Liquidity Option. (a) Within six months after the eight year anniversary of the Initial Closing Date (the “Liquidity Exercise Period”), and solely to the extent the Company and the Operating Partnership have not consummated a Liquidity Event, the Purchaser shall have the option (the “Liquidity Option”), but not the obligation, to require the Operating Partnership to purchase from the Purchaser, in whole and not in part, any OP Units previously issued to the Purchaser upon exercise of the Warrants and shares of Common Stock previously issued to the Purchaser upon redemption of such OP Units at a price equal to the product of (A) the number of OP Units held by the Purchaser at the time of exercise of the Liquidity Option that were issued upon previous exercise of any Warrants and (without duplication) the number of shares of Common Stock held by the Purchaser at the time of exercise of the Liquidity Option that were issued upon redemption of such OP Units (the “Covered Securities”) and (B) 95% of the most recent estimated net asset value of a share of Common Stock approved by the Board and publicly announced by the Company (the “Liquidity Price”). The Company shall have the right to elect to pay such Liquidity Price in cash or in the form of a two-year note with a 5.0% annual interest rate and other terms and conditions that are customary in the market and mutually agreed by the Company and the Purchaser (“Liquidity Note”); provided, that such Liquidity Note shall, in the case of a default by the Company of the terms and conditions thereof, (I) the interest rate shall be increased to 4% and (II) the Specified Holder (as defined in the Articles Supplementary) shall have substantially similar rights as those set forth in Section 9 of the Articles Supplementary as to having the right to require a Required Asset Sale (as defined in the Articles Supplementary). As used herein, “Liquidity Event” means any of (w) a Change of Control (as defined in the Articles Supplementary) of the Company or the Operating Partnership that results in the Purchaser receiving, or having the right to receive pursuant to the agreement of limited partnership of the Operating Partnership, consideration solely in the form of cash or immediately liquid securities listed on a national securities exchange under Section 6 of the Exchange Act, (x) a liquidation, dissolution and winding up of the Company and the Operating Partnership, (y) a Listing (as defined in the Articles Supplementary) and/or (z) an exercise of the Call Option (as defined in the Warrants).
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Sources: Securities Purchase Agreement (Watermark Lodging Trust, Inc.)
Liquidity Option. (a) Within six months after The redemption of this Debenture by the eight year anniversary Corporation is subject to the provision that the Holder may, within 21 days of receipt of the Initial Closing Date Call Notice (the “Liquidity Exercise Option Period”), and solely opt either (i) subject to Section 6.5, to convert, on the Redemption Date, all, but not less than all, of the outstanding Principal Amount of this Debenture into Common Shares in accordance with the terms of Article 6 (the “Conversion Option”) by giving to the extent Corporation a Conversion Notice in the Company and manner provided in Section 6.2, in which case the Operating Partnership have not consummated provisions of Article 6 shall thereafter apply to such conversion of this Debenture into Common Shares; or (ii) to require that the Corporation make, on the Redemption Date, a Liquidity Event, cash payment to the Purchaser shall have Holder in the option amount equal to the Redemption Price (the “Liquidity Option”) by giving notice to such effect to the Corporation (the “Liquidity Notice”), but not in which case the obligation, Corporation shall be required to require the Operating Partnership to purchase from the Purchaser, in whole and not in part, any OP Units previously issued make a cash payment to the Purchaser upon exercise of Holder in the Warrants and shares of Common Stock previously issued to the Purchaser upon redemption of such OP Units at a price amount equal to the product Redemption Price, on the Redemption Date. If the Holder does not provide the Corporation with notice of (A) the number of OP Units held its selection by the Purchaser at the time of exercise expiry of the Liquidity Option Period, it shall be deemed to have selected the Conversion Option. Notwithstanding that were issued upon previous (i) provides that the Conversion Option can only be made in respect of all, but not less than all, of the outstanding Principal Amount of this Debenture, if the Holder is prohibited by Section 6.5(2) from converting a portion of this Debenture into Common Shares, it may exercise the Conversion Option in respect of any Warrants such portion of this Debenture which it is not prohibited from converting and (without duplication) the number remaining portion of shares this Debenture that is therefore not converted shall remain outstanding Debt of Common Stock held the Corporation in accordance with the terms of this Debenture and shall not be redeemable by the Purchaser at the time of exercise of the Liquidity Option that were issued upon redemption of such OP Units (the “Covered Securities”) and (B) 95% of the most recent estimated net asset value of a share of Common Stock approved by the Board and publicly announced by the Company (the “Liquidity Price”). The Company shall have the right to elect to pay such Liquidity Price in cash or in the form of a two-year note with a 5.0% annual interest rate and other terms and conditions that are customary in the market and mutually agreed by the Company and the Purchaser (“Liquidity Note”); provided, that such Liquidity Note shall, in the case of a default by the Company of the terms and conditions thereof, (I) the interest rate shall be increased to 4% and (II) the Specified Holder (as defined in the Articles Supplementary) shall have substantially similar rights as those set forth in Section 9 of the Articles Supplementary as to having the right to require a Required Asset Sale (as defined in the Articles Supplementary). As used herein, “Liquidity Event” means any of (w) a Change of Control (as defined in the Articles Supplementary) of the Company or the Operating Partnership that results in the Purchaser receiving, or having the right to receive Corporation pursuant to the agreement of limited partnership of the Operating Partnership, consideration solely in the form of cash or immediately liquid securities listed on a national securities exchange under Section 6 of the Exchange Act, (x) a liquidation, dissolution and winding up of the Company and the Operating Partnership, (y) a Listing (as defined in the Articles Supplementary) and/or (z) an exercise of the Call Option (as defined in the Warrants)this Article 7.
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