Replacement of Manager Clause Samples
The Replacement of Manager clause outlines the process and conditions under which a current manager can be removed and replaced in a business or investment arrangement. Typically, this clause specifies the grounds for removal, such as misconduct, breach of duty, or failure to perform, and details the procedure for appointing a successor, which may involve a vote by stakeholders or approval by a governing body. Its core function is to ensure continuity and effective management by providing a clear mechanism for addressing managerial issues and facilitating leadership transitions when necessary.
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Replacement of Manager. If at any time after any Action is brought the Manager settles the Action on a basis that results in the settlement of such Action against it and fewer than all the Underwriters (whether or not such settlement complies with Section 9.7 hereof), the Manager will, at such time, for purposes of Sections 9.3, 9.4, 9.5, 9.6, and 9.7 hereof, cease to be the Manager. The non-settling Underwriters will, by vote of holders of a majority of the Underwriting Percentage of such non-settling Underwriters, select a new Manager, which will become the new “Manager” for all purposes of Sections 9.3, 9.4., 9.5, 9.6, and 9.7 hereof as well as this section; provided that the non-settling Underwriter(s) with the largest Underwriting Percentage will act as Manager until such vote occurs and a new Manager is selected.4 3 Seeks to ensure that there is no harm to non-settling Underwriter due to settlement. For example, assume that plaintiffs have suffered $1,000 in damage in a case in which the Underwriters are 50% at fault and other defendants, all of whom are insolvent, are 50% at fault. Further assume that there were two Underwriters, each which underwrote 50% of the offering, and they were equally at fault. If neither Underwriter settles, then each would be required to pay $500 to satisfy the $1,000 verdict for which they are jointly and severally liable (or, if one paid $1,000, Section 9.5 would obligate the other to contribute $500 towards such payment). If the first Underwriter settles for $100, then the second Underwriter will obtain a judgment credit of $500, being equal to the greater of: (a) settlement amount ($100), (b) the first Underwriter’s fault ($250), and (c) the amount which the settling Underwriters would have been required to contribute under the contribution provisions ($500). This formula ensures that the second Underwriter is not harmed by the settlement. By contrast, the judgment credit applied in WorldCom ignored clause (c), resulting in a credit of only $250 and leading the non-settling Underwriter to pay $750, or $250 more than had the first Underwriter not settled. 4 Permits new Manager to replace settling Manager and manage the litigation–related provisions of this Agreement. Notwithstanding such a settlement, the Manager and the other settling Underwriters will remain obligated to the non-settling Underwriters to assist and cooperate fully, in good faith, and at their own expense, in the defense of any Actions, including, without limitation, by provi...
Replacement of Manager. If at any time after any Action is brought the Manager settles the Action on a basis that results in the settlement of such Action against it and fewer than all the Underwriters (whether or not such settlement complies with Section 9.7 hereof), the Manager will, at such time, for purposes of Sections 9.3, 9.4, 9.5, 9.6, and 9.7 hereof, cease to be the Manager. The non-settling Underwriters will, by vote of holders of a majority of the Underwriting Percentage of such non-settling Underwriters, select a new Manager, which will become the new "MANAGER" for all purposes of Sections 9.3, 9.4., 9.5, 9.6, and 9.7 hereof as well as this section; provided that the non-settling Underwriter(s) with the largest Underwriting Percentage will act as Manager until such vote occurs and a new Manager is selected.
Replacement of Manager. Lender shall have the right to require Borrower to replace the Manager with (x) an Unaffiliated Qualified Manager selected by Borrower or (y) another property manager chosen by Borrower and approved by Lender (provided, that such approval may be conditioned upon Borrower delivering a Rating Agency Confirmation from each applicable Rating Agency as to such new property manager and management agreement) upon the occurrence of any one or more of the following events: (i) at any time following the occurrence of an Event of Default, (ii) if Manager shall be in default under the Management Agreement beyond any applicable notice and cure period, (iii) if Manager shall become insolvent or a debtor in any bankruptcy or insolvency proceeding, or (iv) if at any time the Manager has engaged in gross negligence, fraud, willful misconduct or misappropriation of funds.
Replacement of Manager. If at any time after any Action is brought the Manager settles the Action on a basis that results in the settlement of such Action against it and fewer than all the Underwriters (whether or not such settlement complies with Section 9.7 hereof), the Manager will, at such time, for purposes of Sections 9.3, 9.4, 9.5, 9.6, and 9.7 hereof, cease to be the Manager. The non-settling Underwriters will, by vote of holders of a majority of the Underwriting Percentage of such non-settling Underwriters, select a new Manager, which will become the new “Manager” for all purposes of Sections 9.3, 9.4., 9.5, 9.6, and 9.7 hereof as well as this section; provided that the non-settling Underwriter(s) with the largest Underwriting Percentage will act as Manager until such vote occurs and a new Manager is selected. 4 Notwithstanding such a settlement, the Manager and the other settling Underwriters will remain obligated to the non-settling Underwriters to assist and cooperate fully, in good faith, and at their own expense, in the defense of any Actions, including, without limitation, by providing, upon reasonable request of any non-settling Underwriter, and without the necessity of court process, access to or copies of all relevant records, and reasonable access to all witnesses under control of the Manager or the other settling Underwriters, for the purpose of interviews, depositions, and testimony at trial, subject in each case to the applicable legal and procedural obligations of such Manager and such other settling Underwriter. In addition, if at any time, the Manager is unwilling or unable for any reason to assume or discharge its duties as Manager under the applicable AAU, whether resulting from its insolvency (voluntary or involuntary), resignation or otherwise, to the extent permitted by applicable law, the remaining Underwriters will, by vote of holders of a majority of the Underwriting Percentage of such Underwriters, be entitled to select a new Manager, which will become the new Manager for all purposes under this Agreement. 5 Notwithstanding the foregoing, a Manager replaced pursuant to this Section 9.9 shall continue to benefit from and be subject to all other terms and conditions of this Agreement applicable to an Underwriter.
Replacement of Manager. Subject to the prior written consent of the Mortgage Lender and other Mezzanine Lenders, Lender shall have the right to require Borrower to cause Owner to replace any Manager with a Person chosen by Owner and approved by Lender (provided, that such approval may be conditioned upon Borrower delivering a Rating Agency Confirmation as to such new manager and management agreement) upon the occurrence of any one or more of the following events: (i) at any time after the Loan has been accelerated in accordance with Section 8.2.1, the Maturity Date has occurred, or Lender has commenced a foreclosure action, applied for the appointment of a receiver or exercised other similar remedies with respect to an Event of Default, (ii) if such Manager shall be in material default under the Management Agreement that causes a material adverse effect (in Lender’s reasonable determination) on Owner or its business, net cash flow, operations or financial condition or on the Properties then under management pursuant to such Management Agreement or the use, value, operation or net cash flow thereof or Owner’s interest therein, and such default is not cured within thirty (30) days after notice thereof from Lender to Borrower; provided if such default cannot reasonably be cured within such thirty (30) day period Borrower shall have an additional sixty (60) days in which to cure such default so long as it is diligently pursuing a cure, (iii) if such Manager shall become insolvent or a debtor in any bankruptcy or insolvency proceeding (provided that if such proceeding is involuntary, the same shall not have been dismissed within ninety (90) days of filing), or (iv) if at any time such Manager has engaged in gross negligence, fraud, willful misconduct or misappropriation of funds (unless such gross negligence, fraud, willful misconduct or misappropriation of funds is the act of any employee of such Manager other than a senior officer or other individual controlling such Manager and within thirty (30) days of such Manager’s discovery thereof, such employee has been terminated by that Manager and that Manager has fully compensated Borrower for any losses suffered as a result of such gross negligence, fraud, willful misconduct or misappropriation of funds). Subject to the prior written consent of the Mortgage Lender and other Mezzanine Lenders, Lender shall have the right to replace the applicable Manager with any Scheduled Manager if (A) Borrower is not diligently working (or causing Own...
Replacement of Manager. Lender shall have the right to require Borrower to replace any Manager with a Person which is not an Affiliate of, but is chosen by, Borrower and approved by Lender (which approval, in the case of a replacement due to the circumstances described in subsections (ii) and/or (iii) of this Section 7.3, shall not be unreasonably withheld, conditioned or delayed) upon the occurrence of any one or more of the following events: (i) at any time following the acceleration of the Loan by Lender, (ii) if Manager shall be in material default under the Management Agreement beyond any applicable notice and cure period and/or (iii) if at any time the Manager has engaged in gross negligence, fraud or willful misconduct.
Replacement of Manager. Lender shall have the right to require Borrower to replace the Manager with a Person chosen by Borrower and approved by Lender upon the occurrence of any one or more of the following events: (i) at any time following the occurrence of an Event of Default and/or (ii) at any time that the Manager has engaged in (x) gross negligence, (y) fraud or (z) willful misconduct.
Replacement of Manager. The Manager resigns, removed or is replaced under a Management Agreement or a Servicing Agreement and, in each case, a replacement Manager, acceptable to the Administrative Agent has not accepted an appointment under such agreement within sixty (60) days of such resignation or removal.
Replacement of Manager. Lender shall have the right to require Borrowers to cause Operating Lessee to replace the Manager of one or more or all of the Properties with a Person chosen by Borrowers and/or Operating Lessee and approved by Lender upon the occurrence of any one or more of the following events so long as the applicable Borrower or Operating Lessee has the contractual right to do so under the related Management Agreement or the applicable Manager has consented or agreed to the terms of this Section 7.3 in the related Assignment of Management Agreement: (a) at any time following the occurrence of an Event of Default, (b) if at any time the Debt Service Coverage Ratio falls below 1.05 to 1.0 (the “Manager Termination Ratio”) for any three (3) consecutive calendar quarters, calculated on a Pool 1 trailing twelve (12) month basis, as determined by Lender in its sole discretion, (c) if such Manager shall be in default under any material term or covenant set forth in its Management Agreement beyond any applicable notice and cure period, (d) if such Manager shall become insolvent or a debtor in any bankruptcy or insolvency proceeding and, in the case of an involuntary bankruptcy or insolvency proceeding, such bankruptcy or insolvency proceeding is not dismissed within forty-five (45) days after the filing thereof, or (e) if at any time such Manager has engaged in gross negligence, fraud or willful misconduct; provided that if Lender requests that Borrowers cause Operating Lessee to replace the Manager of one or more or all of the Properties as a result of the occurrence of the Manager Termination Ratio under the preceding clause (b), then Borrowers may engage an independent third party consultant, at their sole cost and expense, to review the performance of the Manager or Managers to be replaced and Borrowers shall only be required to so replace said existing Manager or Managers if, within thirty (30) days after Lender’s request, said independent third party consultant also concludes that said existing Manager or Managers should be replaced.
Replacement of Manager. Lender shall have the right to require Borrower to replace the Manager with a Person which is not an Affiliate of, but is chosen by, Borrower and approved by Lender upon the occurrence of any one or more of the following events: (i) at any time following the occurrence of an Event of Default, (ii) if at any time the Debt Service Coverage Ratio falls below 1.10 to 1.0 (the "Manager Termination Ratio") for two (2) consecutive calendar quarters, as determined by Lender in its reasonable discretion on a quarterly basis and/or (iii) if Manager shall be in default under the Management Agreement beyond any applicable notice and cure period or if at any time the Manager has engaged in gross negligence, fraud or willful misconduct. Notwithstanding the provisions of clause (iii) above, Borrower shall nevertheless have the right to retain such Manager if, prior to the replacement of such Manager, Borrower shall provide additional collateral in the form of Letters of Credit for a portion of the Loan, satisfactory to Lender, such that the Manager Termination Ratio can be maintained on the Loan Amount net of such additional collateral. Lender may require Borrower to increase the additional collateral to the extent such Debt Service Coverage Ratio continues to decline in subsequent quarters. Such additional collateral shall be released to Borrower when the Debt Service Coverage Ratio equals or exceeds the Manager Termination Ratio for 6 consecutive months and provided no Event of Default has occurred and is continuing. Letters of Credit provided under this section shall be additional security for the repayment of the Indebtedness and may be drawn upon by Lender upon the occurrence of an Event of Default and applied by Lender in such order and priority as Lender may determine in its sole discretion.