of the Loan shall not be unreasonably withheld provided that Lender receives sixty (60) days prior written notice of such Transfer and no Event of Default has occurred and is continuing, and further provided that the following minimum conditionsadditional requirements are satisfied for all Transfers other than those described in subsection (d) above:
(i) Borrower shall pay Lender at the time of such Transfer a transfer fee equal to one half of one percent (10.5%) of the outstanding principal balance of the Loan at for the time first Transfer and one percent (1.0%) of such transferthe outstanding principal balance of the Loan for each subsequent Transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth Net Worth and liquidity Liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, 104 voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.35, 5.1.23 5.1.46 and 5.2.9 5.2.10 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, agreements and covenants and legal opinions reasonably required by Lender;
(x) Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender;
(xii) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty of Completion, the Guaranty of Recourse Carveouts and the Environmental Indemnity executed by Guarantor or execute a replacement guaranty guaranties and environmental indemnity reasonably satisfactory to Lender.;
(xixiii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the 105 recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;; and
(xiixiv) If applicable, the The Property shall be managed by a Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets . Immediately upon a Transfer to such Transferee and the satisfaction of all of the Lender’s underwriting standards related to its financial conditionabove requirements, cash flow, operating income, physical condition, management the named Borrower and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor herein shall be released from any guaranty or indemnity agreement by virtue of all liability under this Agreement, the Additional Permitted Note, the Mortgage and the other Loan Documents accruing after such Transfer; (D) Borrower . The foregoing release shall be responsible for effective upon the costs and expenses date of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted such Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior but Lender agrees to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory provide written evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon thereof reasonably requested by Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and that of its stockholders, general partners, members, Key Principals members and principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Collateral in agreeing to make the Loan, and will continue to rely on Borrower’s 's ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.105.2.10 or in connection with the release of a Release Property subject to and in accordance with, as applicable, Section 2.6 or Section 8.1(c) hereof (and, as applicable, Section 2.6, 6.4(d) or 8.1(c) of the Mortgage Loan Agreement), Borrower shall not, and nor shall not it permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, sublet, grant a security interest in, grant options with respect to, or otherwise transfer transfer, exchange or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) any of the Collateral, any of the Senior Mezzanine Collateral, any Individual Property or any part thereof or any legal or beneficial interest therein or, except as may be expressly permitted under and in accordance with Section 5.1.22 hereof, any Lease of any part thereof or any legal or beneficial interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or, other than as contemplated by the Loan, the Other Mezzanine Loans or the Corporate Loan, a Pledge of an interest in any Restricted PartyParty or (iii) except for Permitted Encumbrances, mortgage, hypothecate or otherwise encumber the leasehold interest in any Operating Lease (collectively, a "Transfer"), other than (A) pursuant to Leases of space in the Improvements and Non-Material Leases to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent5.1.22.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower, Senior Mezzanine Borrower, Mortgage Borrower or Maryland Owner agrees to sell the Property Collateral, any of the Senior Mezzanine Collateral or an Individual Property, as applicable, or any part thereof thereof, for a price to be paid in installments; (ii) an agreement by Mortgage Borrower or Maryland Owner leasing all or a substantial part of the an Individual Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s 's or Maryland Owner's right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s 's stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following Transfers shall not be required deemed to be a Transfer; provided that any such Transfer is a complete conveyance of the related interest and not a Pledge (other than as expressly set forth below), encumbrance or other Transfer of such interest
(i) the Transfer, in connection with one or a series of Transferstransactions, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership direct or indirect interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, that (A) no such Transfer Transfers shall result in the Change change of Control control in a the Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and (B) as a condition to each such Transfer, (I) Lender shall receive not less than thirty (30) days days' prior written notice of such proposed Transfer. Borrower Transfer and (II) at all times, Carlyle and/or one or more Affiliates of Carlyle shall pay any and all reasonable outcontinue to own, directly or indirectly, at least a fifty-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (151%) of the outstanding principal balance of the Loan at the time of such transferinterest in Borrower, Senior Mezzanine Borrower, Mortgage Borrower, Maryland Owner, Master Tenant and Operator;
(ii) the Pledge of any direct or indirect interests in any Operator, Master Tenant or any direct or indirect equity holder in the Operator and/or in HCR Properties, LLC in favor of Corporate Loan Lender as security for the Corporate Loan as same may have been refinanced subject to the provisions of Section 5.2.12, and any Transfer which occurs as the result of the exercise of remedies by Corporate Loan Lender in accordance with the Corporate Loan or the holders of any indebtedness used to refinance the Corporate Loan, subject to the provisions of Section 5.2.12; provided, however, that it shall be a condition to a Transfer to any Person pursuant to a foreclosure on such Pledge or other sale or assignment thereof that (A) Mortgage Borrower and Maryland Owner shall pay have obtained and delivered to Lender prior written confirmation from the applicable Rating Agencies that such Transfer shall not cause a downgrade, withdrawal or qualification of the ratings of any Securities or any class thereof issued upon the Securitization of the Mortgage Loan, (B) no Event of Default shall then be continuing, (C) none of Lender, Senior Mezzanine Lender or Mortgage Lender shall have commenced an Enforcement Action under the Loan Documents, the applicable Senior Mezzanine Loan Documents or the Mortgage Loan Documents, (D) no Bankruptcy Action shall have occurred with respect to Borrower, Senior Mezzanine Borrower, Mortgage Borrower or Maryland Owner, (E) no event shall have occurred or would reasonably be expected to occur as a result thereof, which would be reasonably expected to have, or has, a Material Adverse Effect, and all reasonable out-of-pocket costs incurred in connection with such Transfer(F) the new Operator shall be a Qualified Operator approved by Lender, including Lender’s counsel fees and disbursements and all recording feeswhich approval shall not be unreasonably withheld, title insurance premiums and mortgage and intangible taxes;conditioned or delayed; and
(iii) The proposed transferee any Transfer which occurs as the result of the exercise of remedies by Lender or any Other Mezzanine Lender in accordance with the Loan or any Other Mezzanine Loan. With respect to each of the Transfers set forth in clauses (i) through (iii) above, (A) if after giving effect to any such Transfer and all prior Transfers, more than forty-nine percent (49%) in the “Transferee”aggregate of the direct or indirect interests of Borrower are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) of the direct or Transferee’s Principals must have demonstrated expertise indirect interests in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, Borrower as of the date of Closing Date, it shall be an additional condition to such transfer, have Transfer that Lender receives an aggregate net worth and liquidity Additional Insolvency Opinion reasonably acceptable to Lender;
, (vB) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for in the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into event that such Transfer renders an assumption agreement in form and substance satisfactory to Lender;
(vii) There the True Lease Opinion untrue, it shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not an additional condition to such Transfer that Lender receives an Additional True Lease Opinion regarding such Transfer reasonably acceptable to Lender;
, and (viiiC) Transfereeif a Securitization of the Mortgage Loan shall have occurred, Transferee’s Principals in the event that such Transfer (I) is of more than forty-nine percent (49%) in the aggregate of the direct or indirect interests in Borrower or (II) results in a Person other than Carlyle controlling HCR Healthcare, LLC or any direct or indirect subsidiary thereof, it shall be an additional condition to such Transfer that (1) Borrower shall have caused Mortgage Borrower and Related Entities Maryland Owner to have obtained and delivered to Lender prior written confirmation from the applicable Rating Agencies that such Transfer will not cause a downgrade, withdrawal or qualification of the then-current ratings of the Securities or any class thereof, and shall have obtained each Designated Mezzanine Lender's consent thereto, which consent shall not have defaulted under its be unreasonably withheld, and, (2) if one or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur more Operators are replaced as a result of such Transfer, and Transferee and Transferee’s Principals that each such replacement Operator shall deliver be a Qualified Operator. Notwithstanding any provision hereof to the contrary, this Section 5.2.10 shall not prohibit or restrict (i) any Transfer of any interest in Guarantor or any Transfer of any interests in or assets of any Affiliate of Guarantor (other than any direct or indirect subsidiary of HCR Properties, LLC or HCR Healthcare, LLC), (ii) any Transfer of any equity interests in any Restricted Party (other than Borrower, Maryland Owner, Mezzanine Borrower, Master Tenant, or Operator), or (iii) any merger or consolidation of any Restricted Party (other than Borrower, Maryland Owner, Mezzanine Borrower, Master Tenant or Operator), so long as, after giving effect to such Transfer, merger or consolidation, (A) all organizational documentation reasonably requested by LenderCarlyle and/or one or more Affiliates of Carlyle shall continue to have a Controlling Equity Interest in Guarantor, which shall be reasonably satisfactory to Lender Manor Care, HCR Properties, LLC and HCR Healthcare, LLC, and (B) all certificates100% of the equity interests of each of HCR VII Properties, agreementsLLC, covenants HCR II Healthcare, LLC, Borrower, Maryland Owner, Mezzanine Borrower, Principal, Master Tenant and legal opinions reasonably required Operator are owned by Lender;
(x) Prior to any release HCR Properties, LLC or HCR Healthcare, LLC, and Guarantor controls Manor Care, HCR Properties, LLC and HCR Healthcare, LLC. For the purposes of Guarantorthis paragraph, one a "Controlling Equity Interest" in Guarantor or a subsidiary of Guarantor means (1) if the equity securities of neither Guarantor nor any direct or more substitute guarantors acceptable to Lender shall have assumed all indirect parent of Guarantor are traded on a national securities exchange, ownership, directly or indirectly, of at least fifty-one percent (51%) of the liabilities equity and obligations voting interests of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor (or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xisuch direct or indirect parent) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interestssuch subsidiary, as applicable, in Borrower may be transferred without Lender’s consent and without application (2) if the equity securities of either Guarantor or any direct or indirect parent of Guarantor are traded on a national securities exchange, ownership, directly or indirectly, of at least 30% of the fee set forth in Section 5.2.10(e)(i): equity and voting interests of Guarantor (ior such direct or indirect parent) among limited partners or memberssuch subsidiary, as applicable, and the possession of Borrower who are limited partners the power to direct and cause the direction of the voting rights associated with such interests, provided that no Person (other than Carlyle or membersan Affiliate of Carlyle) then holds a greater percentage of the equity or voting interests in Guarantor (or such direct or indirect parent) or such subsidiary, as applicable, . For purposes of Borrower as this paragraph "control" shall mean the direct or indirect power to direct and cause the direction of the date management and policies of this Agreement (each a “Current Owner”)Person whether through ownership of voting securities, and (ii) to immediate family members (which beneficial interest, by contract or otherwise. For the avoidance of doubt, no prohibited Transfer of equity interests in any direct or indirect subsidiary of HCR Properties, LLC or HCR Healthcare, LLC shall be limited deemed to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has have occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement solely by virtue of the Additional Permitted Transfer; (D) Borrower a Transfer that is otherwise permitted hereunder of direct or indirect equity interests in HCR Properties, LLC or HCR Healthcare, LLC. Nothing contained herein shall be responsible for deemed to prohibit Corporate Loan Lender from syndicating or otherwise transferring its rights under the costs Corporate Loan. In addition, nothing contained herein shall be deemed to prohibit additional borrowings or the refinancing of all or a portion of the Corporate Loan (without increasing the principal amount thereof other than as permitted under Section 5.2.12); provided that, at Lender's request, Corporate Loan Lender, each Other Mezzanine Lender, Mortgage Lender and expenses of documenting the Additional Permitted Transfer; (E) Borrower Lender shall reimburse Lender for all actual costs and expenses incurred by have entered into an intercreditor agreement with Lender in connection with the Additional Permitted Transferform and substance reasonably acceptable to Lender, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower Mortgage Lender and management of the Property are the same persons who have such Control and management rights immediately each Other Mezzanine Lender prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower a Securitization, and, if a Securitization shall have delivered satisfactory evidence occurred, acceptable to the Rating Agencies and reasonably acceptable to Mortgage Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without each Designated Mezzanine Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Sources: Loan Agreement (Hcp, Inc.)
Transfers. 2.1 Prohibited Transfers Each Stockholder agrees not to Transfer any Stock owned by it, except (ai) Borrower acknowledges that Lender has examined for Transfers of Stock to Santera, (ii) Tekelec and/or its Affiliates shall have the right to transfer Stock to any direct or indirect wholly owned subsidiary of Tekelec (provided the same executes an Instrument of Accession as provided by Section 2.2) and/or pledge, hypothecate, grant a security interest in and relied on otherwise encumber Stock in connection with the experience incurrence by Tekelec or its Affiliates of Borrower indebtedness for borrowed money and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control nothing herein shall prohibit any Transfer of the Property as a means Stock owned by Tekelec or its Affiliates in connection with any sale of maintaining the value all or substantially all of the Property as security for repayment stock or assets of the Debt and the performance Tekelec or any acquisition of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure thatTekelec and/or its Affiliates by merger or otherwise, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(biii) Without the prior written consent of Lender, and except to the extent otherwise set forth agreed to by the holders of not less than sixty-five percent (65%) of the Stock, calculated on a fully converted basis, (iv) any Stockholder may Transfer some or all of the Stock owned by such Stockholder to another Stockholder (provided that such Stockholder is a party to this Agreement and the Escrow Agreement), including any Transfers to Santera contemplated by the Escrow Agreement (provided that the Representative, in this Section 5.2.10its capacity as record owner, Borrower shall not, and shall may not permit any Restricted Party to do Transfer any of the following shares of Stock registered in its name and held for the benefit of certain stockholders of Santera pursuant to the terms and subject to the conditions contained in the Escrow Agreement except as otherwise permitted under Article IV of the Escrow Agreement), (collectivelyv) any time after the Termination Date, so long as approved in advance by the Board of Directors (such approval not to be unreasonably withheld), any Transfer of Stock owned by a “Transfer”): Stockholder to stockholders, partners or members of such Stockholder upon the liquidation of such Stockholder or a distribution to the stockholders, partners or members of such Stockholder, (ivi) sellupon the death of any Stockholder, conveysuch Stock may be transferred to one, mortgagebut only one, grantbeneficiary or, bargainif there is more than one beneficiary, encumber, pledge, assign, grant options with respect then such Stock shall be transferred to, or otherwise transfer or dispose of (directly or indirectlyand remain in, voluntarily or involuntarilysuch Stockholder's estate, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than as otherwise expressly provided in accordance with Section 5.1.22 hereof.
(d) this Agreement. Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one foregoing or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those anything else contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 herein to the contrary, limited partnership without the prior written consent of Tekelec, no Stockholder may Transfer any shares of Stock (including, without limitation, any such Transfers otherwise permitted by this Section 2.2 or membership interests, as applicable, contemplated by Sections 2.3 or 2.4) in Borrower may be transferred without Lender’s consent and without application the event that such proposed Transfer would cause the transactions contemplated by the Merger Agreement to fail to qualify as a tax-free transaction under Section 351 of the fee set forth Code. Any purported Transfer in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date violation of this Agreement (each a “Current Owner”)shall be invalid and void, and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security registered in Santera's or any increased risk other Person's books or otherwise recognized for any purpose (including for the purpose of default hereunder in order determining voting rights or entitlement to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary dividends or not, or whether or not Lender has consented to any previous Transferother distributions).
Appears in 1 contract
Sources: Stockholders' Agreement (Tekelec)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholdersmanagement, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Properties as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of Lender, and except for (a) Permitted Encumbrances (with respect to the Properties), (b) the release of any Individual Property in accordance with Section 2.5, and (c) to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to to, do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Individual Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property one or more Individual Properties or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with (i) one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted PartyParty or (ii) a Permitted Transfer; provided, however, no such Transfer shall result in the Change change of Control in a Restricted Party (Lender agreeing that any Transfer from Gramercy Sponsor or cause any Key Principal its wholly-owned Affiliates to no longer be G▇▇▇▇▇▇▇ Sponsor or its wholly-owned Affiliates and vice versa shall not, so long as the last sentence of this clause (d) is satisfied, constitute a Key Principal change of BorrowerControl in a Restricted Party), and as a condition to each such Transfer, (i) Lender shall receive not less than thirty ten (3010) days days’ prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers Transfer (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise provided that no advance notice shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations required with respect to any other Indebtedness in a manner (y) Transfers by Passive Owners which is are not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Affiliated with Guarantor or execute (z) Transfers by Passive Owners which are Affiliated with Guarantor solely by reason of being a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xidirector or officer of a Guarantor or a Person that is Affiliated with Guarantor) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) such Transfer will not result in a default or event of default under any Ground Lease or the Master Lease, nor shall such Transfer cause, or give the Master Tenant the right to immediate family members (which shall be limited to obtain, a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for reduction in the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each term of the following conditions is satisfied: (A) no Default Master Lease with respect to all or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice any portion of the Additional Permitted Transfer Properties. If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall, no less than 30 five (5) days prior to the commencement effective date of any such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and the Approved Rating Agencies. In addition, at all times, either Gramercy Sponsor, G▇▇▇▇▇▇▇ Sponsor, or not consummated; both, must continue to (F1) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; Guarantor and (H2) own, directly or indirectly, at least a fifty percent (50%) legal and beneficial interest in Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous TransferGuarantor.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that each Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties collateral such as the Property Collateral in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that each Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, each Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of LenderAdministrative Agent, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Property, the Collateral or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) enter into any PACE Loan, (iii) permit a Sale or Pledge of an interest in any Restricted Party, (iv) permit a Sale or Pledge of the CPLV Lease or any interest therein or (v) permit a Sale or Pledge of any interest in CPLV Tenant or CPLV Tenant’s leasehold interest in the Property other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and 5.1.20, (B) Permitted TransfersTransfers (including Permitted Encumbrances), (C) pursuant to customary short-term occupancy agreements with the CPLV Tenant or short-term hotel guests, or (iiiD) enter into any plan a Transfer of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any portion of the foregoing without Lender's prior written consentProperty to a Governmental Authority in connection with a Condemnation of such portion of the Property in accordance with Section 6.3 hereof.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Collateral or any part thereof or Mortgage Borrower agrees to sell the Property or any part thereof thereof, in each case, for a price to be paid in installments; (ii) an agreement by Mortgage Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s right, title and interest in and to any Leases the CPLV Lease or any CPLV Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) Manager other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.105.2.10(a), LenderAdministrative Agent’s consent shall not be required in connection with (i) one or a series of Transfers, Transfers (except for a Pledge) of (x) not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause (y) the indirect equity interests in Mezzanine C Borrower by any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not Person that owns less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable outforty-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one nine percent (149%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any economic and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transferlegal beneficial interests in, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lenderdoes not Control, which shall be reasonably satisfactory to Lender and (B) all certificatesany of Mortgage Borrower, agreementsMortgage Principal, covenants and legal opinions reasonably required by Lender;
(x) Prior to Principal, any release of Mezzanine Borrower or Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.,
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and Pledgor shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) any Individual Property, the Property Collateral, the Mezzanine A Collateral, the Mezzanine B Collateral, the Mezzanine C Collateral or the Mezzanine D Collateral or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty (collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 5.1.17 hereof or a release of an Individual Property in accordance with the provisions of Section 2.5 hereof, without (i) the prior written consent of Lender and (Bii) Permitted Transfersif a Securitization has occurred, delivery to Lender of written confirmation from the Rating Agencies that the Transfer will not result in the downgrade, withdrawal or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any qualification of the foregoing without Lender's prior written consentthen current ratings assigned to any Securities or the proposed rating of any Securities.
(cb) A Transfer shall include include, but not be limited to: (i) an installment sales agreement wherein Borrower Pledgor agrees to sell one or more Individual Properties, the Property Collateral, the Mezzanine A Collateral, the Mezzanine B Collateral, the Mezzanine C Collateral or the Mezzanine D Collateral or any part thereof for a price to be paid in installments; (ii) an agreement by Mortgage Borrower leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest interests or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with the Mortgage Loan Agreement, Mezzanine A Loan Agreement, Mezzanine B Loan Agreement, Mezzanine C Loan Agreement, Mezzanine D Loan Agreement and Section 5.1.22 5.1.18 hereof, or (viii) any deed-in-lieu or consensual foreclosure relating to any Individual Property with or for the benefit of Mortgage Lender or any Affiliate thereof.
(dc) Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents (but subject to the provisions of this Section 5.2.10Sections 5.2.10(a), Lender’s consent (e) and (b) hereof), the following transfers shall not be required deemed to be a Transfer:
(i) a transfer by devise or descent or by operation of law upon the death of a member, partner or shareholder of a Restricted Party (other than Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower or Mezzanine D Principal) or a Restricted Party (other than Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower or Mezzanine D Principal) itself;
(ii) the Sale or Pledge, in connection with one or a series of Transferstransactions, of not more than ten forty-nine percent (1049%) of the stockstock in a Restricted Party other than Pledgor, Principal, Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower or Mezzanine D Principal; provided, however, no such transfers shall result in the change of voting control in the Restricted Party, and as a condition to each such transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed transfer;
(iii) intentionally deleted;
(iv) the transfer of all or any portion of the direct or indirect interests in JV LLC; provided, however, that as a condition to each such transfer, (A) Lender shall receive not less than thirty (30) days’ prior written notice of such proposed transfer, (B) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and/or KBS Real Estate shall, directly or indirectly, retain and maintain control over the day-to-day management and operations of the Properties, Pledgor, Principal, Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower, Mezzanine D Principal and JV LLC following such transfer, (C) if, as a result of such transfer, control over the day-to-day management and operations of the Pledgor, Mortgage Borrower, Principal, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower, Mezzanine D Principal and JV LLC is transferred from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to KBS Real Estate, KBS Real Estate shall have satisfied the terms and provision of Section 5.2.10(e) hereof, and (D) a Qualified Manager shall continue to manage the Properties following such transfer;
(v) the Sale or Pledge, in one or a series of transactions, of not more than forty-nine percent (49%) of the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted PartyParty other than Mortgage Borrower, Mortgage Principal, Pledgor, Principal, Mezzanine A Borrower, Mezzanine A Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower and Mezzanine D Principal; provided, however, no such Transfer transfers shall result in the Change change of Control voting control in a the Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfertransfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. transfer;
(vi) the Pledge to Mezzanine A Lender of the membership interest in Mortgage Borrower shall pay as collateral security for the Mezzanine A Loan, or any and all reasonable out-of-pocket costs and expenses incurred registration of such Pledge;
(vii) the Pledge to Mezzanine B Lender of the membership interest in Mezzanine A Borrower as collateral security for the Mezzanine B Loan, or any registration of such Pledge;
(viii) the Pledge to Mezzanine C Lender of the membership interest in Mezzanine B Borrower as collateral security for the Mezzanine C Loan, or any registration of such Pledge; and
(ix) the Pledge to Mezzanine D Lender of the membership interest in Mezzanine C Borrower as collateral security for the Mezzanine D Loan, or any registration of such Pledge.
(d) Notwithstanding anything to the contrary contained in this Section 5.2.10, except in connection with such Transfers any transfers pursuant to clauses (including Lender’s counsel fees and disbursements and any fees and expenses iii) or (iv) of Section 5.2.10 hereof, at all times during the term of the Rating Agencies)Loan either (A) (I) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall, directly or indirectly, retain and maintain control over the day-to-day management and operations of Pledgor, Principal, Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower, Mezzanine D Principal and JV LLC, (II) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall hold, individually or collectively, at least a three percent (3%) direct or indirect, as applicable, equity interest in each of Pledgor, Principal, Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower, Mezzanine D Principal, JV LLC and New Leaf Industrial and (III) New Leaf Industrial shall hold, at least a seventeen percent (17%) direct or indirect, as applicable, equity interest in each of Pledgor, Principal, Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower, Mezzanine D Principal and JV LLC, or (B) (I) KBS Real Estate shall, directly or indirectly, retain and maintain control over the day-to-day management and operations of Pledgor, Principal, Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower, Mezzanine D Principal and JV LLC and (II) KBS Real Estate shall hold, at least a fifty-one percent (51%) direct or indirect, as applicable, equity interest in each of Pledgor, Principal, Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower, Mezzanine D Principal and JV LLC.
(e) Without limiting Lender’s discretion In the event that the control over the day-to-day management and operations of Pledgor, Principal, Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower, Mezzanine D Principal and JV LLC is directly or indirectly transferred from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to approve KBS Real Estate, KBS Real Estate or disapprove any request for an entity that is directly or indirectly wholly owned by KBS Real Estate (a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “TransfereeKBS Subsidiary”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date within five (5) Business Days of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(vi) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Calare Properties, Inc., a Delaware corporation, and ▇▇▇▇▇▇▇ Capital Partners, LLC, a California limited liability company, under the Loan Documents Environmental Indemnity and the Guaranty with respect to all acts and events occurring or arising after such transfer, in a manner reasonably satisfactory to Lender in all respectsLender, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (Bii) all certificatesdeliver to Lender, agreements, covenants and legal opinions (x) financial statements or other information reasonably required by Lender;
(x) Prior Lender with respect to any release of Guarantor, one (1) KBS Real Estate or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interestsKBS Subsidiary, as applicable, and (y) such legal opinions as Lender may reasonably require in Borrower may be transferred without Lender’s consent connection with such assumption. Upon compliance with the provisions of this Section 5.2.10(e) and without application of provided that (A) KBS Real Estate or the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or membersKBS Subsidiary, as applicable, has a net worth of Borrower who are limited partners or membersat least $50,000,000, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), reasonably determined by Lender and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (AB) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.release ▇▇▇▇▇▇▇
Appears in 1 contract
Sources: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the creditworthiness and experience of Borrower and its stockholdersthe Restricted Parties, general partnersas applicable, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loanloan secured by the Security Instrument, and that Lender will continue to rely on Borrower’s such Restricted Parties’ direct or indirect ownership and control and/or operation of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other ObligationsDebt. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the shall not without Lender’s prior written consent of Lender(not to be unreasonably withheld, conditioned or delayed) and except to the extent as otherwise set forth expressly provided in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): : (i) sell, assign, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, transfer or otherwise dispose of its legal or beneficial interests in the Property or any part thereof other than pursuant to Leases permitted under, and entered into in accordance with, Section 5.1.20 hereof, and/or with respect to other Permitted Encumbrances, (ii) permit any owner, directly or indirectly, of an ownership interest the Property, to transfer or dispose of such interest, whether by transfer of stock or other interest in a Restricted Party, or otherwise, (iii) [intentionally omitted], (iv) mortgage, hypothecate or otherwise encumber or grant a security interest in the Property or any part thereof, (v) sell, assign, convey, transfer, mortgage, encumber, grant a security interest in, or otherwise transfer or dispose of any direct or indirect ownership interest in any Restricted Party, or permit any Restricted Party that owns an interest in another Restricted Party to do the same, or (directly or indirectlyvi) file a declaration of condominium with respect to the Property (any of the foregoing transactions, voluntarily or involuntarilya “Transfer”). Notwithstanding the foregoing, by operation for purposes hereof, a “Transfer” shall not include Permitted Transfers. Further notwithstanding the foregoing, for purposes of law or otherwisedetermining recourse liability pursuant to Section 9.3, and whether or a “Transfer” shall not for consideration or include any of recordthe following (1) the Property granting of, amendment of, extension or renewal of, or any part thereof or other action taken with respect to any legal or beneficial interest therein or Permitted Encumbrance (without limiting Borrower’s obligations with respect to any interest Permitted Encumbrances pursuant to the terms and provisions of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents), (2) the settlement of any claim, dispute, litigation or regulatory proceeding (ii) permit a Sale or Pledge of an interest in without limiting Borrower’s obligations with respect to any Restricted Party, other than (A) such settlements pursuant to Leases of space in the Improvements to Tenants in accordance with the terms and provisions of Section 5.1.20 this Agreement and the other Loan Documents), (B3) Permitted Transfersthe expenditure of funds by Borrower or any other Restricted Party (without limiting Borrower’s obligations with respect to any such expenditures pursuant to the terms and provisions of this Agreement and the other Loan Documents), or (iii4) enter into any plan the disposition or removal of divisionpersonal property owned or leased by Major Tenant to the extent not prohibited under the Major Tenant Lease, or divideprovided, establish a protected serieshowever, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentshall not preclude a determination that the foregoing result in recourse liability for reasons other than being deemed a Transfer.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(db) Notwithstanding the provisions of this Section 5.2.105.2.10(a), Lender’s consent shall not be required in connection with (1) one or a series of Transfers, of not more than ten up to forty-nine percent (1049%) of the stock, the limited partnership interests, membership interests or non-managing membership beneficial interests (as the case may be) in a Restricted Party, (2) one or a series of Transfers of the stock in Sponsor and (3) one or a series of Transfers of the limited partnership interests in Operating Partnership; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition after giving effect to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred Transfer described in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent clauses (1%), (2) of the outstanding principal balance of the Loan at the time of such transfer;
and (ii) 3), Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise Guarantor each shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shallControlled, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly indirectly, by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such TransferCFLP, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions representations, warranties and covenants under Sections 4.1.30 (Special Purpose Entity), 4.1.34 (Investment Company Act), 4.1.35 (Embargoed Persons), 5.1.23 (Embargoed Persons) and 5.2.9 (ERISA). Upon reasonable request of Section 4.1.31 hereofLender, from time to time, Borrower will reaffirm its ongoing compliance with the same. Lender In addition, (i) after giving effect to each such Transfer, Guarantor (or a Qualified Replacement Guarantor) shall not Control the Borrower or be required under common Control with the Borrower, and (ii) if such Transfer is a Material Owner Transfer, Borrower shall deliver with respect to demonstrate any actual impairment of its security or any increased risk of default hereunder in order each transferee, prior to declare the Debt immediately due such transfer and payable upon at Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless sole cost and expense, “know your customer” searches confirming compliance with the sections referenced above, and verifying the transferee has not been convicted of whether voluntary or nota felony, or whether or is not Lender then, nor has consented to any previous Transfer.it been in the prior seven (7) years, the subject of a Bankruptcy
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Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Properties or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and 5.1.21, (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentTransfers and Permitted Debt.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property Properties or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; interests or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following shall not be deemed to be a Transfer:
(i) A Public Sale; provided, that (A) if after giving effect to any such Public Sale, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party is owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and the Approved Rating Agencies and (B) no Individual Borrower or Principal shall fail to be a Special Purpose Entity by reason of such Public Sale.
(ii) The Sale (but not a Pledge nor the issuance of preferred equity interests), in one or a series of transactions, of the direct or indirect equity interests in Borrower and or direct or indirect interests in any Restricted Party; provided, that, (A) after giving effect to such Sale, Guarantor (x) shall own not less than fifty and one tenths percent (50.1%) of the economic and direct or indirect legal and beneficial interests in Borrower (on an unencumbered and look-through basis) and (y) Control Borrower, (B) any Excluded Entity or Qualified Transferee (x) shall own not less than 50.1% of the economic and direct or indirect legal and beneficial interests in Guarantor (on an unencumbered and look through basis) and (y) Control Guarantor, (C) upon the written request of Lender, Borrower shall deliver to Lender notice of each sale described in this Section 5.2.10(d)(ii) not less than ten (10) days following such request, (D) no Sale or Pledge of any direct interest in any Borrower shall be permitted and (E) no Individual Borrower shall fail to be a Special Purpose Entity by reason of such Sale. If after giving effect to any such Sale, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and the Approved Rating Agencies. Notwithstanding anything to the contrary contained in this Agreement (including Section 5.2.10), no notice to, or consent of, or deliveries to, or payments to Lender shall be required in connection with any Sale or Pledge (including as a result of a merger or issuance of shares) of direct or indirect interests in any Excluded Entity.
(e) No Transfer and assumption of the Loan shall occur during the period that is forty-five (45) days prior to and sixty (60) days after a Securitization. Otherwise a one or (1) time (a) Transfer of a series of Transfers, of not more greater than ten fifty-one percent (1051%) legal or beneficial direct or indirect interest in the Properties or Borrower and/or (b) a transfer of Control of Borrower in each case, accompanied by an assumption of the stockentire Loan, the limited partnership interests or non-managing membership interests shall be permitted without Lender’s consent (as the case may be) in a Restricted Party; provided“Permitted Assumption”), however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, provided that Lender shall receive not less than receives thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any Permitted Assumption and all reasonable out-of-pocket costs no Event of Default has occurred and expenses incurred in connection with is continuing at the time such Transfers (including Lender’s counsel fees Permitted Assumption is consummated, and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer$500,000.00;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferPermitted Assumption (including, including without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Approved Rating Agencies pursuant to clause (vi) below);
(iii) The proposed transferee (the “Transferee”) must be at least fifty-one percent (51%) owned (directly or Transferee’s Principals must have demonstrated expertise in owning indirectly) and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined Controlled by Lendera Qualified Transferee or Qualified Public Company;
(iv) Transferee and Transferee’s Principals shall, as With respect to a Transfer of the date of such transferProperty, have an aggregate net worth and liquidity acceptable if applicable, the Transferee entity to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee Property is conveyed shall assume all of the obligations of Borrower under the Loan Documents in a manner reasonably satisfactory to Lender in all respectsLender, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ixv) Transferee and Transferee’s Principals principals that Control Transferee (“Related Entities”) must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 5.1.25 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals the Related Entities shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and and, following a Securitization, satisfactory to the Approved Rating Agencies (B) all certificates, agreementsagreements necessary to evidence the Permitted Assumption and an Additional Insolvency Opinion and a due authority, covenants execution and legal opinions enforceability opinion reasonably required by acceptable to Lender;
(xvi) Prior Intentionally omitted;
(vii) Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer reasonably satisfactory in form and substance to Lender;
(viii) There shall be no material litigation relating to the creditworthiness of Transferee or any release Related Entities or any regulatory action pending against Transferee or any Related Entities in each case, which could be reasonably expected to have a material adverse effect on the financial condition of Guarantor, one such Transferee or Related Entity;
(ix) One (1) or more substitute guarantors acceptable to Lender Replacement Guarantors shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory Replacement Guaranty substantially similar to Lender.the Guaranty; provided that the Replacement Guarantor shall not be subject to an ongoing net worth covenant;
(xix) If the Permitted Assumption is accomplished by deed or conveyance of the Properties rather than by assignment of all of Guarantor’s or a Restricted Party’s interests in Borrower, Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance PolicyPolicies, as modified by the assumption agreement, as a valid first lien on the Property Properties and naming the Transferee as owner of the PropertyProperties, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property Properties shall not be subject to any additional exceptions or liens other than those contained in the relevant Title Insurance Policy issued on the date hereof and the any other Permitted Encumbrances;; and
(xiixi) If applicable, the Each Individual Property shall be managed by a Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets . Immediately upon a Transfer to such Transferee and the satisfaction of all of the Lender’s underwriting standards related above requirements, the named Borrower and Guarantor herein shall be released from all liability under this Agreement, the Note, the Mortgage and the other Loan Documents for acts or omissions occurring after such Transfer. The foregoing release shall be effective upon the date such Permitted Assumption is consummated, but Lender agrees to its financial condition, cash flow, operating income, physical condition, management and operationprovide written evidence thereof reasonably requested by Borrower.
(f) Notwithstanding any provision in this In the case of a Transfer that is a Public Sale pursuant to Section 5.2.10 5.2.10(d)(i) or a Permitted Assumption pursuant to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i5.2.10(e) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue the Guaranty for all liability arising after the date of such Transfer if one of the Additional Permitted Transferfollowing conditions are met: (i) a Replacement Guarantor shall execute a replacement guaranty in form and substance the same as the Guaranty covering all liability arising after the date of such Transfer (but not any which may have accrued prior thereto) (a “Replacement Guaranty”); provided, that such Replacement Guarantor shall not be subject to an ongoing Net Worth covenant; or (Dii) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence delivers to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Cash/LC Collateral.
(g) Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
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Transfers. (a) Borrower acknowledges that Lender has examined and relied on Unless such action is permitted by the experience provisions of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, each of Borrower shall not, and shall Maryland Owner agrees that it will not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, assign, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, transfer or otherwise dispose of its legal or beneficial interests in any Individual Property or any part thereof other than pursuant to space leases permitted under, and entered into in accordance with, Section 5.1.20 hereof, (ii) permit any owner, directly or indirectly, of an ownership interest in any Individual Property, to transfer or dispose of such interest, whether by transfer of stock or other interest in a Restricted Party, or otherwise, (iii) incur Indebtedness (other than the Indebtedness permitted pursuant to the terms of this Agreement), (iv) mortgage, hypothecate or otherwise encumber or grant a security interest in any Individual Property or any part thereof, (v) sell, assign, convey, transfer, mortgage, encumber, grant a security interest in, or otherwise transfer or dispose of (directly any direct or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an indirect ownership interest in any Restricted Party, other than or permit any owner of an interest in a Restricted Party to do the same, or (Avi) pursuant file a declaration of condominium with respect to Leases any Individual Property (any of space the foregoing transactions, a “Transfer”). For avoidance of doubt, except as -84- expressly set forth in Section 5.2.10(d) below, no assumption of all or any portion of the Improvements Loan shall be permitted without Lender’s prior written consent, such consent to Tenants be granted or withheld in accordance with Lender’s sole and absolute discretion.
(b) For purposes hereof, a “Transfer” shall not include (i) any public issuance, sale or transfer of non-controlling interests in Inland Western Retail Real Estate Trust, Inc., (ii) transfer by devise or descent or by operation of law upon the provisions death of Section 5.1.20 and (B) Permitted Transfersa member or partner of Borrower or Maryland Owner, or (iii) enter into any plan the transfer of divisiondirect or indirect equity interests in Inland Equity Investors, LLC or dividein Inland Equity, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of LLC by the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part current holders thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee respective successors, transferees and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lenderassigns.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Sources: Loan Agreement (Inland Western Retail Real Estate Trust Inc)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Properties or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and 5.1.20, (B) Permitted Transfers, and (C) subject to Section 5.1.23 above, any issuance, sale, pledge or (iii) enter into any plan transfer of divisionnon-controlling interests in ▇▇▇▇ Credit Property Trust III, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.Inc.
(c) A Subject to the exclusions in Section 5.2.10(b), a Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property Properties or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the an Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten forty-nine percent (1049%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. , and provided, further, all outstanding partnership interests in Guarantor shall at all times be owned, directly or indirectly, by ▇▇▇▇ Credit Property Trust III, Inc. If after giving effect to any such Transfer, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall pay shall, no less than thirty (30) days prior to the effective date of any such Transfer, deliver to Lender an Additional Insolvency Opinion acceptable to Lender and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies). In addition, at all times, ▇▇▇▇ Credit Property Trust III, Inc. must continue to Control Borrower, Guarantor and Manager and own, directly or indirectly, at least a 51% legal and beneficial interest in Borrower, Guarantor and Manager.
(e) Without limiting No Transfer of the Properties and assumption of the Loan, or Transfer of any direct interest in any Individual Borrower shall occur during the period that is sixty (60) days prior to and sixty (60) days after a Securitization. Otherwise, Lender’s discretion consent to approve or disapprove any request for a waiver Transfer of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction Properties and assumption of the Loan or Transfer of one hundred percent (100%) of the outstanding membership or partnership interests in Borrower shall not be unreasonably withheld provided that Lender receives not less than sixty (60) days prior written notice of such Transfer and no Event of Default has occurred and is continuing, and further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay or cause to be paid to Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transferTransfer, unless the applicable Transfer is a Transfer to an Identified Affiliate that is a ▇▇▇▇ sponsored entity, in which case no transfer fee shall be required;
(ii) Borrower shall pay or cause to be paid any and all reasonable out-of-pocket costs incurred in connection with such TransferTransfer (including, including without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the PropertyProperties, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall ratify or assume (subject to Section 9.3 hereof) all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.314.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender, provided that such certificates, agreements and covenants shall not materially increase the obligations of Borrower under the Loan Documents or materially decrease the rights of Borrower under the Loan Documents;
(x) If required by Lender, Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a qualification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;
(xi) Prior to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.;
(xixii) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance PolicyPolicies, as modified by the assumption agreement, as a valid first lien liens on the Property Properties and naming the Transferee as owner of the PropertyProperties, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property Properties shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy Policies issued on the date hereof and the Permitted Encumbrances;
(xiixiii) If applicable, the Property The Properties shall be managed by a Qualified Manager pursuant to a Replacement Management Agreement; and
(xiiixiv) The Property meets Borrower or Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender. Immediately upon a Transfer to such Transferee and the satisfaction of all of the Lender’s underwriting standards related above requirements, the named Borrower and Guarantor herein shall be released from all liability under this Agreement, the Note, the Mortgages and the other Loan Documents accruing after such Transfer. The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to its financial condition, cash flow, operating income, physical condition, management and operationprovide written evidence thereof reasonably requested by Borrower.
(f) Notwithstanding No Transfer of any provision direct interest in this Section 5.2.10 a Principal or a manager of an Individual Borrower or of a Principal shall occur during the period that is sixty (60) days prior to the contraryand sixty (60) days after a Securitization. Otherwise, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application to a Transfer of one hundred percent (100%) of the fee set forth outstanding membership interests in Section 5.2.10(e)(i): a Principal or a manager of an Individual Borrower or of a Principal shall not be unreasonably withheld provided that Lender receives not less than sixty (i60) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members days prior written notice of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) Transfer and no Default or Event of Default has occurred and is continuing; , and further provided that the following additional requirements are satisfied:
(i) The Transferee shall be, or shall be owned and controlled by, an Identified Affiliate;
(ii) Borrower shall pay or cause to be paid any and all reasonable out-of-pocket costs incurred in connection with such Transfer (including, without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes and the fees and expenses of the Rating Agencies pursuant to clause (x) below), provided that no transfer fee shall be required;
(iii) The Transferee or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Properties, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall ratify all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not reasonably acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.30, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) Lender has received Borrower’s notice all certificates, agreements, covenants and legal opinions reasonably required by Lender, provided that such certificates, agreements and covenants shall not materially increase the obligations of Borrower under the Loan Documents or materially decrease the rights of Borrower under the Loan Documents;
(x) If required by Lender, Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender, shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in a qualification, reduction, downgrade or withdrawal of the Additional Permitted Transfer no less than 30 days ratings in effect immediately prior to the commencement of such transfer; (C) no indemnitor assumption or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible transfer for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender Securities or any class thereof issued in connection with the Additional Permitted Transfer, whether or not consummated; a Securitization which are then outstanding;
(Fxi) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior Intentionally omitted;
(xii) Intentionally omitted;
(xiii) The Properties shall be continue to be managed by a Qualified Manager pursuant to the Additional Permitted TransferManagement Agreement or a Replacement Management Agreement; and
(Gxiv) Borrower or Transferee, at its sole cost and expense, shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence deliver to Lender that, following the an Additional Permitted Transfer, Borrower shall continue Insolvency Opinion reflecting such Transfer satisfactory in form and substance to comply with the provisions of Section 4.1.31 hereof. Lender.
(g) Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Sources: Loan Agreement (Cole Credit Property Trust III, Inc.)
Transfers. (ai) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Home and the Home Leases in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Homes and Home Leases as a means of maintaining the value of the Property Homes and Home Leases as security for repayment of the Debt and the performance of the Other Obligationsother obligations of Borrower hereunder. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Homes and Home Leases so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other ObligationsDebt, Lender can recover the Debt by a sale of the PropertyHomes and the transfer of the Home Leases.
(bii) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.102.05 or with respect to the leasing of the Homes in the ordinary course of business in accordance with the terms hereof, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (iA) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Homes, the Leases or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (iiB) permit a Sale or Pledge of an interest in Borrower or any Restricted Borrower Party, other than (A) pursuant to Home Leases of space in the Improvements to Tenants Residents in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent5.01(r).
(ciii) A Transfer shall include include, but not be limited to, (iA) an installment sales agreement wherein Borrower agrees to sell the Property Homes or any part thereof for a price to be paid in installments; (iiB) an agreement by Borrower leasing all or a substantial part of the Property any Home for other than actual occupancy by a space Tenant Resident thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any RentsRents allocated to the Homes; (iiiC) if a Restricted Borrower Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (ivD) if a Restricted Borrower Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of any limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (vE) if a Restricted Borrower Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the direct or indirect membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of any direct or indirect non-managing membership interests or the creation or issuance of new non non-managing membership interests; or (viF) if a Restricted Borrower Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party Borrower or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(div) Notwithstanding For the provisions avoidance of this Section 5.2.10doubt, Lender’s without the prior written consent of Lender which shall not be unreasonably withheld: (AA) ▇▇▇▇▇▇▇ ▇▇▇ shall not transfer or dilute any of his ownership interest in GVEST Real Estate Capital LLC, a Delaware limited liability company (“GV REC LLC”); (BB) GV REC LLC shall not transfer or dilute any of its interest in the Borrower’s Member; (CC) Borrower’s Member shall not transfer or dilute its membership interest in Borrower; (DD) Manufactured Housing Properties, Inc. shall not transfer or dilute its membership interest in any Community Owner; and (EE) ▇▇▇▇▇▇▇ ▇▇▇ shall not transfer or allow for the dilution of his ownership interest in Manufactured Housing Properties, Inc. so that his ownership interest falls below 65%. Notwithstanding the foregoing, only notice is required to be given to Lender within ten (10) days following the consummation of the following together with copies of the documents evidencing the Transfer: (AA) for estate planning purposes, ▇▇▇▇▇▇▇ ▇▇▇ establishes a revocable trust in connection with one or a series of Transfers, of which he is the sole grantor and primary beneficiary; and (BB) ▇▇▇▇▇▇▇ ▇▇▇ seeks to transfer not more than ten twenty-two percent of his common equity interest in Manufactured Housing Properties, Inc. provided that he remains the owner of sixty-five (1065%) of the stockcommon equity interest and voting and economic interest in Manufactured Housing Properties, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.Inc.
Appears in 1 contract
Sources: Loan Agreement (Manufactured Housing Properties Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals members and (if Borrower is a trust) beneficial owners owners, as applicable, in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Property, the Collateral or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in the Property, the Collateral or in any Restricted PartyParty (separately and collectively, a “Transfer”), other than (Ax) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 hereof, (y) the disposition of Equipment and other Personal Property pursuant to the replacement thereof or otherwise in the ordinary course of the operation of the Property and (Bz) Permitted Transfersthe approved sale of Units in accordance with the terms and provisions of Section 2.8 hereof. Notwithstanding anything to the contrary contained herein or in the other Loan Documents, Transfers of interests in the Whitehall Guarantor or (iii) enter into in any plan of divisionPerson having any direct or indirect legal or beneficial interest in the Whitehall Guarantor shall not be prohibited or restricted in any manner whatsoever, including by sale, merger, consolidation or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentotherwise.
(c) A Subject to the last sentence of Section 5.2.10(b), a Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or the Collateral, or any part thereof thereof, for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part substantially all of the Property for other than actual occupancy by a space Tenant thereunder tenant thereunder, or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii. Notwithstanding anything to the contrary contained in this Section 5.2.10(c), Whitehall Guarantor and/or its Affiliates may purchase the membership interests of Park Central Realty Associates LLC in W2001 Park Central Hotel Realty, L.L.C. without violating the provisions of this Section 5.2.10(c) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereofand without Lender’s consent.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following transfers shall not be required deemed to be a Transfer: (i) the sale or transfer, in connection with one or a series of Transferstransactions, of not more than ten forty-nine percent (1049%) of the stockstock in a Restricted Party; provided, however, no such sales or transfers shall result in the change of voting control in the Restricted Party, and as a condition to each such sale or transfer, Lender shall receive not less than thirty (30) days prior notice of such proposed sale or transfer, and (ii) the sale or transfer, in one or a series of transactions, of not more than forty-nine percent (49%) of the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer sales or transfers shall result in the Change change of Control voting control in a the Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and as a condition to each such Transfersale or transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfersale or transfer. In addition, at all times, the Whitehall Guarantor must continue to control Borrower and own, directly or indirectly, at least a fifty-one percent (51%) interest in Borrower.
(e) Lender shall pay any not withhold its consent to a transfer of the Property to a Permitted Transferee (including, without limitation, an Affiliate of Borrower that is a Permitted Transferee) provided that (i) no Event of Default or Mortgage Loan Event of Default shall have occurred and remain uncured; (ii) the Permitted Transferee shall have executed and delivered to Lender a modification of the terms of the Mortgage Loan Agreement, the Mortgage Note, the Mortgage or the other Mortgage Loan Documents in form and substance acceptable to Lender; (iii) the Permitted Transferee shall have executed and delivered to Mortgage Lender an assumption of the Mortgage Loan Agreement, the Mortgage Note, the Mortgage and the other Mortgage Loan Documents as so modified by the Permitted Transferee in form and substance acceptable to Lender, evidencing such Permitted Transferee’s agreement to abide and be bound by the terms of the Mortgage Note, the Mortgage Loan Agreement and the other Mortgage Loan Documents, subject to the provisions of Section 10.4 hereof; (iv) the principals of the Permitted Transferee shall have executed and delivered to Lender a modification of the terms of this Agreement, the Note, the Pledge Agreement or the other Loan Documents in form and substance acceptable to Lender; (v) the principals of the Permitted Transferee shall have executed and delivered to Lender an assumption of this Agreement, the Note, the Pledge Agreement and the other Loan Documents in form and substance acceptable to Lender, evidencing such Person’s agreement to abide and be bound by the terms of the Note, this Agreement, the Pledge and the other Loan Documents, subject to the provision of Section 10.4 hereof; (vi) Lender shall have received payment of all reasonable out-of-pocket costs of fees and expenses incurred in connection with such Transfers (including transfer including, without limitation, all of Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred expenses in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date approval of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage cost of any insolvency actthird party reports, legal fees and expenses, Rating Agency fees and expenses or any act for required legal opinions; (vii) Lender shall have received payment of a non-refundable $5,000 application fee and, in the benefit event the Permitted Transferee is not an Affiliate of debtors within seven Borrower, Mortgage Lender shall have received payment of an assumption fee equal to one half of one percent (70.5%) years prior to the date of the proposed Transfer;
Aggregate Outstanding Principal Balance; (viviii) the Permitted Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory have delivered to Lender in all respects, including by entering into an assumption agreement a nonconsolidation opinion reflecting the proposed transfer satisfactory in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
; (ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all received satisfactory evidence of the liabilities and obligations principals of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the LenderTransferee’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection continued compliance with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.the
Appears in 1 contract
Sources: First Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property Collateral in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent Except in connection with a release of Lender, and except an Individual Property or an Out Parcel pursuant to the extent otherwise terms and conditions set forth in this Sections 2.5 and 2.9 hereof or the substitution of an Individual Property pursuant to the terms and conditions set forth in Section 5.2.102.8 or the permissible easements provided for in Section 2.10 of the Mortgage Loan Agreement, Borrower shall not, and shall not permit any Restricted Party Mortgage Borrower or Baltimore Owner, to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Collateral or Individual Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty (collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 hereof and encumbrances described in Section 5.2.10(d)(vi) below, without (i) the prior written consent of Lender and (Bii) Permitted Transfersif a Securitization has occurred or is pending within thirty (30) days, delivery to Lender of written confirmation from the Rating Agencies that the Transfer will not result in the downgrade, withdrawal or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any qualification of the foregoing without Lender's prior written consentthen current ratings assigned to any Securities or the proposed rating of any Securities.
(c) A Transfer shall include include, but not be limited to: (i) an installment sales agreement wherein any Individual Borrower agrees to sell the Property Collateral or any part thereof or Mortgage Borrower or Baltimore Owner agrees to sell the Properties, or any part therefor, in each case for a price to be paid in installments; (ii) an agreement by Borrower, Mortgage Borrower and/or Baltimore Owner leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s its respective right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest interests or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10Sections 5.2.10(a), Lender’s consent (b) and (c) hereof, the following transfers shall not be required deemed a Transfer: (i) a transfer by devise or descent or by operation of law upon the death of a member, partner or shareholder of a Restricted Party; (ii) the Sale or Pledge, in connection with one or a series of Transferstransactions, of not more than ten forty-nine percent (1049%) of the stock, general partnership interest or managing membership interest (as the case may be) in a Restricted Party; provided, however, no such transfers shall result in the change of voting control in the Restricted Party, and as a condition to each such transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed transfer, (iii) the Sale or Pledge, in one or a series of transactions, of not more than forty-nine percent (49%) of the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfertransfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. transfer, (iv) transfers, issuances, pledges and redemptions of stock in Wyndham, so long as (A) Wyndham (or its successor) is (or is Controlled by) a Public Company and (B) the surviving entity is primarily involved in, or has a significant business line involving, the ownership and operation of real estate similar to the Properties, (v) the merger or consolidation of Wyndham, provided that the surviving entity of such merger or consolidation is (or is Controlled by) (A) a Public Company, and (B) primarily involved in, or has a significant business line involving, the ownership or operation of real estate similar to the Properties, (vi) the granting of easements, cross-easements, agreements, restrictions, reservations and rights in the ordinary course of business for use, access, water and sewer lines, telephone and telegraph lines, electric lines or other utilities or for other similar purposes, provided that no such easements, agreements, restrictions or rights shall materially impair the utility and/or operation of any Individual Property or any Individual Borrower’s ability to repay the Debt as it becomes due, (vii) transfers of direct or indirect interests in any Mortgage Borrower, Mortgage Principal, Baltimore Owner or Individual Borrower shall pay any and all reasonable outto Affiliates of Wyndham (or its successor) provided that after such transfers (A) Wyndham (or its permitted successor) owns, directly or indirectly, not less than fifty-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (151%) of the outstanding principal balance of the Loan at the time of legal and beneficial ownership interests in such transfer;
(ii) Individual Borrower, Mortgage Principal, Mortgage Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender Baltimore Owner and (B) all certificatessuch Individual Borrower, agreementsMortgage Principal, covenants Mortgage Borrower and legal opinions reasonably required Baltimore Owner are Controlled, directly or indirectly, by Lender;
Wyndham (or its permitted successor), (viii) pledges of direct and indirect interests in any Borrower, Mortgage Principal, Mortgage Borrower, Baltimore Owner and any Mezzanine Borrower to any Mezzanine Lender as collateral for a Mezzanine Loan and the exercise by any Mezzanine Lender of its remedies under the Mezzanine Loan Documents, (ix) a conversion of Wyndham’s preferred stock to common stock and/or the conversion of Wyndham to a real estate investment trust and (x) Prior the recapitalization of Wyndham and the related transactions contemplated by the Recapitalization and Merger Agreement dated as of April 14, 2005 by and among Wyndham International, Inc., WI Merger Sub, Inc., Apollo Investment Fund IV L.P., AIF/THL PAH LLC, BCP Voting Trust, as Trustee for the Beacon Partners Voting Trust, ▇▇▇▇▇▇ ▇. ▇▇▇ Equity Fund IV, L.P., ▇▇▇▇▇▇ ▇. ▇▇▇ Foreign Fund IV, L.P. and ▇▇▇▇▇▇ ▇. ▇▇▇ Foreign Fund IV-B, L.P., as the same may be amended, restated, supplemented or otherwise modified from time to any release of Guarantor, one time (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities “Recap Agreement”). In addition (but not including and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement in addition to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property mergers and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager consolidations pursuant to the Recap Agreement) on a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial conditionone time basis, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision Wyndham may merge or consolidate with a public or private entity or engage in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth a transaction described in Section 5.2.10(e)(i): (i5.2.10(d)(iv) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of above in which the date of this Agreement (each a “Current Owner”)surviving entity is not, and (ii) to immediate family members (which shall be limited to is not Controlled by, a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), Public Company provided each of the following conditions is satisfied: that (A) no Default after such merger, consolidation, or Event of Default has occurred and is continuing; (BSale or Pledge described in Section 5.2.10(d)(iv) Lender has received each Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is completeMortgage Principal, the persons with Control of Mortgage Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower Baltimore Owner shall continue to comply with the terms of Section 4.1.30 hereof, (B) such merger or consolidation or Sale or Pledge is to a Qualified Transferee or to a Person Controlled by a Qualified Transferee which Qualified Transferee shall Control and own directly or indirectly, not less than 50% of the direct or indirect legal and beneficial ownership interests of each Individual Borrower and Baltimore Owner, and (C) the surviving entity is primarily involved in, or has a significant business line involving, the ownership and operation of real estate similar to the Properties. Furthermore, notwithstanding the provisions of Sections 5.2.10(a), (b) and (c) hereof, in the event that an entity, which is an indirect owner of a Minority Interest Borrower and which is not a Principal (as such term is defined in the Mortgage Loan Agreement, as the context requires) of an Individual Borrower, Mortgage Borrower or Baltimore Owner, forms a subsidiary to acquire an asset and thereafter redeems the interests of one or more minority interest holders of such indirect owner (which redeemed minority interest holders shall not be Affiliates of Guarantor) by transferring all or a portion of the direct legal and beneficial interests in such newly formed subsidiary to such minority interest holders (or their designees), such formation, redemption and transfer shall not constitute a Transfer and, subject to compliance with the immediately following sentence, shall not otherwise be a violation of the terms of this Agreement or require Lender’s consent. Notwithstanding anything to the contrary contained in this Agreement, no sale, pledge or other transfer shall be permitted of any direct (as opposed to indirect) interests in any entity in which any Individual Borrower, Mortgage Principal, Mortgage Borrower or Baltimore Owner owns a direct or indirect interest except pursuant to Section 4.1.31 5.2.10(f). In connection with any transfer or merger permitted under this Section 5.2.10, Borrower shall deliver an Additional Insolvency Opinion if, after such transfer or merger, more than forty-nine percent (49%) of any direct legal or beneficial interest in any Individual Borrower, Mortgage Principal, Mortgage Borrower or Baltimore Owner, as the case may be (or in any constituent entity of any Individual Borrower, Mortgage Principal, Mortgage Borrower or Baltimore Owner that is required to comply with the terms of Section 4.1.30 hereof), is owned by a new or successor entity. Such Additional Insolvency Opinion shall be reasonably acceptable to (I) Lender, prior to a Securitization or (II) the Rating Agencies, if a Securitization has occurred. Notwithstanding anything to the contrary contained herein, pledges and hypothecations of indirect equity interests in any Individual Borrower, Mortgage Principal, Mortgage Borrower or Baltimore Owner shall be permitted provided (A) Wyndham (or its permitted successors) maintains Control of, and owns, directly or indirectly, not less than fifty-one percent (51%) of the legal and beneficial ownership interests in such Individual Borrower, Mortgage Principal, Mortgage Borrower or Baltimore Owner, as the case may be, and (B) any such pledges or hypothecations are in connection with the corporate credit facilities of Wyndham (or its permitted successors) and JPMorgan Chase Bank, N.A., as administrative agent, and Bear ▇▇▇▇▇▇▇ Corporate Lending Inc., as syndication agent, and the lenders party to that certain First-Lien Credit Agreement dated as of the date hereof, and JPMorgan Chase Bank, N.A., as administrative agent, and Bear ▇▇▇▇▇▇▇ Corporate Lending Inc., as syndication agent, and the lenders party to that certain Second-Lien Credit Agreement dated as of the date hereof, as amended, or another credit agreement with an institutional lender or a public bond offering to prepay or refinance in full or in part any such credit facility which an institutional lender or bondholders (or the trustee on their behalf), as applicable, shall be making or holding a loan to Wyndham (or its permitted successors) or its Affiliates (other than any Individual Borrower or its general partner or managing member). A foreclosure sale (or transfer in lieu thereof) of any such pledge or hypothecation to JPMorgan Chase Bank, N.A., or another institutional lender as collateral agent for syndicate lenders or another institutional lender, or the bond trustee, shall be permitted provided (1) Lender is given at least sixty (60) days prior written notice of the proposed foreclosure sale or transfer in lieu thereof; (2) the transferee is a reputable entity or person, creditworthy, with sufficient financial worth considering any obligations assumed and undertaken with respect to the Loan, as evidenced by financial statements and other information reasonably requested by Lender; (3) the Properties at all times shall continue to be managed by a Qualified Manager, and (4) and any and all such entities will comply with all of the requirements set forth in the Note, this Agreement, the Mortgages and the other Loan Documents.
(e) Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s a Transfer without Lender’s consentconsent to the extent required hereunder. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer. Notwithstanding anything to the contrary contained in this Section 5.2.10, (i) no transfer (whether or not such transfer shall constitute a Transfer) shall be made to any Prohibited Person and (ii) in the event any transfer (whether or not such transfer shall constitute a Transfer) results in any Person owning in excess of forty-nine percent (49%) of the ownership interest in a Restricted Party, Borrower shall, prior to such transfer, deliver an updated Insolvency Opinion to Lender, which opinion shall be in form, scope and substance reasonably acceptable in all respects to Lender and the Rating Agencies.
(f) Notwithstanding anything to the contrary contained in this Section 5.2.10, Lender shall not withhold its consent to a one-time sale, assignment, or other transfer of all of the Properties and of the Collateral provided that (i) Lender receives thirty (30) days prior written notice of such transfer, (ii) no Event of Default has occurred and is continuing and (iii) upon the satisfaction (in the reasonable determination of Lender) of the following matters:
(A) Mortgage Borrower (or Baltimore Owner, as the case may be) or Transferee shall pay any and all reasonable out-of-pocket costs incurred in connection with the transfer (including, without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes);
(B) The proposed transferee (the “Transferee”) shall be one or more special purpose bankruptcy remote entities, each of which (i) complies with all of the requirements of Section 4.1.30 hereof and whose organizational documents are substantially similar to Mortgage Borrower’s and Baltimore Owner’s organizational documents, or if not substantially similar, acceptable to the Rating Agencies and (ii) is Controlled by a Qualified Transferee, which Qualified Transferee shall own, directly or indirectly, not less than fifty percent (50%) of the legal and beneficial ownership interests in such Transferee;
(C) Transferee shall assume all of the obligations of Mortgage Borrower under the Note, this Agreement, the Mortgages and the other Mortgage Loan Documen
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Wyndham International Inc)
Transfers. (a) Borrower acknowledges that Lender has the Administrative Agent and the Lenders have examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals and (if Borrower is a trust) beneficial owners Sponsor in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security direct or indirect security, as the case may be, for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has the Administrative Agent and the Lenders have a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender the Lenders can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of LenderAdministrative Agent and the Majority Lenders, and except to the extent otherwise set forth in this Section 5.2.104.2.17, Borrower shall not, and shall not permit any Restricted Party other Person having a direct or indirect ownership or beneficial interest in Borrower to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, to or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record, but, in any case, other than to or in favor of any other Loan Party)
(i) the any Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an direct interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, Borrower or Borrower TRS or (iii) enter into any plan interest, direct or indirect, in any Loan Party or any legal or beneficial interest therein resulting in a Change of division, or divide, establish Control (a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent“Transfer”).
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property one or more Properties or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the any Property for a purpose other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge Transfer of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venturepartnership, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge Transfer of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge Transfer of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member non‑member manager (or if no managing member, any member) or the Sale or Pledge Transfer of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge Transfer of non-managing non‑managing membership interests or the creation or issuance of new non managing non‑managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge Transfer of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or and (vii) the removal any pledge, hypothecation, assignment, transfer or the resignation other encumbrance of the managing agent (including an Affiliated Manager) any direct or indirect ownership interest in Borrower or any other than in accordance with Section 5.1.22 hereofLoan Party.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stockforegoing, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such following Transfers (including Lenderherein, the “Permitted Transfers”) shall be permitted hereunder without Administrative Agent’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditionsMajority Lenders’ consent:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of an Eligible Lease with an Eligible Tenant entered into in accordance with the Loan at the time of such transferDocuments;
(ii) Borrower shall pay a Permitted Lien or any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxesother Lien expressly permitted under the terms of the Loan Documents;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise a Transfer of a Property in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;accordance with Section 2.5
(iv) Transferee and Transferee’s Principals shall, as a Transfer of a Property to the date Borrower TRS in accordance with the terms of such transfer, have an aggregate net worth and liquidity acceptable to Lenderthis Agreement;
(v) Transfereea substitution of a Substitute Property for a Property in accordance with Section 2.5.2 or Section 5.3(b), Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;as applicable; and
(vi) Transferee shall assume all the Condemnation of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Property. Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets pay all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the reasonable documented costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender Administrative Agent in connection with the Additional Permitted any Transfer, whether or not consummated; (F) once the Additional Permitted such Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior deemed to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional be a Permitted Transfer, Borrower shall continue including, without limitation, all reasonable and documented fees and expenses counsel to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous TransferAdministrative Agent.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Pledged Collateral as a means of maintaining the value of the Property Pledged Collateral as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property Pledged Collateral so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the PropertyPledged Collateral.
(b) Without the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Property, the Pledged Collateral or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty or assignment of the Operating Lease in violation of the Mortgage Loan Agreement, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or and (iiiC) enter into subject to the provisions set forth in Section 5.2.10(d), (e) and (f) hereof, any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of Transfer permitted (without obtaining Mortgage Lender’s consent) under the foregoing without Lender's prior written consentMortgage Loan Documents.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property Pledged Collateral or any part thereof or Mortgage Borrower agrees to sell the Property, or any part thereof, in each case for a price to be paid in installments; (ii) an agreement by Mortgage Borrower or Operating Lessee leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Mortgage Borrower’s or Operating Lessee’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including including, without limitation, an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following shall not be deemed a Transfer: the Sale or Pledge in one or a series of transactions, of the direct or indirect equity interests in Borrower or direct or indirect interests in any Restricted Party (excluding the direct interests in Mortgage Borrower or any Mezzanine Borrower); provided, that, (i) after giving effect to such Sale or Pledge, (A) BREP VI and/or Strategic (I) shall own not less than fifty-one percent (51%) of the direct or indirect legal, economic and beneficial interests in Borrower, in the aggregate and (II) shall Control Borrower, or (B) (I) Strategic shall own not less than 36.3747% of the direct or indirect legal, economic and beneficial interest in Borrower and (II) an Approved BREP Transferee shall own the remaining direct or indirect, legal, economic and beneficial interests in Borrower, (ii) Lender shall receive notice of any Sale or Pledge described in this Section 5.2.10(d) not less than thirty (30) days following the consummation thereof (but the failure to deliver any such notice shall not cause the applicable Sale or Pledge to be a Transfer and shall not constitute an Event of Default unless such failure continues for ten (10) Business Days following notice of such failure from Lender), (iii) no Sale or Pledge of any direct interest in any Mortgage Borrower or Operating Lessee shall be permitted, (iv) for so long as the Mezzanine B Loan shall remain outstanding, no such Sale or Pledge of any direct interests in Borrower shall be permitted, (v) for so long as the Mortgage Loan or any Mezzanine Loan shall remain outstanding, (A) no pledge or other encumbrance of any direct interests in any Restricted Pledge Party shall be permitted (other than the pledges securing the Mortgage Loan, the Loan or the Mezzanine B Loan), and except that a pledge of the direct ownership interests in the most upper-tier Restricted Pledge Party shall be permitted if such pledge directly or indirectly secures indebtedness that is also directly or indirectly secured by substantial assets other than the Property and the IP Collateral; and (B) no Restricted Pledge Party shall issue preferred equity that has the characteristics of mezzanine debt (such as a fixed maturity date, regular payments of interest, a fixed rate of return and rights of the equity holder to demand repayment of its investment), and (vi) none of Borrower, Mortgage Borrower, Operating Lessee, Operating Lessee GP or North Beach Company shall fail to be a Special Purpose Entity by reason of such Sale or Pledge. If after giving effect to any such Sale or Pledge, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion acceptable to Lender and the Approved Rating Agencies. Notwithstanding anything to the contrary contained in this Agreement, no notice to, or consent of, Lender shall be required in connection with one any Sale or a series Pledge of Transfers, of not more than ten percent direct or indirect interests in any Excluded Entity.
(10%e) No Transfer of the stock, Property and assumption of the limited partnership Loan shall occur during the period that is sixty (60) days prior to and sixty (60) days after a Securitization. A Transfer of the Property or 100% of the legal or beneficial ownership interests therein or non-managing membership interests in Borrower and assumption of the entire Loan not otherwise permitted by Section 5.2.10(d) to a Qualified Transferee shall be permitted without Lender’s consent (as the case may be) in a Restricted Party“Permitted Assumption”); provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, provided that Lender shall receive not less than receives thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any Transfer and all reasonable out-of-pocket costs no Event of Default has occurred and expenses incurred in connection with is continuing at the time such Transfers (including Lender’s counsel fees Permitted Assumption is consummated, and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one percent Two Hundred Thousand and No/100 Dollars (1%) of the outstanding principal balance of the Loan at the time of such transfer;$200,000.00).
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferPermitted Assumption (including, including without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Approved Rating Agencies pursuant to clause (x) below);
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by LenderIntentionally Omitted;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to LenderIntentionally Omitted;
(v) Transferee, Qualified Transferee and Qualified Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage subject of any insolvency act, or any act for the benefit of debtors Bankruptcy Action within seven (7) years prior to the date of the proposed Transfer;
(vi) Qualified Transferee shall assume all of the obligations of Mortgage Borrower under the Mortgage Loan Documents in a manner satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There All of the entities which own interests in the Qualified Transferee similar to the interests in Mortgage Borrower owned by Borrower (the “Mezzanine Entities”): (A) shall assume the Loan and all the agreements of Borrower under the Loan Documents (and without limiting the foregoing, all of the ownership interests in the Qualified Transferee, as applicable, all payments thereon and all proceeds thereof shall be pledged to Lender on terms no material litigation or regulatory action pending or threatened against Transfereeless favorable than the pledge of the Pledged Collateral under the Pledge Agreement), Transferee’s Principals or Related Entities which is not shall be evidenced by new loan documents substantially similar (in form and substance) to the Loan Documents and otherwise reasonably acceptable to Lender in order to properly reflect the new ownership structure and the pledge of the interests thereunder, (B) shall each be a bankruptcy-remote Special Purpose Entity, and (C) shall otherwise have a legal, financial and ownership structure that is (1) substantially the same as Borrower, or (2) at least as favorable to Lender, as determined by Lender in its reasonable discretion, as the legal, financial and ownership structure of Borrower;
(viii) TransfereeThere shall be delivered to Lender opinions of counsel, Transferee’s Principals in form, substance and Related Entities shall not have defaulted under its or their obligations from counsel satisfactory to Lender as Lender requests on the following matters, subject to exceptions and conditions customarily contained in such opinions: (A) an “Additional Insolvency Opinion” with respect to any the Mezzanine Entities and such of their Affiliates as shall be requested by Lender, (B) such other Indebtedness in bankruptcy related opinions as shall be requested by Lender, including an opinion that no fraudulent conveyance or preference results from the transfer of the Property and the assumption by the Mezzanine Entities of the obligations of Borrower of the Loan Documents, and all related transactions, and (C) all certificates, agreements necessary to evidence the Permitted Assumption and a manner which is not due authority, execution and enforceability opinion reasonably acceptable to Lender;
(ix) There shall be no material litigation relating to the creditworthiness or reputation of Qualified Transferee, Qualified Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Qualified Transferee’s Principals (“Related Entities”), or regulatory action pending or threatened against Qualified Transferee, Qualified Transferee’s Principals or any Related Entity;
(x) Intentionally omitted;
(xi) Qualified Transferee must be able to satisfy all representations and covenants in Section 4.1.30 hereof (or in the event of a transfer of 100% of the equity interests in Borrower, Borrower shall continue to satisfy all representations and covenants in Section 4.1.30), and in all cases Qualified Transferee and Qualified Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Qualified Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and, following a Securitization, satisfactory to the Approved Rating Agencies and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(xxii) Prior If required by Lender, following or in connection with a Securitization, Qualified Transferee shall be approved by the Approved Rating Agencies, which approval, if required by Lender, shall take the form of a Rating Agency Confirmation with respect to any release such Permitted Assumption; provided that a written waiver or acknowledgment from one or more of Guarantorthe Approved Rating Agencies indicating its decision not to review the Permitted Assumption for which the Rating Agency Confirmation is sought shall be deemed to satisfy the required for the Rating Agency Confirmation with respect to such Approved Rating Agency.
(xiii) Guarantor shall be released from the Guaranty for all liability accruing after the date of a Transfer, (A) so long as one (1) or more substitute guarantors is a Qualified Transferee (excluding clause (iv) or (v) of the definition thereof) or is otherwise acceptable to Lender shall have in its sole discretion and such substitute guarantor has assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity or has executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to LenderLender in its sole discretion, in each case covering all liability accruing after the date of such assumption or execution and (B) Borrower has delivered to Lender customary legal opinions relating to authorization and enforceability of the additional guaranty contemplated above, substantially similar in form and substance to the opinions delivered to Lender on the Closing Date relating to the Guaranty, or otherwise in form and substance reasonably acceptable to Lender in its sole discretion, including, to the extent the Guarantor being released was included in the Insolvency Opinion delivered at closing, an Additional Insolvency Opinion with respect to any replacement guarantor.
(xixiv) Borrower shall deliver, at its sole cost and expense, an endorsement to the UCC Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property Pledged Collateral and naming the Qualified Transferee as owner of the PropertyPledged Collateral, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property Pledged Collateral shall not be subject to any additional exceptions or liens other than those contained in the UCC Title Insurance Policy issued on the date hereof and the Permitted Encumbrances relating thereto;
(xv) Lender shall have approved the Qualified Transferee’s owner’s title insurance policy with respect to the Property, subject only to the Permitted Encumbrances;
(xiixvi) If applicable, such Transfer has been approved or deemed approved under the Mortgage Loan Documents by Mortgage Lender and all conditions set forth in the Mortgage Loan Documents relating thereto have been satisfied as determined by Lender in its reasonable discretion and as if each reference therein to “Lender” were to mean Lender and not Mortgage Lender;
(xvii) The Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement;
(xviii) Borrower or Qualified Transferee, at its sole cost and expense, shall deliver to Lender an Additional Insolvency Opinion reflecting such Transfer satisfactory in form and substance to Lender; and
(xiiixix) The Property meets Borrower shall have obtained Mezzanine B Lender’s prior written consent to such Permitted Assumption, which consent shall not be unreasonably withheld, conditioned or delayed. Immediately upon a Transfer to such Qualified Transferee and the satisfaction of all of the Lender’s underwriting standards related above requirements, the named Borrower and Guarantor herein shall be released from all liability under this Agreement, the Note, the Pledge Agreement and the other Loan Documents for acts or omissions occurring after such Transfer. The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to its financial condition, cash flow, operating income, physical condition, management and operationprovide written evidence thereof reasonably requested by Borrower.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.im
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Strategic Hotels & Resorts, Inc)
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its members, stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owners, as applicable, owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other ObligationsObligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and Borrower shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest any interest, direct or indirect, in any Restricted PartyParty or (iii) incur Indebtedness (other than the Indebtedness permitted pursuant to the terms of this Agreement, and further provided that this clause (iii) shall not apply to Guarantor) (any of the foregoing transactions, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and hereof, (B) the Loan Documents, and (C) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentEncumbrances.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof thereof, for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part substantially all of the Property for other than actual occupancy by a space Tenant thereunder tenant thereunder, or a sale, assignment or other transfer of, ‑70 ‑ or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member non‑member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing non‑managing membership interests or the creation or issuance of new non managing non‑managing membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following transfers shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal deemed to no longer be a Key Principal of BorrowerTransfer, and so long as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender applicable conditions contained herein shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to been fulfilled, such transfer may occur without consent from Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.:
Appears in 1 contract
Sources: Loan Agreement (Cole Office & Industrial REIT (CCIT II), Inc.)
Transfers. (a) Borrower acknowledges that Administrative Agent and Lender has have examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals members and (if Borrower is a trust) beneficial owners owners, as applicable, and principals of Borrower in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Administrative Agent and Lender has have a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender Administrative Agent on behalf of ▇▇▇▇▇▇ can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of Lender, and except Except (i) to the extent otherwise set forth in this Section 5.2.10, (ii) with respect to the release of one or more Individual Properties or any portion thereof (and related collateral) in accordance with this Agreement and (iii) to the extent such Transfer constitutes a Permitted Transfer or Permitted Debt, without the prior written consent of Lender, Borrower shall not, not and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (ix) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant purchase options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Individual Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan therein, (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) or (iiy) permit a Sale or Pledge of an interest in any Restricted PartyParty or (z) Borrower entering into, other than or causing the Property to be subject to, any PACE Debt. Any Transfer made without ▇▇▇▇▇▇’s prior written consent (A) to the extent that such consent is required pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consent.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee null and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lendervoid.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the creditworthiness and experience of Borrower and its stockholdersthe Restricted Parties, general partnersas applicable, members, Key Principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loanloan secured by the Security Instrument, and that Lender will continue to rely on Borrower’s such Restricted Parties’ direct or indirect ownership and control and/or operation of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other ObligationsDebt. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property.
(b) Without the shall not without Lender’s prior written consent of Lender(not to be unreasonably withheld, conditioned or delayed) and except to the extent as otherwise set forth expressly provided in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): : (i) sell, assign, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, transfer or otherwise dispose of its legal or beneficial interests in the Property or any part thereof other than pursuant to Leases permitted under, and entered into in accordance with, Section 5.1.20 hereof, and/or with respect to other Permitted Encumbrances, (ii) permit any owner, directly or indirectly, of an ownership interest the Property, to transfer or dispose of such interest, whether by transfer of stock or other interest in a Restricted Party, or otherwise, (iii) [intentionally omitted], (iv) mortgage, hypothecate or otherwise encumber or grant a security interest in the Property or any part thereof, (v) sell, assign, convey, transfer, mortgage, encumber, grant a security interest in, or otherwise transfer or dispose of any direct or indirect ownership interest in any Restricted Party, or permit any Restricted Party that owns an interest in another Restricted Party to do the same, or (directly or indirectlyvi) file a declaration of condominium with respect to the Property (any of the foregoing transactions, voluntarily or involuntarilya “Transfer”). Notwithstanding the foregoing, by operation for purposes hereof, a “Transfer” shall not include Permitted Transfers. Further notwithstanding the foregoing, for purposes of law or otherwisedetermining recourse liability pursuant to Section 9.3, and whether or a “Transfer” shall not for consideration or include any of recordthe following (1) the Property granting of, amendment of, extension or renewal of, or any part thereof or other action taken with respect to any legal or beneficial interest therein or Permitted Encumbrance (without limiting Borrower’s obligations with respect to any interest Permitted Encumbrances pursuant to the terms and provisions of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents), (2) the settlement of any claim, dispute, litigation or regulatory proceeding (ii) permit a Sale or Pledge of an interest in without limiting Borrower’s obligations with respect to any Restricted Party, other than (A) such settlements pursuant to Leases of space in the Improvements to Tenants in accordance with the terms and provisions of Section 5.1.20 this Agreement and the other Loan Documents), (B3) Permitted Transfersthe expenditure of funds by Borrower or any other Restricted Party (without limiting Borrower’s obligations with respect to any such expenditures pursuant to the terms and provisions of this Agreement and the other Loan Documents), or (iii4) enter into any plan the disposition or removal of divisionpersonal property owned or leased by Major Tenant to the extent not prohibited under the Major Tenant Lease, or divideprovided, establish a protected serieshowever, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentshall not preclude a determination that the foregoing result in recourse liability for reasons other than being deemed a Transfer.
(c) A Transfer shall include (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(db) Notwithstanding the provisions of this Section 5.2.105.2.10(a), Lender’s consent shall not be required in connection with (1) one or a series of Transfers, of not more than ten up to forty-nine percent (1049%) of the stock, the limited partnership interests, membership interests or non-managing membership beneficial interests (as the case may be) in a Restricted Party, (2) one or a series of Transfers of the stock in Sponsor, (3) one or a series of Transfers of the limited partnership interests in Operating Partnership and (4) one or a series of Transfers of the direct membership interests owned as of the Closing Date by CF Deerfield Holdings, LLC in Borrower to the Operating Partnership; provided, however, no (x) after giving effect to each such Transfer described in clauses (1), (2), (3) and (4), Borrower and Guarantor each shall result be Controlled, directly or indirectly, by CFLP (or in connection with any Transfer pursuant to clause (4) above resulting in Operating Partnership acquiring ninety-five percent (95%) of the Change of Control membership interests owned by CF Deerfield Holdings, LLC in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, Sponsor), and Borrower shall continue to comply with the representations, warranties and covenants under Sections 4.1.30 (Special Purpose Entity), 4.1.34 (Investment Company Act), 4.1.35 (Embargoed Persons), 5.1.23 (Embargoed Persons) and 5.2.9 (ERISA) and upon reasonable request of Lender, from time to time, Borrower will reaffirm its ongoing compliance with the same; and (y) as a condition to any Transfers described in clause (4) above, upon Operating Partnership acquiring ninety-five percent (95%) of the membership interest owned by CF Deerfield Holdings, LLC in Borrower, (A) Sponsor shall have assumed all of the obligations of Guarantor under the Loan Documents and become the replacement Guarantor in accordance with the terms of the Loan Documents, (B) Borrower shall have delivered prior written notice to Lender of such Transfer and (C) the Operating Partnership shall have become the managing member of Borrower in accordance with the terms of Borrower’s operating agreement and Operating Partnership shall Control Borrower and the Property. In addition, (i) after giving effect to each such Transfer, Lender Guarantor (or a Qualified Replacement Guarantor) shall receive Control the Borrower or be under common Control with the Borrower, and (ii) if such Transfer is a Material Owner Transfer, Borrower shall deliver with respect to each transferee, prior to such transfer and at Borrower’s sole cost and expense, “know your customer” searches confirming compliance with the sections referenced above, and verifying the transferee has not less than been convicted of a felony, is not then, nor has it been in the prior seven (7) years, the subject of a Bankruptcy Action. If a Transfer described in this clause (b) involves a Transfer of a direct interest in Borrower, no such Transfer shall be permitted during the period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization.
(c) Notwithstanding Section 5.2.10(a), Lender’s consent shall not be required in connection with a Transfer of the direct or indirect interests in Borrower; provided, however, that after giving effect to such Transfer, Borrower and Guarantor each shall be Controlled, directly or indirectly, by CFLP, and after giving effect to such Transfer, Borrower shall continue to comply with the representations, warranties and covenants under Sections 4.1.30 (Special Purpose Entity), 4.1.34 (Investment Company Act), 4.1.35 (Embargoed Persons), 5.1.23 (Embargoed Persons) and 5.2.9 (ERISA). Upon reasonable request of Lender, from time to time, Borrower will reaffirm its ongoing compliance with the same. In addition, (i) Guarantor or a Qualified Replacement Guarantor at all times must continue to Control the Borrower, or be under common Control with the entity that Controls Borrower, and (ii) if such Transfer is a Material Owner Transfer, Borrower shall deliver with respect to each transferee, prior to such transfer and at Borrower’s sole cost and expense, “know your customer” searches confirming compliance with the sections referenced above, and verifying the transferee has not been convicted of a felony, is not then, nor has it been in the prior seven (7) years, the subject of a Bankruptcy Action. If a Transfer described in this clause (c) involves a Transfer of a direct interest in Borrower, no such Transfer shall be permitted during the period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization;
(d) Notwithstanding Section 5.2.10(a), at any time other than during the period commencing thirty (30) days prior to a Securitization and ending thirty (30) days after a Securitization, Borrower may undertake one or more Transfers of the entire Property to an unrelated third party transferee (or a Transfer of more than fifty percent (50%) of the direct or indirect beneficial interests in Borrower to an unrelated third party transferee in a single Transfer, to the extent such Transfer is not otherwise compliant with clause (c) above) and assumption of the entire Loan, provided that Lender receives thirty (30) days’ prior written notice of such proposed Transfer. Borrower shall pay any Transfer and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of further provided that the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) the proposed transferee of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower Property shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee be a Special Purpose Entity (the “Transferee”) or Transferee’s Principals which at the time of such transfer will be in compliance with, and must be able to satisfy all of, the representations, warranties and covenants contained in Section 4.1.30, Section 4.1.35, Section 5.1.23 and Section 5.2.9 and which shall have demonstrated expertise assumed in owning and operating properties similar in location, size, class and operation writing (subject to the Propertyterms of Section 9.3 hereof) and agreed to comply with all the terms, which expertise shall be reasonably determined by Lendercovenants and conditions set forth in this Agreement and the other Loan Documents, expressly including, without limitation the representations, warranties and covenants contained in Section 4.1.30, Section 4.1.35, Section 5.1.1 and Section 5.1.23 hereof;
(ivii) if the Loan is held by a REMIC Trust, Borrower shall deliver confirmation in writing from the Rating Agencies that such proposed Transfer will not cause a downgrading, withdrawal, reduction or qualification of the ratings in effect immediately prior to such Transfer for the Securities, or any class thereof, issued in connection with a Securitization which are then outstanding;
(iii) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity be (or be Controlled by) a Person satisfying the requirements for a Qualified Replacement Guarantor, Qualified Fund Manager or Qualified Real Estate Investor, or otherwise be reasonably acceptable to Lender;
(iv) Lender shall have received with respect to Transferee, prior to such Transfer and at Borrower’s sole cost and expense, “know your customer” searches confirming compliance with the sections referenced in clause (i) above, and verifying the transferee has not been convicted of a felony, is not then, nor has it been in the prior seven (7) years, the subject of a Bankruptcy Action;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer, unless otherwise reasonably acceptable to Lender;
(vi) if the Transfer involves Transfer of the Property, Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner reasonably satisfactory to Lender in all respects, including including, without limitation, by entering into an assumption agreement in form and substance reasonably satisfactory to Lender;
(vii) There there shall be no material litigation or regulatory action pending or threatened threatened, in writing, against Transferee, Transferee or Controlling Transferee’s Principals which in Lender’s reasonable judgment would likely result in a material adverse change in the financial condition, operations or Related Entities which is not acceptable to Lenderbusiness of Transferee or Guarantor;
(viii) Transfereeunless the Property is self-managed, the Property shall be managed by a Qualified Manager pursuant to a replacement Management Agreement;
(ix) Transferee and Controlling Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;
(ixx) Transferee no Event of Default shall have occurred and Transferee’s Principals must be able to satisfy all the representations continuing and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) if the Transfer involves a Transfer of the Property, Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance PolicyPolicy insuring the Security Instrument, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the fee estate (or leasehold estate, as applicable) of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted EncumbrancesEncumbrances relating thereto;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and[Reserved];
(xiii) The Property meets proposed Transfer shall be permitted under the terms of each Major Lease and Borrower shall have assigned each Major Lease to Transferee and Transferee shall have assumed, in writing, all obligations of landlord under each Major Lease;
(xiv) Transferee, at its sole cost and expense, shall deliver opinions regarding existence, authority and enforceability, which opinions may be relied upon by Lender, the Rating Agencies and their respective counsel, agents and representatives with respect to the proposed transaction;
(xv) Transferee shall deliver (1) all organizational documentation reasonably requested by Lender, which shall evidence due formation and existence, and shall comply with Section 4.1.30, and (2) all certificates, agreements or covenants reasonably required by Lender, provided that, in each case, the same do not increase its obligations, decrease its rights, or otherwise adversely affect Borrower, any other Affiliate of Borrower or Transferee, in each case, except to a de minimis extent;
(xvi) Prior to any release of Guarantor, if such a release is requested by Borrower, one (1) or more Qualified Replacement Guarantors (or substitute guarantors reasonably acceptable to Lender) shall have assumed all of the Lender’s underwriting standards related liabilities and obligations first arising thereafter of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to its financial condition, cash flow, operating income, physical condition, management Lender (and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to upon the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application execution of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or memberssame, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or then-existing Guarantor shall be released from any guaranty or indemnity agreement by virtue of and all liabilities under the Additional Permitted Transfer; Guaranty and Environmental Indemnity with respect to events first occurring thereafter);
(Dxvii) Borrower shall be responsible for have paid an assumption fee equal to (A) one-half of one percent (0.5%) of the costs then Outstanding Principal Balance in connection with the first such Transfer, and expenses (B) one percent (1.0%) of documenting the Additional Permitted then Outstanding Principal Balance in connection with the any subsequent Transfer; and
(Exviii) Borrower shall reimburse Lender for pay (or cause to be paid) (A) any and all actual reasonable out-of-pocket costs and expenses actually incurred by Lender in connection with such Transfer (including, without limitation, Lender’s reasonable counsel fees and disbursements), (B) all recording fees, title insurance premiums and mortgage and intangible taxes and (C) all the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower fees and management expenses of the Property are Rating Agencies (if any) pursuant to clause (ii) above. With respect to matters above in this Section 5.2.10(d) wherein Lender’s approval, satisfaction or consent is required, it is agreed that Lender shall not condition its approval, satisfaction or consent upon the same persons who have such Control payment of any other fee, and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of not otherwise be required to pay any documentation executed additional fee or expense to Lender, except as specifically provided in connection with the Additional Permitted Transfer promptly after execution thereof; clauses (xvii) and (Hxviii).
(e) Borrower shall have delivered satisfactory evidence [Reserved.]
(f) After any Transfer permitted hereunder or consented to Lender that, following the Additional Permitted Transferby Lender, Borrower shall continue to comply with shall, upon request, provide Lender an updated organizational chart certified by Borrower as true, correct and complete.
(g) [Reserved.]
(h) Notwithstanding the provisions of Section 4.1.31 hereof. Lender 5.2.10(a) above, Lender’s consent shall not be required to demonstrate in connection with a pledge of the direct or indirect interests in Sponsor by an Upstream Borrower as part of a financing secured by all or substantially all of the assets of such Upstream Borrower (such financing, together with any actual impairment renewal or replacement financing, an “Upstream Loan”).
(i) Borrower, without the consent of its security Lender, may grant easements, restrictions, covenants, reservations and right of way in the ordinary course of business for access, parking, water and sewer lines, telephone and telegraph lines, electric lines and other utilities or any increased risk for other similar purposes, provided that no such transfer, conveyance or encumbrance shall materially impair the utility and operation of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless Property or materially adversely affect the value of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.the Property or
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Transfers. (a) Each of Borrower and Operating Lessee acknowledges that Lender has examined and relied on the experience of Borrower Borrower, Operating Lessee and its their respective stockholders, general partners, members, Key Principals principals and (if Borrower or Operating Lessee is a trust) beneficial owners in owning and operating properties such as the Property Properties in agreeing to make the Loan, and will continue to rely on Borrower’s and Operating Lessee’s ownership and control of the Property Properties as a means of maintaining the value of the Property Properties as security for repayment of the Debt and the performance of the Other Obligations. Each of Borrower and Operating Lessee acknowledges that Lender has a valid interest in maintaining the value of the Property Properties so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the PropertyProperties.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.105.2.10 or the release of an Individual Property in accordance with this Agreement, neither Borrower nor Operating Lessee shall not, and or shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property Properties or any part thereof or any legal or beneficial interest therein therein, (ii) Borrower or Operating Lessee entering into, or the Property being subject to, any interest of Borrower in the Loan (including any of its rights, duties and obligations under this Agreement and the other Loan Documents) PACE Debt or (iiiii) permit a Sale or Pledge of an interest in any Restricted Party, other than than, in each case, (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 5.1.21, and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentTransfers and Permitted Indebtedness.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower or Operating Lessee agrees to sell the Property Properties or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower or Operating Lessee leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s or Operating Lessee’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non non-managing membership interests; interests or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following Transfers shall not require the consent of Lender:
(i) The Sale or Pledge, in one or a series of transactions, of the direct or indirect equity interests in Borrower or Operating Lessee or direct or indirect interests in any Restricted Party (excluding the direct interests in Borrower, Operating Lessee and Mezzanine Borrowers (if any)); provided, that, (A) after giving effect to such Sale or Pledge (and in the case of a Sale or Pledge that is a pledge for security purposes, any subsequent foreclosure thereon), BREP or a Public Vehicle or, following a Permitted Assumption, the applicable Qualified Transferee (x) shall own not less than fifty-one percent (51%) of the economic and direct or indirect legal and beneficial interests in Borrower, Operating Lessee, Guarantor, Principal and Mezzanine Borrowers (if any) (on an unencumbered and look-through basis and without regard to the Preferred Shares) and (y) Control Borrower, Operating Lessee, Guarantor, Principal and Mezzanine Borrowers (if any), (B) upon the written request of Lender, Borrower shall deliver to Lender notice of each sale described in this Section 5.2.10(d)(i) not less than ten (10) days following such request, (C) no Sale or Pledge of any direct interest in any Borrower, Operating Lessee, Principal or Mezzanine Borrowers (if any) shall be permitted, (D) no Individual Borrower, Operating Lessee, Principal or Mezzanine Borrowers (if any) shall fail to be a Special Purpose Entity by reason of such Sale or Pledge, (E) for so long as the Loan or any Mezzanine Loan shall remain outstanding (I) no pledge of any direct interests in any Restricted Pledge Party shall be permitted (other than pledges securing the Loan or Mezzanine Loans (if any)) and except that a pledge of the direct ownership interests in the most upper-tier Restricted Pledge Party shall be permitted if such pledge directly or indirectly secures indebtedness that is also directly or indirectly secured by substantial assets other than the Properties and (II) no Restricted Pledge Party shall issue preferred equity that has the characteristics of mezzanine debt (such as a fixed maturity date, pledged ownership interests as security, regular payments of interest, a fixed rate of return and rights of the equity holder to demand repayment of its investment) and (F) with respect to any transferee that, as a result of such transfer, will hold a twenty percent (20%) or greater direct or indirect interest in, or control, Borrower (and such transferee owned less than twenty percent (20%) of the direct or indirect interest in Borrower or did not control Borrower on the Closing Date), Lender shall receive satisfactory “know your customer” compliance screening searches consisting of a search and evaluation of (x) OFAC sanctions and other government-required sanctions lists, (y) negative news screening of such holders, if any, associated with material derogatory information that could reasonably result in anti-money laundering risk to Lender related to terrorist or other financial crimes and (z) such statutes and other information reasonably required by Lender to confirm that Borrower and such transferee is not an Embargoed Person (Lender agrees to use diligent and commercially reasonable efforts to complete such “know your customer” diligence in accordance with this clause (F) within fifteen (15) Business Days after Lender receives the requested information necessary to conduct such diligence). If after giving effect to any such Sale, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party (excluding the Preferred Shares) are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party (excluding the Preferred Shares) as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and the Approved Rating Agencies. Notwithstanding anything to the contrary contained in this Agreement, (x) no notice to, or consent of, Lender shall be required in connection with one any Sale or Pledge of direct or indirect interests in any Excluded Entity or by and among any Excluded Entity and (y) no Restricted Pledge Party (other than Borrower, Operating Lessee, Principal or Mezzanine Borrowers (if any)) shall be restricted from any Sale or Pledge of its direct or indirect assets; provided such assets are not encumbered (or required to be encumbered) by the Loan or Mezzanine Loans. In connection with a series of TransfersSale or Pledge resulting in Guarantor no longer owning direct or indirect interests in Borrower, of not Operating Lessee, Principal or the Properties, Guarantor shall be released as a guarantor under the Guaranty for any acts occurring after such Sale or Pledge; provided that Borrower delivers a Substitute Guaranty from a Qualified Transferee that Controls Borrower or is under common Control with Borrower, which Substitute Guaranty shall include all liability for all such acts for which Guarantor was so released.
(ii) A Public Sale, provided, that (A) if after giving effect to any such Public Sale, more than ten forty-nine percent (1049%) in the aggregate of the direct or indirect interests in any Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) of the stockdirect or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and, to the extent a Securitization has occurred, the limited partnership Approved Rating Agencies; (B) to the extent a Securitization has occurred and such Public Sale results in BREP no longer Controlling Borrower, Lender shall have received a Rating Agency Confirmation from the Approved Rating Agencies with respect to any such Public Sale, (C) no Individual Borrower, Operating Lessee or Principal shall fail to be a Special Purpose Entity by reason of such sale, (D) no Transfer of any direct interest in any Borrower, Operating Lessee or Principal, or for so long as any Mezzanine Loan remains outstanding, in the related Mezzanine Borrower shall be permitted, (E) no Restricted Pledge Party shall issue preferred equity that has the characteristics of mezzanine debt (such as a fixed maturity date, pledged ownership interests as security, regular payments of interest, a fixed rate of return and rights of the equity holder to demand repayment of its investment) and (F) with respect to any transferee that, as a result of such transfer, will hold a twenty percent (20%) or nongreater direct or indirect interest in, or control, Borrower (and such transferee owned less than twenty percent (20%) of the direct or indirect interest in Borrower or did not control Borrower on the Closing Date), Lender shall receive satisfactory “know your customer” compliance screening searches consisting of a search and evaluation of (x) OFAC sanctions and other government-managing membership interests required sanctions lists, (y) negative news screening of such holders, if any, associated with material derogatory information that could reasonably result in anti-money laundering risk to Lender related to terrorist or other financial crimes and (z) such statutes and other information reasonably required by Lender to confirm that Borrower and such transferee is not an Embargoed Person (Lender agrees to use diligent and commercially reasonable efforts to complete such “know your customer” diligence in accordance with this clause (F) within fifteen (15) Business Days after Lender receives the requested information necessary to conduct such diligence). Upon completion of any such Public Sale subject to and in accordance with the provisions of this Section 5.2.10(d)(ii), Guarantor shall be released as a guarantor under the Guaranty for any acts occurring from and after such Public Sale; provided that Borrower delivers to Lender (x) a Substitute Guaranty for obligations and liabilities under the Guaranty occurring from and after such Public Sale from (1) a Replacement Guarantor or (2) a Public Vehicle that Controls Borrower or is under common Control with Borrower and (y) the organizational documents of such replacement guarantor, resolutions authorizing such replacement guarantor to enter into either the assumption of the Guaranty or the Substitute Guaranty and an enforceability and execution opinion covering the enforceability of such assumption of the Guaranty or the Substitute Guaranty against such replacement guarantor in the same form and substance as the case may be) enforceability opinion delivered to Lender on the Closing Date (or in a Restricted Partysuch other form as reasonably approved by Lender); provided, however, no if BREP is the Replacement Guarantor, Borrower shall not be required to deliver to Lender any of the organizational documents set forth above. Following any Transfer in accordance with this Section 5.2.10(d)(ii), the Public Vehicle shall be deemed to be an Excluded Entity. For purposes of clarity, the provisions of Section 5.2.3 and this Section 5.2.10 shall not restrict the Public Vehicle (or any direct or indirect owner of the Public Vehicle, but excluding any Borrower, Operating Lessee or any Mezzanine Borrower) from effectuating a restructuring and such Public Vehicle (or any direct or indirect owner of the Public Vehicle, but excluding any Borrower, Operating Lessee, or any Mezzanine Borrower) shall be permitted to effectuate a restructuring, including amending or modifying its organizational documents or commercial arrangements including any amendments or modifications reasonably determined by such Public Vehicle to be required to satisfy stock exchange, quotation system listing or trading requirements.
(iii) A Pledge made by Mezzanine Borrowers to secure the Mezzanine Loans in accordance with the Mezzanine Loan Documents or any Foreclosure.
(e) No Transfer and assumption of the Loan shall result occur during the period that is forty-five (45) days prior to and sixty (60) days after a rated Securitization, so long as such Securitization occurs within three (3) months of the date hereof. Otherwise, in addition to Borrower’s other rights expressly permitted under this Section 5.2.10, (X) a Transfer of all of the Properties or one hundred percent (100%) of the legal or beneficial interests therein or in Borrower, Operating Lessee or any other Loan Party to a new borrower (the “Transferee Borrower”) or (Y) a Transfer of more than forty-nine percent (49%) of the direct or indirect legal and beneficial interests in the Change of Control in a Restricted Party or cause any Key Principal to junior most Mezzanine Borrower or, if no longer be a Key Principal of Mezzanine Loan is then outstanding, Borrower, and as in each instance provided that the same does not otherwise constitute a condition to Permitted Transfer or is not otherwise permitted by Section 5.2.10(d) (a “Majority Equity Transfer”), shall each such Transferbe permitted without Lender’s consent (each, a “Permitted Assumption”), provided that Lender shall receive not less than receives thirty (30) days days’ prior written notice of such proposed Transfer. Borrower shall pay any Permitted Assumption and all reasonable out-of-pocket costs no Event of Default has occurred and expenses incurred is continuing at the time such Permitted Assumption is consummated, and further provided that in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(ePermitted Assumption pursuant to this Section 5.2.10(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditionsadditional requirements are satisfied:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) Lender’s Allocation of the outstanding principal balance of the Loan $250,000.00 at the time of such transferPermitted Assumption is consummated;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such TransferPermitted Assumption (including, including without limitation, Lender’s reasonable counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxestaxes and the fees and expenses of the Approved Rating Agencies pursuant to clause (vi) below);
(iii) The proposed transferee Transferee Borrower or, in the case of a Majority Equity Transfer, Borrower, must be (the “Transferee”A) a Qualified Transferee or (B) fifty-one percent (51%) or more owned (directly or indirectly) and Controlled by a Qualified Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as With respect to a Transfer of the date of such transferProperty, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transfereeif applicable, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) a Transferee Borrower shall assume all of the obligations of Borrower and Operating Lessee under the Loan Documents in a manner reasonably satisfactory to Lender in all material respects, including including, without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.t
Appears in 1 contract
Transfers. (a) Borrower acknowledges Borrowers acknowledge that Lender has examined and relied on the experience of Borrower Borrowers and its stockholders, general partners, members, Key Principals their direct and (if Borrower is a trust) beneficial owners indirect members in owning and operating properties such as the Property Collateral and Mortgage Borrowers in agreeing to make the Loan, and will continue to rely on Borrower’s Borrowers’ ownership and control of the Property Collateral as a means of maintaining the value of the Property Collateral as security for repayment of the Debt and the performance of the Other Obligationsobligations contained in the Loan Documents. Additionally, Borrowers acknowledge that Lender has examined and relied on the experience of Mortgage Borrowers and their general partners, members, principals and (if any Mortgage Borrower acknowledges is a trust) beneficial owners, as applicable, in owning and operating properties such as the Properties and in owning intellectual property such as the IP, in agreeing to make the Loan, and will continue to rely on Mortgage Borrowers’ ownership of the Properties and the IP as a means of maintaining the value of the Properties and the IP and, therefore, indirectly the value of the Collateral, as security for repayment of the Debt and the performance of the obligations contained in the Loan Documents. Borrowers acknowledge that Lender has a valid interest in maintaining the value of the Property Collateral so as to ensure that, should Borrower Borrowers default in the repayment of the Debt or the performance of the Other Obligationsobligations contained in the Loan Documents, Lender can recover the Debt by a sale of the PropertyCollateral.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower Borrowers shall not, and shall not permit any Transfer Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, license, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the any Property or any part thereof or any legal or beneficial interest therein therein, or any IP or any part thereof or any legal or beneficial interest of Borrower in therein, or the Loan (including Collateral or any of its rights, duties and obligations under this Agreement and the other Loan Documents) part thereof or any legal or beneficial interest therein; or (ii) permit a Sale or Pledge of an any interest in any Transfer Restricted PartyParty (any of the actions in the foregoing clauses (i) or (ii), a “Transfer”), other than than, notwithstanding anything to the contrary contained in this Section 5.2.10:
(A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and hereof;
(B) the pledge of the membership interests in each Mortgage Borrower as collateral for the Loan and, if applicable, the exercise of remedies by Lender including, without limitation, any Transfer of all or a portion of such membership interests in connection with a foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure under the Loan Documents, provided that any such exercise of remedies is performed in accordance with and subject to the conditions and restrictions set forth in the Intercreditor Agreement and as a condition precedent to any foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure of such membership interests the Lender shall pay to Mortgage Lender a transfer fee in an amount equal to 1.00% of the sum of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan Outstanding Principal Balance;
(C) the pledge of the membership interests in Borrower as collateral for the Second Mezzanine Loan and, if applicable, the exercise of remedies by Second Mezzanine Lender, including, without limitation, any Transfer of all or a portion of such membership interests in connection with a foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure under the Second Mezzanine Loan Documents, provided that any such exercise of remedies is performed in accordance with and subject to the conditions and restrictions set forth in the Intercreditor Agreement and as a condition precedent to any foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure of such membership interests the Second Mezzanine Lender shall pay to Mortgage Lender a transfer fee in an amount equal to 1.00% of the sum of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan Outstanding Principal Balance;
(D) the pledge of the membership interests in each Second Mezzanine Borrower as collateral for the Third Mezzanine Loan and, if applicable, the exercise of remedies by Third Mezzanine Lender, including, without limitation, any Transfer of all or a portion of such membership interests in connection with a foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure under the Third Mezzanine Loan Documents, provided that any such exercise of remedies is performed in accordance with and subject to the conditions and restrictions set forth in the Intercreditor Agreement and as a condition precedent to any foreclosure, strict foreclosure, public or private sale or transfer in lieu of foreclosure of such membership interests the Third Mezzanine Lender shall pay to Mortgage Lender a transfer fee in an amount equal to 1.00% of the sum of the Reduced Acquisition Loan Outstanding Principal Balance and the Construction Loan Outstanding Principal Balance;
(E) any Release Parcel Sale or an IP Sale, in each instance in accordance with the applicable provisions of Section 2.5 of the Mortgage Loan Agreement;
(F) Intentionally Deleted;
(G) any IP License or Adjacent Property IP License granted in accordance with the provisions of Section 5.1.26 hereof;
(H) the Permitted TransfersEncumbrances and Permitted IP Encumbrances;
(I) the issuance of new stock in, the merger or consolidation of, and/or the Sale or Pledge of the stock in, any Publicly Traded Entity who owns a direct or indirect ownership interest in any Transfer Restricted Party;
(iiiJ) enter into the transfer of indirect ownership interests in any plan Mortgage Borrower in order to create one or more new mezzanine borrowers for any New Mezzanine Loan as contemplated under the Mortgage Loan Agreement, including, without limitation, the transfers of division, or divide, establish a protected series, ownership interests which were necessary to create Third Mezzanine Borrowers and the admission of a new registered seriesmember in each of Second Mezzanine Borrowers in connection with the creation of Third Mezzanine Borrowers; and
(K) the transfer by deed of any applicable Partial Release Parcel to a Subsidiary Transferee and the subsequent transfer of all of the membership interests held by Adjacent Borrower in such Subsidiary Transferee, or convert to another form in each instance in accordance with Section 2.5.1(f) of incorporated or unincorporated business or other entity or provide the Mortgage Loan Agreement; provided, however, that in its operating agreement for any the case of each of the foregoing clauses (A) — (K), such Transfer shall only be permitted hereunder if it does not violate any Legal Requirements, including specifically, but without Lender's prior written consentlimitation, any Gaming Laws, or suspend or terminate any liquor license applicable to a Property.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein any Borrower or Mortgage Borrower, as applicable, agrees to sell a Property or any part thereof, the Property IP, the Collateral or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent shall not be required in connection with one or a series of Transfers, of not more than ten percent (10%) of the stock, the limited partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
Appears in 1 contract
Sources: First Mezzanine Loan Agreement (Hard Rock Hotel Holdings, LLC)
Transfers. (a) Borrower acknowledges that Lender ▇▇▇▇▇▇ has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower▇▇▇▇▇▇▇▇’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender ▇▇▇▇▇▇ has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender ▇▇▇▇▇▇ can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.105.2.9 or in connection with the release of any Individual Property in accordance with this Agreement, Borrower shall not, not and shall not permit any Restricted Party to do any of the following (collectively, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options to purchase with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) enter into, or permit the Property to be subject to, any PACE Debt, (iii) permit a Sale or Pledge of an interest in any Restricted Party, other than than, in each case, (A) pursuant to Leases of space in the Improvements to Tenants in accordance with the provisions of Section 5.1.20 5.1.18 and customary occupancy agreements with short-term hotel guests, and (B) Permitted TransfersTransfers and Permitted Indebtedness, or (iiiiv) enter Borrower dividing into any plan of division, two or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consentmore separate and distinct entities.
(c) A Transfer shall include include, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the any Individual Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part of the any Individual Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership interest, or the Sale or Pledge of non-managing membership interests or the creation or issuance of new non managing membership interests; interests or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.105.2.9, Lender’s consent the following Transfers shall not require the consent of Lender or the payment of any transfer fee:
(i) The Sale or Pledge, in one or a series of transactions, of the direct or indirect equity interests in Borrower or direct or indirect interests in any Restricted Party (excluding the direct interests in Borrower or Mezzanine Borrower, other than, for the avoidance of doubt, a Permitted Transfer set forth in clause (m) of the definition of “Permitted Transfer”); provided, that, (A) after giving effect to such Sale or Pledge (and in the case of a Sale or Pledge that is a pledge for security purposes, any subsequent foreclosure thereon), (x)
(1) Borrower and Principal (on an unencumbered and look through basis) are indirectly Controlled and at least 50.1% owned by ▇▇▇▇▇ OP and/or MGP OP, provided that (I) with respect to ▇▇▇▇▇ OP, ▇▇▇▇▇ OP is owned, managed or Controlled by ▇▇▇▇▇, a Qualified Advisor, a Qualified Transferee or a Public Vehicle and (II) with respect to MGP OP, MGP OP is managed and Controlled by MGP, a Public Vehicle or a Qualified Transferee, or (y) following a Public Sale, a Public Vehicle or, following a Permitted Assumption, the applicable Qualified Transferee (1) shall own not less than fifty-one percent (51%) of the economic and direct or indirect legal and beneficial interests in Borrower, Guarantor and Principal (on an unencumbered and look through basis) and (2) Control Borrower, Guarantor and Principal, (B) upon the written request of ▇▇▇▇▇▇, Borrower shall deliver to Lender notice of each sale described in this Section 5.2.9(d)(i) not less than ten (10) days following such request, (C) no Sale or Pledge of any direct interest in any Borrower, Mezzanine Borrower or Principal shall be permitted (other than, for the avoidance of doubt, a Permitted Transfer set forth in clause (m) of the definition of “Permitted Transfer”), (D) no Individual Borrower or Principal shall fail to be a Special Purpose Entity by reason of such Sale or Pledge, (E) for so long as the Loan shall remain outstanding (I) no pledge of any direct interests in any Restricted Pledge Party shall be permitted (other than pledges securing the Loan) and except that a pledge of the direct ownership interests in the most upper tier Restricted Pledge Party shall be permitted (other than pledges securing the Loan or Mezzanine Loan) if such pledge directly or indirectly secures indebtedness that is also directly or indirectly secured by substantial assets other than the Property and (II) no Restricted Pledge Party shall issue preferred equity that has the characteristics of mezzanine debt (such as a fixed maturity date, pledged ownership interests as security, regular payments of interest, a fixed rate of return and rights of the equity holder to demand repayment of its investment), and (F) with respect to any transferee that, as a result of such transfer, will hold a twenty percent (20%) or greater direct or indirect interest in, or control, Borrower and/or Principal (and such transferee owned less than twenty percent (20%) of the direct or indirect interest in Borrower and/or Principal or did not control Borrower and/or Principal on the Closing Date), Lender shall receive satisfactory “know your customer” compliance screening searches consisting of a search and evaluation of (x) OFAC sanctions and other government required sanctions lists, (y) negative news screening of such holders, if any, associated with material derogatory information that could reasonably result in anti-money laundering risk to Lender related to terrorist or other financial crimes and (z) such statutes and other information reasonably required by ▇▇▇▇▇▇ to confirm that Borrower and/or Principal, and such transferee is not an Embargoed Person (▇▇▇▇▇▇ agrees to use diligent and commercially reasonable efforts to complete such “know your customer” diligence in accordance with this clause (F) within fifteen (15) Business Days after ▇▇▇▇▇▇ receives the requested information necessary to conduct such diligence). If after giving effect to any such Sale or Pledge, more than forty-nine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and the Approved Rating Agencies. Notwithstanding anything to the contrary contained in this Agreement, (x) no notice to, or consent of, Lender shall be required in connection with one any Sale or Pledge of direct or indirect interests in any Excluded Entity or by and among any Excluded Entity and (y) no Restricted Pledge Party (other than Borrower, Mezzanine Borrower or Principal) shall be restricted from any Sale or Pledge of its direct or indirect assets; provided such assets are not encumbered (or required to be encumbered) by the Loan or the Mezzanine Loan. In connection with a series Sale or Pledge resulting in Guarantor no longer owning direct or indirect interests in Borrower, Principal or the Property, Guarantor shall be released as a guarantor under (I) the Guaranty for any acts occurring after such Sale or Pledge; provided that Borrower delivers a Substitute Guaranty from a Qualified Transferee that Controls Borrower or is under common Control with Borrower, which Substitute Guaranty shall include all liability for all such acts for which Guarantor was so released and (II) the Excess Cash Flow Guaranty, if any, provided that Borrower shall pay to Lender an amount equal to the Guaranteed Excess Cash Flow as of Transferssuch date, of not which amounts shall be deposited by Lender into the Excess Cash Flow Reserve Account.
(ii) A Public Sale, provided, that (A) if after giving effect to any such Public Sale, more than ten forty-nine percent (1049%) in the aggregate of the direct or indirect interests in any Restricted Party are owned by any Person and its Affiliates that owned less than forty-nine percent (49%) of the stock, the limited partnership interests direct or non-managing membership interests (as the case may be) indirect interest in a Restricted Party; provided, however, no such Transfer shall result in the Change of Control in a Restricted Party or cause any Key Principal to no longer be a Key Principal of Borrower, and as a condition to each such Transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. Borrower shall pay any and all reasonable out-of-pocket costs and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies).
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion reasonably acceptable to Lender and, to the extent a rated Securitization has occurred, the Approved Rating Agencies; (B) none of Borrower or Principal shall fail to be a Special Purpose Entity by reason of such transfersale, have an aggregate net worth and liquidity acceptable to Lender;
(vC) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage no Transfer of any insolvency actdirect interest in Borrower or Principal, or any act for so long as the benefit Mezzanine Loan remains outstanding, in the Mezzanine Borrower shall be permitted, (D) no Restricted Pledge Party shall issue preferred equity that has the characteristics of debtors within seven mezzanine debt (7) years prior to the date such as a fixed maturity date, pledged ownership interests as security, regular payments of interest, a fixed rate of return and rights of the proposed Transfer;
equity holder to demand repayment of its investment), (viE) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31transferee that, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfertransfer, and Transferee and Transferee’s Principals shall deliver will hold a twenty percent (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (120%) or more substitute guarantors acceptable to greater direct or indirect interest in, or control, Borrower and/or Principal, (and such transferee owned less than twenty percent (20%) of the direct or indirect interest in Borrower and/or Principal, or did not control Borrower and/or Principal, on the Closing Date), Lender shall have assumed all receive satisfactory “know your customer” compliance screening searches consisting of the liabilities a search and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.evaluation of
Appears in 1 contract
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its stockholders, general partners, members, Key Principals principals and (if Borrower is a trust) beneficial owners owners, as applicable, in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s ownership and control of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other ObligationsObligations contained in the Loan Documents, Lender can recover the Debt by a sale of the Property.
(b) Without the prior written consent of Lender, Lender and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall not, and shall not permit any Restricted Party to do any of the following (collectivelyto, a “Transfer”): (i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) the Property or any part thereof or any legal or beneficial interest therein or any interest of Borrower in the Loan (including any of its rightstherein, duties and obligations under this Agreement and the other Loan Documents) or (ii) permit a Sale or Pledge of an interest in any Restricted PartyParty (clause (i) and (ii) above, collectively, a “Transfer”), other than (A) pursuant to Leases of space in the Improvements to Tenants tenants in accordance with the provisions of Section 5.1.20 and (B) Permitted Transfers, or (iii) enter into any plan of division, or divide, establish a protected series, create a new registered series, or convert to another form of incorporated or unincorporated business or other entity or provide in its operating agreement for any of the foregoing without Lender's prior written consenthereof.
(c) A Transfer shall include include, but not be limited to: (i) an installment sales agreement wherein Borrower agrees to sell the Property Property, or any part thereof thereof, for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial part substantially all of the Property for other than actual occupancy by a space Tenant thereunder tenant thereunder, or a sale, assignment or other transfer of, or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership limited liability company interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to such membership limited liability company interest, or the Sale or Pledge of non-managing membership limited liability company interests or the creation or issuance of new non non-managing membership limited liability company interests; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; or (vii) the removal or the resignation of the managing agent (including an Affiliated Manager) other than in accordance with Section 5.1.22 hereof.
(d) Notwithstanding the provisions of this Section 5.2.10, Lender’s consent the following transfers shall not be required deemed to be a Transfer and shall not require Lender’s consent: (i) the sale or transfer, in connection with one or a series of Transferstransactions, of not more than ten forty-nine percent (1049%) of the stock-54- stock in a Restricted Party; and (ii) the sale or transfer, directly or indirectly, in one or a series of transactions, of not more than forty-nine percent (49%) of the limited partnership interests or non-managing membership limited liability company interests (as the case may be) in a Restricted Party; provided, however, that with respect to each such sale or transfer (A) no such Transfer sales or transfers shall result in the Change change of Control voting control in a the Restricted Party or cause any Key Principal to no longer be a Key Principal of BorrowerParty, and (B) as a condition to each such Transfersale or transfer, Lender shall receive not less than thirty (30) days prior written notice of such proposed Transfer. sale or transfer, (C) no such sale or transfer of any direct ownership interests in Borrower or Mezzanine Borrower shall be permitted, (D) Borrower shall pay or cause to be paid any and all reasonable outcosts imposed or incurred as a result of any such sale or transfer, including any transfer taxes, and (E) if after giving effect to any such sale or transfer, more than forty-ofnine percent (49%) in the aggregate of direct or indirect interests in a Restricted Party are owned by any Person and its Affiliates that owned less than forty-pocket costs nine percent (49%) direct or indirect interest in such Restricted Party as of the Closing Date, Borrower shall deliver to Lender an Additional Insolvency Opinion acceptable to Lender and expenses incurred in connection with such Transfers (including Lender’s counsel fees and disbursements and any fees and expenses of the Rating Agencies). In addition, at all times, except following a transfer of the Property permitted pursuant to Section 5.2.10(f) hereof, the Operating Partnership must continue to (1) Control Borrower, Guarantor, and any Affiliated Manager, and (2) own, directly or indirectly, at least a fifty-one percent (51%) interest in Borrower, Guarantor and any Affiliated Manager. The sale, transfer or issuance of stock in the REIT shall not be deemed a Transfer hereunder, provided, that the stock of the REIT is listed and traded on the New York Stock Exchange or such other nationally recognized stock exchange.
(e) Without limiting Lender’s discretion to approve or disapprove any request for a waiver of the prohibition against Transfers, Lender specifically reserves the right to condition its consent to any waiver of a prohibited Transfer upon satisfaction of the following minimum conditions:
(i) Borrower shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such transfer;
(ii) Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer, including Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes;
(iii) The proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably determined by Lender;
(iv) Transferee and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity acceptable to Lender;
(v) Transferee, Transferee’s Principals and all other entities which may be owned or Controlled directly or indirectly by Transferee’s Principals (“Related Entities”) must not have been party to any bankruptcy proceedings, voluntary or involuntary, made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any act for the benefit of debtors within seven (7) years prior to the date of the proposed Transfer;
(vi) Transferee shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including by entering into an assumption agreement in form and substance satisfactory to Lender;
(vii) There shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or Related Entities which is not acceptable to Lender;
(viii) Transferee, Transferee’s Principals and Related Entities shall not have defaulted under its or their obligations with respect to any other Indebtedness in a manner which is not acceptable to Lender;
(ix) Transferee and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.31, 4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal opinions reasonably required by Lender;
(x) Prior to any release of Guarantor, one (1) or more substitute guarantors acceptable to Lender shall have assumed all of the liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or execute a replacement guaranty and environmental indemnity reasonably satisfactory to Lender.
(xi) Borrower shall deliver, at its sole cost and expense, an endorsement to the Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued on the date hereof and the Permitted Encumbrances;
(xii) If applicable, the Property shall be managed by Qualified Manager pursuant to a Replacement Management Agreement; and
(xiii) The Property meets all of the Lender’s underwriting standards related to its financial condition, cash flow, operating income, physical condition, management and operation.
(f) Notwithstanding any provision in this Section 5.2.10 to the contrary, limited partnership or membership interests, as applicable, in Borrower may be transferred without Lender’s consent and without application of the fee set forth in Section 5.2.10(e)(i): (i) among limited partners or members, as applicable, of Borrower who are limited partners or members, as applicable, of Borrower as of the date of this Agreement (each a “Current Owner”), and (ii) to immediate family members (which shall be limited to a spouse, parent, child and grandchild (each, an “Immediate Family Member”)), of any Current Owner or to trusts formed for the benefit of Immediate Family Members of such Current Owner for bona fide estate planning purposes (each, an “Additional Permitted Transfer”), provided each of the following conditions is satisfied: (A) no Default or Event of Default has occurred and is continuing; (B) Lender has received Borrower’s notice of the Additional Permitted Transfer no less than 30 days prior to the commencement of such transfer; (C) no indemnitor or Guarantor shall be released from any guaranty or indemnity agreement by virtue of the Additional Permitted Transfer; (D) Borrower shall be responsible for the costs and expenses of documenting the Additional Permitted Transfer; (E) Borrower shall reimburse Lender for all actual costs and expenses incurred by Lender in connection with the Additional Permitted Transfer, whether or not consummated; (F) once the Additional Permitted Transfer is complete, the persons with Control of Borrower and management of the Property are the same persons who have such Control and management rights immediately prior to the Additional Permitted Transfer; (G) Borrower shall furnish Lender copies of any documentation executed in connection with the Additional Permitted Transfer promptly after execution thereof; and (H) Borrower shall have delivered satisfactory evidence to Lender that, following the Additional Permitted Transfer, Borrower shall continue to comply with the provisions of Section 4.1.31 hereof. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon Borrower’s a Transfer without Lender’s written consent. This provision shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.
(f) Notwithstanding anything to the contrary contained herein, and without limiting any Transfers or rights under Section 5.2.10(g) hereof, Lender agrees that it shall not unreasonably withhold its consent to a Transfer (or to an unlimited number of Transfers) of the Property by Borrower (or the then owner of the Property), provided that the following terms and conditions are satisfied: (i) Borrower (or the then owner of the Property) shall have given at least thirty (30) days prior written notice to Lender of the proposed Transfer and the proposed Transfer shall not be effective earlier than the date that is twelve (12) months after the first Payment Date; (ii) no Default, Event of Default, Mezzanine Default or Mezzanine Event of Default shall have occurred or be continuing; (iii) the proposed transferee of the Property shall have executed and delivered an express assumption of this Agreement, the Note, the Mortgage and the other Loan Documents, subject to the provisions of Section 9.4 hereof; (iv) payment of all of fees and expenses incurred in connection with such Transfer, including the cost of any third party reports, reasonable legal fees and expenses, Rating Agency fees and expenses or required legal opinions; (v) payment of an assumption fee equal to one half of one percent (0.50%) of the Outstanding Principal Balance with respect to the initial transfer and one percent (1.00%) of the Outstanding Principal Balance with respect to each transfer thereafter; (vi) the delivery of an Additional Insolvency Opinion reflecting the proposed Transfer reasonably satisfactory in form and substance to Lender; (vii) the proposed transferee’s compliance with the representations and covenants set forth in Section 4.1.30 and Section 5.2.9 hereof; (viii) the delivery of evidence satisfactory to Lender that the single purpose nature and bankruptcy remoteness of the proposed transferee, and its shareholders, partners or members, as the case may be, following such Transfer is in accordance with the then current standards of Lender and the Rating Agencies; (ix) prior to any release of Guarantor, a substitute guarantor acceptable to Lender in its discretion shall have assumed the Guaranty and the Environmental Indemnity executed by Guarantor, or executed a replacement guaranty, environmental indemnity, reasonably satisfactory to Lender; (x) Lender shall have received confirmation in writing from the Rating Agencies to the effect that such Transfer will not result in a re-qualification, reduction or withdrawal of the then current ratings assigned to the Securities or any class thereof in any applicable Securitization; (xi) the satisfaction of all of the conditions set forth in Section 5.2.10(f) of the Mezzanine Loan Agreement; and (xii) the satisfaction of such other conditions as Lender shall determine in its reasonable discretion to be in the interest of Lender, including the creditworthiness, reputation and qualifications of the transferee with respect to the Loan and the Property.
(g) A Transfer that occurs by inheritance, devise or bequest or by operation of law upon the death or disability of a natural Person who holds a direct or indirect interest in Borrower, and a Transfer by a natural Person of direct or indirect interests in Borrower for estate planning purposes, shall not require the consent of Lender and no transfer fee shall be payable in connection therewith, provided, however, that, in each case, such Transfer is to a non-minor member of the immediate family of the holder of such interest, or a trust established for the benefit of a member of the immediate family of the holder of such interest, and provided further that, in each such case, each of the following transfer conditions are satisfied:
(i) no Event of Default or Mezzanine Event of Default shall have occurred and remain uncured;
(ii) Borrower shall give Lender notice of such Transfer together with copies of all instruments effecting such transfer not less than ten (10) days prior to the date of such Transfer, or if any such Transfer or series of Transfers shall result in any Person that does not own more than a twenty percent (20%) direct or indirect interest in the Borrower as of the date hereof owning more than a twenty percent (20%) direct or indirect interest in Borrower, Borrower shall give Lender thirty (30) days prior written notice of such Transfer and Lender shall have an opportunity to perform its customary credit and background searches with respect to such transferee, except in the case of the death or disability of an interest holder, in which event Borrower shall give Lender notice of such Transfer within ten (10) Business Days after such Transfer;
(iii) no such Transfer of interest shall result in a change of Control of Borrower (or its managing member/general partner) or the day-to-day operations of the Property, or, if such Transfer would result in a change of Control of Borrower (or its managing member/general partner) or the day-to-day operations of the Property, as a result of the death or disability of an interest holder that is a natural Person, Lender shall have approved in good faith the Person that will Control Borrower and/or the day-to-day operations of the Property;
(iv) the legal and financial structure of Borrower and its shareholders, partners or members, and the single purpose nature and bankruptcy remoteness of Borrower and its shareholders, partners or members, after such Transfer shall satisfy Lender’s then current applicable underwriting criteria and requirements;
(v) if, after taking into account any prior Transfers pursuant to this Section 5.2.10(g), whether to the proposed transferee or otherwise, such Transfer (or series of Transfers) shall result in (A) the proposed transferee, together with all members of his/her immediate family or any Affiliates thereof, owning in the aggregate (directly, indirectly or beneficially) more than forty-nine percent (49%) of the interests in Borrower (or any entity directly or indirectly holding an interest in Borrower), or (B) a Transfer in the aggregate of more than forty-nine percent (49%) of the interests in Borrower as of the date hereof, Borrower shall deliver to Lender, (x) a non-consolidation opinion reasonable satisfactory to Lender, and (y) at the request of Lender, written confirmations from the Rating Agencies that such Transfer or series of Transfers will not result in a qualification, downgrade or withdrawal of the then applicable ratings of the Securities; and
(vi) Borrower shall pay all fees and expenses incurred by Lender in connection with such Transfer, including the cost of any third party reports, legal fees and expenses, Rating Agency fees and expenses and required legal opinions.
(h) Notwithstanding anything to the contrary contained herein, a Qualified Pledgor shall have the right to, and may, pledge, without Lender’s consent, its or their direct or indirect equity interests in the Mezzanine Borrower, to secure (i) a loan facility or loan facilities to one or more Qualified Pledgors from a group of lenders for which a Qualified Institutional Lender acts as agent or collateral agent or will act as initial administrative and collateral agent, and (ii) related hedging arrangements in connection with the loan facility or loan facilities described in clause (i); provided, however, that in either case, such Qualified Pledgor(s) pledges, directly or indirectly, its or their equity interests in substantially all of the property owning subsidiaries in which Operating Partnership holds a direct or indirect interest, and provided further that any enforcement action taken pursuant to such pledge shall constitute a Transfer that is subject to the terms of this Section 5.2.10 and the holder of such pledge shall be required to comply with all of the applicable provisions of this Section 5.2.10.
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