Interest Rate Cap Agreement. If the LIBO Rate in effect on any date is greater than or equal to 3.0%, the Borrower shall within thirty (30) days thereafter (i) enter into and maintain in full force and effect one or more Interest Rate Caps, each with an Eligible Interest Rate Cap Provider and each of which satisfies the definition of Eligible Interest Rate Cap Agreement and the aggregate notional amount of which, when taken together, is at least equal to the aggregate Commitments, and shall comply with the terms thereof, and (ii) assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenders, all of the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment shall terminate upon the repayment of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Provider, including the related Eligible Interest Rate Cap Provider’s acknowledgment of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Agreement.
Appears in 2 contracts
Samples: Credit Agreement (FlexShopper, Inc.), Credit Agreement (FlexShopper, Inc.)
Interest Rate Cap Agreement. If the LIBO Rate in effect on any date is greater than or equal (A) As a condition to 3.0%Closing, the Borrower Borrowers shall within thirty purchase and pledge and deliver to Lender an interest rate cap agreement satisfying the criteria set forth below (30) days thereafter (i) enter into the "CAP"), and the Borrowers shall maintain such Cap in the possession of Lender, in full force and effect one or more Interest Rate Capseffect, each with an Eligible Interest Rate until all Obligations are fully and finally repaid. The Cap Provider and each of which satisfies the definition of Eligible Interest Rate Cap Agreement and the aggregate (i) shall have a notional amount of which, when taken together, is at least equal to the aggregate Commitmentsoutstanding principal balance of the Loan calculated based upon the declining principal balance of the Loan scheduled to be outstanding over the term of such Cap taking into account scheduled principal amortization hereunder, (ii) shall provide that to the extent that the LIBO Rate exceeds five percent (5%) per annum (the "CAP THRESHOLD RATE"), then the Cap Provider shall pay to Lender, on behalf of the Borrowers, not less than the amount of interest that would accrue on the Loan at a per annum rate equal to the difference between the LIBO Rate and the Cap Threshold Rate, (iii) shall comply with be in form and substance reasonably satisfactory to Lender, (iv) shall have a term equal to the terms thereofInitial Term of the Loan (or the applicable Extension Term), and (iiv) assign to shall be issued by a financial institution (the Administrative Agent, for the equal "CAP PROVIDER") having a financial rating by S&P of at least "AA-" (and ratable benefit at least an equivalent rating from each of the Administrative Agent and Lendersother Rating Agencies).
(B) If at any time the financial rating assigned to any Cap Provider by S&P shall fall below AA- (or the equivalent rating for any other Rating Agency), the Borrowers shall be required to deliver a replacement Cap in substantially the form of the Cap delivered at Closing issued by a Cap Provider meeting the rating requirements for a Cap Provider under Section 2.3(A)(v), providing for a cap "strike price" not greater than the Cap Threshold Rate (a replacement Cap meeting all of the Borrower’s right and title to and interest in each Interest Rate Capforegoing conditions, an "ACCEPTABLE REPLACEMENT CAP") within twenty (20) Business Days after receipt of notice from Lender or Servicer of such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit downgrade of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment shall terminate upon the repayment of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Provider, including together with an assignment of such Cap substantially in the related Eligible Interest form of the Assignment of Rate Cap Provider’s acknowledgment and such Financing Statements and opinions of in-house or
1. Upon delivery of an Acceptable Replacement Cap reasonably acceptable to Lender, the remaining balance of the collateral assignment Cap Reserve shall be promptly returned to the Borrowers.
(C) All payments made by the Borrower to Cap Provider under the Administrative Agent of such Eligible Interest Rate Cap shall be deposited directly by the Cap Provider into the Lock Box Account and applied in accordance with the Cash Management Agreement.
Appears in 2 contracts
Samples: Loan and Security Agreement (Lodgian Inc), Loan and Security Agreement (Lodgian Inc)
Interest Rate Cap Agreement. If the LIBO Rate in effect on any date is greater than or equal (A) As a condition to 3.0%Closing, the Borrower Borrowers shall within thirty purchase and pledge and deliver to Lender an interest rate cap agreement satisfying the criteria set forth below (30) days thereafter (i) enter into the "CAP"), and the Borrowers shall maintain such Cap in the possession of Lender, in full force and effect one or more Interest Rate Caps, each with an Eligible Interest Rate until all Obligations are fully and finally repaid. The Cap Provider and each of which satisfies the definition of Eligible Interest Rate Cap Agreement and the aggregate (i) shall have a notional amount of which, when taken together, is at least equal to the aggregate Commitmentsoutstanding principal balance of the Loan calculated based upon the declining principal balance of the Loan scheduled to be outstanding over the term of such Cap taking into account scheduled principal amortization hereunder, (ii) shall provide that to the extent that the LIBO Rate exceeds six and one half percent (6.5%) per annum (the "CAP THRESHOLD RATE"), then the Cap Provider shall comply with pay to Lender, on behalf of the terms thereofBorrowers, not less than the amount of interest that would accrue on the Loan at a per annum rate equal to the difference between the LIBO Rate and the Cap Threshold Rate, (iii) shall be in form and substance reasonably satisfactory to Lender, (iv) shall have a term equal to the Initial Term of the Loan (or the applicable Extension Term), and (iiv) assign to shall be issued by a financial institution (the Administrative Agent, for the equal "CAP PROVIDER") having a financial rating by S&P of at least "AA" (and ratable benefit at least an equivalent rating from each of the Administrative Agent and Lendersother Rating Agencies).
(B) If at any time the financial rating assigned to any Cap Provider by S&P shall fall below AA- (or the equivalent rating for any other Rating Agency), all the Borrowers shall be required to deliver a replacement Cap in substantially the form of the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment shall terminate upon the repayment of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate delivered at Closing issued by a Cap Provider ceases to be an Eligible Interest Rate meeting the rating requirements for a Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Provider, including the related Eligible Interest Rate Cap Provider’s acknowledgment of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Agreement.Section
Appears in 2 contracts
Samples: Mezzanine Loan Agreement (Lodgian Inc), Mezzanine Loan Agreement (Lodgian Inc)
Interest Rate Cap Agreement. If the LIBO Rate in effect on any date is greater than or equal (A) As a condition to 3.0%Closing, the Borrower Borrowers shall within thirty purchase and pledge and deliver to Lender an interest rate cap agreement satisfying the criteria set forth below (30) days thereafter (i) enter into the "CAP"), and the Borrowers shall maintain such Cap in the possession of Lender, in full force and effect one or more Interest Rate Capseffect, each with an Eligible Interest Rate until all Obligations are fully and finally repaid. The Cap Provider and each of which satisfies the definition of Eligible Interest Rate Cap Agreement and the aggregate (i) shall have a notional amount of which, when taken together, is at least equal to the aggregate Commitmentsoutstanding principal balance of the Loan calculated based upon the declining principal balance of the Loan scheduled to be outstanding over the term of such Cap taking into account scheduled principal amortization hereunder, (ii) shall provided that to the extent that the LIBO Rate exceeds six and one half percent (6.5%) per annum (the "CAP THRESHOLD RATE"), then the Cap Provider shall comply with pay to Lender, on behalf of the terms thereofBorrowers, not less than the amount of interest that would accrue on the Loan at a per annum rate equal to the difference between the LIBO Rate and the Cap Threshold Rate, (iii) shall be in form and substance reasonably satisfactory to Lender, (iv) shall have a term equal to the Initial Term of the Loan (or the applicable Extension Term), and (iiv) assign to shall be issued by a financial institution (the Administrative Agent, for the equal "CAP PROVIDER") having a financial rating by S&P of at least "AA" (and ratable benefit at least an equivalent rating from each of the Administrative Agent and Lendersother Rating Agencies).
(B) If at any time the financial rating assigned to any Cap Provider by S&P shall fall below AA- (or the equivalent rating for any other Rating Agency), all the Borrowers shall be required to deliver a replacement Cap in substantially the form of the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment shall terminate upon the repayment of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate delivered at Closing issued by a Cap Provider ceases to be an Eligible Interest Rate meeting the rating requirements for a Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Provider, including the related Eligible Interest Rate Cap Provider’s acknowledgment of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Agreement.Section
Appears in 2 contracts
Samples: Loan and Security Agreement (Lodgian Inc), Loan and Security Agreement (Lodgian Inc)
Interest Rate Cap Agreement. (a) If at any time during the LIBO Rate in effect on any date is greater than or equal to 3.0%term of the Loan, the net operating income of the Property, as determined by Lender in its sole discretion, is less than 1.60 times the monthly amount of interest payments due under the Loan, Borrower shall within thirty (30) days thereafter enter into an Interest Rate Cap Agreement which shall protect against an increase in interest rates which would cause the Annual Interest Rate to exceed a rate to be determined by Lender in its sole discretion. The Interest Rate Cap Agreement (i) enter into shall be in form acceptable to Lender, (ii) shall be with a counterparty acceptable to Lender and maintain in full force which counterparty shall have a credit rating of “A” or better by Xxxxx’x Investors Service, Inc., and effect one “A” or more Interest Rate Capsbetter by Standard and Poor’s Rating Group, each with an Eligible (iii) shall direct such acceptable counterparty to deposit any and all payments due under the Interest Rate Cap Provider Agreement directly into an account designated by Lender (“Designated Account”) so long as any portion of the Loan remains outstanding, provided however, for purposes of this requirement, the Loan shall be deemed to be remaining outstanding if the Property is transferred to Lender (or its nominee or designee) by judicial foreclosure or non-judicial foreclosure or by deed-in-lieu thereof, (iv) shall have an initial term of one year, and each thereafter (A) if the net operating income of the Property, as determined by Lender in its sole discretion at any time and from time to time, is or continues to be less than 1.60 times the monthly amount of interest payments due under the Loan (the “NOI Threshold”), then the Interest Rate Cap Agreement then in effect shall be extended for successive one year terms for as long as the net operating income of the Property does not meet the NOI Threshold, and (B) if the net operating income of the Property as determined by Lender in its sole discretion at any time meets or exceeds the NOI Threshold such that an Interest Rate Cap Agreement is not then required, but at any subsequent time (and from time to time), the net operating income of the Property, as determined by Lender in its sole discretion, fails to meet the NOI Threshold, Borrower shall enter into a new Interest Rate Cap Agreement that satisfies all of the terms and conditions of this Section 2.9, including without limitation, that it have an initial term of one year and successive one year terms, if and as required under the terms of this Section 2.9(iv), and (v) shall have an initial notional amount equal to the unpaid principal balance of the Loan.
(b) Borrower shall collaterally assign to Lender all of its right, title and interest to receive any and all payments under the Interest Rate Cap Agreement, and shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement. Borrower shall comply with all of its obligations under the Interest Rate Cap Agreement. All amounts paid by the counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be deposited immediately into the Designated Account. Borrower shall take all actions reasonably required by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(c) In the event of a downgrade, withdrawal or qualification of the rating of the counterparty by Xxxxx’x Investors Service, Inc., or by Standard & Poor’s Ratings Group below the ratings described in Section 2.9(b), at Lender’s option, Borrower shall replace the Interest Rate Cap Agreement with a replacement Interest Rate Cap Agreement with a counterparty acceptable to Lender not later than ten (10) business days following receipt of notice from Lender of such downgrade, withdrawal or qualification.
(d) In the event that Borrower fails to purchase, deliver and/or maintain the Interest Rate Cap Agreement or any replacement thereof as required hereby or under the terms of the Note, Lender may (in addition to exercising any of its other rights and remedies under the Loan Documents) purchase such Interest Rate Cap Agreement or any replacement thereof and the costs incurred by Lender in purchasing and maintaining the same shall be paid by Borrower with interest thereon at the Default Rate from the date such cost was incurred by Lender until such cost is paid by Borrower to Lender.
(e) If and when an Interest Rate Cap Agreement is required pursuant to Section 2.9(a), Borrower shall obtain and deliver to Lender, an opinion of counsel for the counterparty (upon which satisfies Lender and its successors and assigns may rely) in form, scope and substance acceptable to Lender regarding the definition authorization of Eligible the counterparty, the legality, validity, and binding effect of the Interest Rate Cap Agreement, and such other matters as Lender shall reasonably require.
(f) The obligation to purchase and maintain the Interest Rate Cap Agreement and the aggregate notional amount of which, when taken together, is at least equal any replacement thereof shall be fully recourse to the aggregate Commitments, and shall comply with the terms thereof, and (ii) assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenders, all of the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent Borrower and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment shall terminate upon the repayment of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Provider, including the related Eligible Interest Rate Cap Provider’s acknowledgment of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap AgreementLiable Party.
Appears in 1 contract
Samples: Mortgage, Security Agreement and Fixture Filing (Strategic Hotels & Resorts, Inc)
Interest Rate Cap Agreement. If 2.%2.%3.%4. Prior to or contemporaneously with the LIBO Closing Date, Borrower shall enter into a Senior Mezzanine Interest Rate in effect on any date is greater than or Cap Agreement with a LIBOR strike price equal to 3.0%, the Borrower shall within thirty (30) days thereafter Strike Price. The Senior Mezzanine Interest Rate Cap Agreement (i) enter into shall at all times be in a form and maintain in full force and effect one or more Interest Rate Capssubstance reasonably acceptable to Lender, each (ii) shall at all times be with an Eligible Acceptable Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the Cash Management Account any amounts due Borrower under such Senior Mezzanine Interest Rate Cap Provider Agreement so long as any portion of the Debt exists, provided that the Debt shall be deemed to exist if the Collateral is transferred by judicial or non‑judicial foreclosure or deed-in-lieu thereof, (iv) shall be for a period equal to the term of the Loan and each (v) shall at all times have a notional amount equal to or greater than the principal balance of the Loan and shall at all times provide for the applicable Strike Price. Borrower shall collaterally assign to Lender, pursuant to the Collateral Assignment of Interest Rate Cap Agreement (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Assignment of Interest Rate Cap Agreement”), all of its right, title and interest to receive any and all payments under the Senior Mezzanine Interest Rate Cap Agreement, and shall deliver to Lender an executed counterpart of such Senior Mezzanine Interest Rate Cap Agreement (which satisfies shall, by its terms, authorize the definition assignment to Lender and require that payments be deposited directly into the Cash Management Account) and shall notify the Acceptable Counterparty of Eligible such assignment.
(a) Borrower shall comply with all of its obligations under the terms and provisions of the Senior Mezzanine Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the Senior Mezzanine Interest Rate Cap Agreement to Borrower or Lender shall be deposited promptly (but, in the case of Borrower, in no event later than one (1) Business Day after receipt) into the Cash Management Account. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Senior Mezzanine Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(b) In the event of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by any Approved Rating Agency, Borrower shall replace the Senior Mezzanine Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than ten (10) Business Days following receipt of notice from Lender of such downgrade, withdrawal or qualification.
(c) In the event that Borrower fails to purchase and deliver to Lender the Senior Mezzanine Interest Rate Cap Agreement or fails to maintain the Senior Mezzanine Interest Rate Cap Agreement in accordance with the terms and provisions of this Agreement, Lender may purchase the Senior Mezzanine Interest Rate Cap Agreement and the aggregate notional amount of which, when taken together, is at least equal to the aggregate Commitments, and shall comply with the terms thereof, and (ii) assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenders, all of the Borrower’s right and title to and interest cost incurred by Lender in each Interest Rate Cap, purchasing such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Senior Mezzanine Interest Rate Cap for Agreement shall be paid by Borrower to Lender with interest thereon at the benefit of Default Rate from the Administrative Agent and date such cost was incurred by Lender until such cost is reimbursed by Borrower to Lender.
(d) In connection with the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Senior Mezzanine Interest Rate Cap Agreement, which collateral assignment shall terminate upon the repayment of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty obtain and deliver to Lender (30a) days (x) cause such Person to assign its obligations under a resolution/consent, as applicable, of the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Acceptable Counterparty authorizing the delivery of the Senior Mezzanine Interest Rate Cap Agreement with acceptable to Lender, and (b) an Eligible Interest Rate Cap Provideropinion from counsel (which counsel may be in‑house counsel for the Acceptable Counterparty) for the Acceptable Counterparty (upon which Lender and its successors and assigns may rely) which shall provide, including in relevant part, that:
(i) the related Eligible Interest Rate Cap Provider’s acknowledgment Acceptable Counterparty is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation or formation and has the collateral assignment by organizational power and authority to execute and deliver, and to perform its obligations under, the Borrower to the Administrative Agent of such Eligible Senior Mezzanine Interest Rate Cap Agreement;
(ii) the execution and delivery of the Senior Mezzanine Interest Rate Cap Agreement by the Acceptable Counterparty, and any other agreement which the Acceptable Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by‑laws (or equivalent organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property;
(iii) all consents, authorizations and approvals required for the execution and delivery by the Acceptable Counterparty of the Senior Mezzanine Interest Rate Cap Agreement, and any other agreement which the Acceptable Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and
(iv) the Senior Mezzanine Interest Rate Cap Agreement, and any other agreement which the Acceptable Counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the Acceptable Counterparty and constitutes the legal, valid and binding obligation of the Acceptable Counterparty, enforceable against the Acceptable Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
Appears in 1 contract
Samples: Senior Mezzanine Loan Agreement (Ashford Hospitality Prime, Inc.)
Interest Rate Cap Agreement. If (a) On or prior to the LIBO Rate in effect on any date is greater than or equal to 3.0%Closing Date, the Borrower shall within thirty enter into an agreement with (30or guaranteed by) days thereafter an Acceptable Counterparty, which agreement (an “Interest Rate Cap Agreement”) shall (i) enter into be in form and maintain substance reasonably satisfactory to Lender, (ii) contain the agreement of such Acceptable Counterparty to make payments to Borrower in full force the event the Applicable Rate Index exceeds a strike rate of no greater than three percent (3.00%), (iii) require payments based on a notional amount at least equal to the Loan Amount, (iv) not terminate prior to the date that is twenty-four (24) months following the Closing Date, and effect one or more Interest Rate Caps(v) require payments to be made on the date that is three (3) Business Days prior to the applicable Payment Date. Borrower shall collaterally assign to Lender, each with pursuant to an Eligible assignment agreement in form and substance acceptable to Lender (the “Assignment of Interest Rate Cap Provider Agreement”), all of its right, title and interest (but not its obligations) to receive any and all payments under any Interest Rate Cap Agreement, and shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the collateral assignment to Lender and require that payments be deposited directly into the account designated by Lender) and shall notify the Acceptable Counterparty of such assignment and obtain from such counterparty a confirmation of the assignment of such Interest Rate Cap Agreement to Lender in form and content acceptable to Lender.
(b) Not later than the date that is sixty (60) days prior to the date on which the initial Interest Rate Cap Agreement described in Section 2.2.7
(a) terminates, Borrower shall enter into an agreement with (or guaranteed by) an Acceptable Counterparty, which agreement (a “Replacement Interest Rate Cap Agreement”) shall (i) be in form and substance reasonably satisfactory to Lender, (ii) contain the agreement of such Acceptable Counterparty to make payments to Borrower in the event the Applicable Rate Index exceeds a strike rate of no greater than three percent (3.00%), (iii) require payments based on a notional amount at least equal to the Loan Amount, (iv) be effective commencing immediately
(c) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by an Acceptable Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(d) In the event of any downgrade, withdrawal or qualification of the rating of the counterparty under the Interest Rate Cap Agreement such that such counterparty is a Downgraded Counterparty, or in the event of any default by an Acceptable Counterparty under the Interest Rate Cap Agreement, Borrower shall, not later than fifteen (15) days following the receipt by Borrower of notice of such downgrade, withdrawal, qualification, or default (whether received from Lender, the Acceptable Counterparty, or otherwise), then Borrower shall replace the Interest Rate Cap Agreement with an Interest Rate Cap Agreement satisfying the requirements of Section 2.2.7(a) above not later than fifteen (15) days following the receipt by Borrower of notice of such downgrade (whether received from Lender, the Acceptable Counterparty, or otherwise).
(e) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or fails to maintain the Interest Rate Cap Agreement, in each case, in accordance with the terms and provisions of which satisfies this Agreement, Lender may (but shall have no obligation to) purchase the definition of Eligible Interest Rate Cap Agreement and the aggregate notional amount cost incurred by Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred by Lender until such cost is reimbursed by Borrower to Lender.
(f) In connection with the Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender, within twenty (20) Business Days following the Closing Date (or, with respect to a Replacement Interest Rate Cap Agreement or Substitute Interest Rate Cap Agreement, within twenty (20) Business Days following the effective date of whichsuch Replacement Interest Rate Cap Agreement or Substitute Interest Rate Cap Agreement, when taken togetheras applicable), an opinion from counsel (which counsel may be in-house counsel for the Acceptable Counterparty) for the Acceptable Counterparty (upon which Lender and its successors and assigns may rely) which shall provide, in relevant part, that: (i) the Acceptable Counterparty is at least equal to the aggregate Commitmentsduly organized, validly existing, and shall comply with in good standing under the terms thereoflaws of its jurisdiction of incorporation and has the organizational power and authority to execute and deliver, and to perform its obligations under, the Interest Rate Cap Agreement; (ii) assign the execution and delivery of the Interest Rate Cap Agreement by the Acceptable Counterparty, and any other agreement which the Acceptable Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property; (iii) all consents, authorizations and approvals required for the execution and delivery by the Acceptable Counterparty of the Interest Rate Cap Agreement, and any other agreement which the Acceptable Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have
(g) Notwithstanding anything to the Administrative Agentcontrary contained in this Section 2.2.7 or elsewhere in this Agreement, for in the equal and ratable benefit of the Administrative Agent and Lendersevent a Rate Conversion occurs, all of the Borrower’s right and title to and interest in each then, within ten (10) Business Days after such Rate Conversion, Borrower shall enter into a Substitute Interest Rate CapCap Agreement (and in connection therewith, such that but not prior to Borrower taking all the Administrative Agent actions described in this Section 2.2.7(g), Borrower shall have the right to enforce the Borrower’s rights and remedies under each terminate any then-existing Interest Rate Cap for Agreement), together with, within five (5) Business Days thereafter, an assignment of interest rate cap agreement with respect to such Substitute Interest Rate Cap Agreement in form and substance substantially similar to the benefit Assignment of Interest Rate Cap Agreement delivered in connection with the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an then-existing Interest Rate Cap Agreement, together with legal opinions of counsel to the counterparty and Borrower as reasonably required by Lender. Notwithstanding anything to the contrary set forth in this Section 2.2.7, if, following a Rate Conversion, Lender determines (which collateral assignment shall terminate upon the repayment determination will be based on market customs and/or proposals of all amounts owing under this Agreement; provided, however industry associations) that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Substitute Interest Rate Cap Agreement with is not then generally commercially available from an Eligible Acceptable Counterparty, then, Borrower shall not be required to obtain a Substitute Interest Rate Cap ProviderAgreement but shall instead be required to purchase such other hedging product as reasonably determined by Lender would afford Lender substantially equivalent protection from increases in the interest rate, including the related Eligible Interest Rate Cap Provider’s acknowledgment of the collateral assignment by the Borrower which such alternative shall be satisfactory to the Administrative Agent of such Eligible Interest Rate Cap Agreement.Lender in its reasonable discretion. SECTION
Appears in 1 contract
Samples: Loan Agreement (Instil Bio, Inc.)
Interest Rate Cap Agreement. If (a) Only in the LIBO Rate event that the Mortgage Loan has been paid in effect on any date full or Mortgage Borrower is greater than or equal to 3.0%, in violation of its obligations of Section 2.4 of the Mortgage Loan Agreement shall the terms of this Section 2.4 be applicable. Borrower shall within thirty (30) days obtain, or cause to be obtained, and shall thereafter maintain in effect, an Interest Rate Cap Agreement with an Acceptable Counterparty, which shall (i) enter into be coterminous with the Loan and maintain in full force the Mortgage Loan, (ii) have a notional amount which shall not at any time be less than the sum of (A) the outstanding principal balance of the Loan, (B) the outstanding principal balance of the Mortgage Loan, (C) the outstanding principal balance of the Mezzanine A Loan, (D) the outstanding principal balance of the Mezzanine B Loan, (E) the outstanding principal balance of the Mezzanine D Loan, (F) the outstanding principal balance of the Mezzanine E Loan, and effect one or more Interest Rate Caps(G) the Unadvanced Mezzanine E Loan Funds, each with an Eligible and (iii) at all times have a strike rate equal to the Strike Rate. The Counterparty shall be obligated under the Interest Rate Cap Provider Agreement to make monthly payments equal to the excess of one (1) month LIBOR over the Strike Rate, calculated on the notional amount. The notional amount of the Interest Rate Cap Agreement may be reduced from time to time in amounts equal to any prepayment of the principal of the Loan, the Mortgage Loan, the Mezzanine A Loan, the Mezzanine B Loan, the Mezzanine D Loan or the Mezzanine E Loan in accordance with Section 2.3 and each Section 2.5 of which satisfies this Agreement, the definition Mortgage Loan Agreement, the Mezzanine A Loan Agreement, the Mezzanine B Loan Agreement, the Mezzanine D Loan Agreement or the Mezzanine E Loan Agreement, as applicable.
(b) Borrower shall collaterally assign to Lender pursuant to an Assignment of Eligible Interest Rate Cap Agreement substantially in the form annexed hereto as Exhibit V, all of its right, title and interest under the Interest Rate Cap Agreement (and any related guarantee, if any) (i) to any and all payments, and (ii) to any and all collateral posted by the Counterparty pursuant to the Interest Rate Cap Agreement. Borrower shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement and notify the Counterparty of such collateral assignment (either in such Interest Rate Cap Agreement or by separate instrument). The Counterparty shall agree in writing to make all payments it is required to make under the Interest Rate Cap Agreement directly to an account specified by Lender. At such time as the Loan is repaid in full, all of Lender’s right, title and interest in the Interest Rate Cap Agreement shall terminate and Lender shall promptly execute and deliver at Borrower’s sole cost and expense, such documents as may be required to evidence Lender’s release of Lender’s security interest in the Interest Rate Cap Agreement and to notify the Counterparty of such release.
(c) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Counterparty (or its credit support provider, if applicable) under the Interest Rate Cap Agreement shall be deposited immediately into an account specified by Lender. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(d) In the event of any downgrade, withdrawal or qualification of the rating of the Counterparty below the First Trigger Ratings with respect to any of the Rating Agencies, the Counterparty shall post collateral pursuant to the Interest Rate Cap Agreement within ten (10) Business Days following such downgrade, withdrawal or qualification.
(e) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or any Replacement Interest Cap Agreement as and when required hereunder, Lender may purchase such Interest Rate Cap Agreement and the aggregate notional amount cost incurred by Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred by Lender until such cost is paid by Borrower to Lender.
(f) Each Interest Rate Cap Agreement shall expressly provide that in the event of whichany downgrade, when taken togetherwithdrawal or qualification of the rating of the Counterparty (or its credit support provider, is if applicable) below the Second Trigger Ratings with respect to any of the Rating Agencies, the Counterparty shall, while posting collateral pursuant to the Interest Rate Cap Agreement, either (i) transfer the Interest Rate Cap Agreement to a replacement Acceptable Counterparty, or (ii) procure a guarantee from an entity whose credit ratings from the Rating Agencies are at least equal to the aggregate CommitmentsFirst Trigger Ratings, and shall comply with the terms thereofwithin thirty (30) calendar days following such downgrade, and (ii) assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenderswithdrawal or qualification, all of as set forth in the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under Agreement.
(g) In connection with an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender an opinion of counsel from counsel for the Counterparty (upon which collateral assignment Lender and its successors and assigns may rely) which shall terminate upon provide, in relevant part, that:
(1) the repayment Counterparty is duly organized, validly existing, and in good standing under the laws of all amounts owing under this Agreement; providedits jurisdiction of incorporation and has the organizational power and authority to execute and deliver, however that if (i) any and to perform its obligations under, the Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or Agreement;
(ii2) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, execution and delivery of the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Providerby the Counterparty, including and any other agreement which the related Eligible Interest Rate Cap Provider’s acknowledgment Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent Organizational Documents) or any law, regulation or contractual restriction binding on or affecting it or its property;
(3) all consents, authorizations and approvals required for the execution and delivery by the Counterparty of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and
(4) the Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the Counterparty and constitutes the legal, valid and binding obligation of the Counterparty, enforceable against the Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
Appears in 1 contract
Samples: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Interest Rate Cap Agreement. If Prior to or contemporaneously with the LIBO Rate Closing Date, Borrower shall have obtained, and thereafter maintain in effect on any date is greater than or equal to 3.0%effect, the Borrower shall within thirty (30) days thereafter (i) enter into and maintain in full force and effect one or more Interest Rate Caps, each with an Eligible Interest Rate Cap Provider and each of which satisfies the definition of Eligible Interest Rate Cap Agreement and (the aggregate “Initial Interest Rate Cap Agreement”), which:
(a) has a term expiring no earlier than the last day of the Interest Period in which the Maturity Date occurs (as extended from time to time pursuant to this Agreement);
(b) has a notional amount of which, when taken together, is at least equal to the aggregate Commitmentsinitial principal amount of the Senior Loan; provided, and however, that at all times the notional amount shall comply with equal the terms thereof, and Aggregate Outstanding Principal Balance;
(iic) assign has a strike rate equal to the Administrative Strike Price;
(d) is governed by the laws of the State of New York;
(e) is issued by the Counterparty to Borrower and pledged to Agent, for the equal and ratable benefit of Lender, by Borrower in accordance with the Administrative Agent and Lenders, all Assignment of the Borrower’s right and title to and interest in each Interest Rate Cap;
(f) has a Counterparty that is obligated to make a stream of payments, directly to the Clearing Account (whether or not an Event of Default has occurred) from time to time equal to the product of (i) the notional amount of such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for Agreement multiplied by (ii) the benefit excess, if any, of LIBOR (including any upward rounding under the Administrative Agent definition of LIBOR) over the Strike Price and shall provide that such payment shall be made on a monthly basis in each case not later than (after giving effect to and assuming the Lenders, but without passage of any obligation on cure period afforded to the part of Counterparty under the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment cure period shall terminate upon not in any event be more than three (3) Business Days) each Payment Date; and
(g) does not impose any material obligation on the repayment beneficiary thereof (after payment of the acquisition cost) and is, in all amounts owing under this Agreement; providedmaterial respects, however that satisfactory in form and substance to Agent (in its reasonable discretion) and satisfies applicable Rating Agency standards and requirements (if a Securitization has occurred), including, without limitation, provisions satisfying Rating Agencies standards, requirements and criteria (i) that incorporate representations by the Counterparty that no withholding taxes shall apply to payments by the Counterparty, and provide for “gross up” payments by the Counterparty for any Interest Rate Cap Provider ceases withholding tax (subject to be an Eligible Interest Rate Cap Provider or customary exceptions), (ii) whereby the Counterparty agrees not to file or join in the filing of any Interest Rate Cap Provider fails to make a payment when due petition against Borrower under the applicable Interest Rate CapBankruptcy Code or any other federal or state bankruptcy or insolvency law, and (iii) that incorporate, if the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement contemplates collateral posting by the Counterparty, a credit support annex setting forth the mechanics for collateral to be calculated and posted that are consistent with an Eligible Rating Agencies standards, requirements and criteria. In addition, Borrower shall cause the Counterparty under the Interest Rate Cap ProviderAgreement to execute and deliver the Acknowledgment. USActive 36631986.12 -69- If Borrower extends the Maturity Date pursuant to Section 2.9, including prior to the related Eligible Interest Rate Cap Provider’s acknowledgment expiration of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Initial Interest Rate Cap Agreement, Borrower shall deliver an extension of the Initial Interest Rate Cap Agreement or a replacement of the same meeting the requirements of this Section 2.8.1 except that the term shall expire no earlier than the Maturity Date.
Appears in 1 contract
Samples: Building Loan Agreement (KBS Strategic Opportunity REIT, Inc.)
Interest Rate Cap Agreement. If (a) Prior to or contemporaneously with the LIBO Rate in effect on any date is greater than or equal to 3.0%Closing Date, the Borrower shall within thirty (30) days thereafter (i) enter into and maintain in full force and effect one or more Interest Rate Caps, each with an Eligible Interest Rate Cap Provider and each of which satisfies the definition of Eligible Party shall enter into an Interest Rate Cap Agreement with a SOFR strike rate equal to the Strike Rate. The Interest Rate Cap Agreement (i) shall be in a form and the aggregate notional amount of whichsubstance acceptable to Lender, when taken together(ii) shall at all times be with a Counterparty, is (iii) shall at all times be for a duration at least equal to the aggregate Commitments, and shall comply with end of the terms thereofInterest Accrual Period in which the then current Stated Maturity Date occurs, and (iiiv) assign shall at all times have a notional amount equal to or greater than the principal balance of the Loan and shall at all times provide for a strike rate to be equal to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenders, all of the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Strike Rate. Borrower Interest Rate Cap for Party shall direct such Counterparty to deposit directly into the benefit Restricted Account, or from and after an Event of Default, as directed by Lxxxxx, any amounts due Borrower Interest Rate Cap Party under such Interest Rate Cap Agreement so long as any portion of the Administrative Agent and Debt is outstanding, provided that the LendersDebt shall be deemed to be outstanding if the Collateral is transferred by foreclosure or assignment in lieu thereof unless the Loan was paid in full. Additionally, but without any obligation on Borrower Interest Rate Cap Party shall collaterally assign to Lender, pursuant to the part Collateral Assignment of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment shall terminate upon all of its right, title and interest in and to the repayment of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible (and any replacements thereof), including, without limitation, its right to receive any and all payments under the Interest Rate Cap ProviderAgreement (and any replacements thereof), including the related Eligible and Borrower shall, and shall cause Counterparty to, deliver to Lender a fully executed Interest Rate Cap Provider’s acknowledgment of Agreement (which shall, by its terms, authorize the collateral assignment to Lender and require that payments be deposited as directed by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap AgreementLxxxxx).
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Industrial Logistics Properties Trust)
Interest Rate Cap Agreement. If (a) Only in the LIBO Rate event that the Mortgage Loan has been paid in effect on any date full or Mortgage Borrower is greater than or equal to 3.0%, in violation of its obligations of Section 2.4 of the Mortgage Loan Agreement shall the terms of this Section 2.4 be applicable. Borrower shall within thirty (30) days obtain, or cause to be obtained, and shall thereafter maintain in effect, an Interest Rate Cap Agreement with an Acceptable Counterparty, which shall (i) enter into be coterminous with the Loan and maintain in full force the Mortgage Loan, (ii) have a notional amount which shall not at any time be less than the sum of (A) the outstanding principal balance of the Loan, (B) the outstanding principal balance of the Mortgage Loan, (C) the outstanding principal balance of the Mezzanine A Loan, (D) the outstanding principal balance of the Mezzanine B Loan, (E) the outstanding principal balance of the Mezzanine C Loan, (F) the outstanding principal balance of the Mezzanine E Loan, and effect one or more Interest Rate Caps(G) the Unadvanced Mezzanine E Loan Funds, each with an Eligible and (iii) at all times have a strike rate equal to the Strike Rate. The Counterparty shall be obligated under the Interest Rate Cap Provider Agreement to make monthly payments equal to the excess of one (1) month LIBOR over the Strike Rate, calculated on the notional amount. The notional amount of the Interest Rate Cap Agreement may be reduced from time to time in amounts equal to any prepayment of the principal of the Loan, the Mortgage Loan, the Mezzanine A Loan, the Mezzanine B Loan, the Mezzanine C Loan or the Mezzanine E Loan in accordance with Section 2.3 and each Section 2.5 of which satisfies this Agreement, the definition Mortgage Loan Agreement, the Mezzanine A Loan Agreement, the Mezzanine B Loan Agreement, the Mezzanine C Loan Agreement or the Mezzanine E Loan Agreement, as applicable.
(b) Borrower shall collaterally assign to Lender pursuant to an Assignment of Eligible Interest Rate Cap Agreement substantially in the form annexed hereto as Exhibit V, all of its right, title and interest under the Interest Rate Cap Agreement (and any related guarantee, if any) (i) to any and all payments, and (ii) to any and all collateral posted by the Counterparty pursuant to the Interest Rate Cap Agreement. Borrower shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement and notify the Counterparty of such collateral assignment (either in such Interest Rate Cap Agreement or by separate instrument). The Counterparty shall agree in writing to make all payments it is required to make under the Interest Rate Cap Agreement directly to an account specified by Lender. At such time as the Loan is repaid in full, all of Lender’s right, title and interest in the Interest Rate Cap Agreement shall terminate and Lender shall promptly execute and deliver at Borrower’s sole cost and expense, such documents as may be required to evidence Lender’s release of Lender’s security interest in the Interest Rate Cap Agreement and to notify the Counterparty of such release.
(c) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Counterparty (or its credit support provider, if applicable) under the Interest Rate Cap Agreement shall be deposited immediately into an account specified by Lender. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(d) In the event of any downgrade, withdrawal or qualification of the rating of the Counterparty below the First Trigger Ratings with respect to any of the Rating Agencies, the Counterparty shall post collateral pursuant to the Interest Rate Cap Agreement within ten (10) Business Days following such downgrade, withdrawal or qualification.
(e) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or any Replacement Interest Cap Agreement as and when required hereunder, Lender may purchase such Interest Rate Cap Agreement and the aggregate notional amount cost incurred by Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred by Lender until such cost is paid by Borrower to Lender.
(f) Each Interest Rate Cap Agreement shall expressly provide that in the event of whichany downgrade, when taken togetherwithdrawal or qualification of the rating of the Counterparty (or its credit support provider, is if applicable) below the Second Trigger Ratings with respect to any of the Rating Agencies, the Counterparty shall, while posting collateral pursuant to the Interest Rate Cap Agreement, either (i) transfer the Interest Rate Cap Agreement to a replacement Acceptable Counterparty, or (ii) procure a guarantee from an entity whose credit ratings from the Rating Agencies are at least equal to the aggregate CommitmentsFirst Trigger Ratings, and shall comply with the terms thereofwithin thirty (30) calendar days following such downgrade, and (ii) assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenderswithdrawal or qualification, all of as set forth in the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under Agreement.
(g) In connection with an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender an opinion of counsel from counsel for the Counterparty (upon which collateral assignment Lender and its successors and assigns may rely) which shall terminate upon provide, in relevant part, that:
(1) the repayment Counterparty is duly organized, validly existing, and in good standing under the laws of all amounts owing under this Agreement; providedits jurisdiction of incorporation and has the organizational power and authority to execute and deliver, however that if (i) any and to perform its obligations under, the Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or Agreement;
(ii2) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, execution and delivery of the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Providerby the Counterparty, including and any other agreement which the related Eligible Interest Rate Cap Provider’s acknowledgment Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent Organizational Documents) or any law, regulation or contractual restriction binding on or affecting it or its property;
(3) all consents, authorizations and approvals required for the execution and delivery by the Counterparty of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and
(4) the Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the Counterparty and constitutes the legal, valid and binding obligation of the Counterparty, enforceable against the Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
Appears in 1 contract
Samples: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Interest Rate Cap Agreement. If (a) Within five (5) Business Days of the LIBO Rate in effect on any date is greater than or equal to 3.0%Closing Date, the Borrower shall within thirty (30) days obtain, or cause to be obtained, and shall thereafter maintain in effect, an Interest Rate Cap Agreement with an Acceptable Counterparty, which shall (i) enter into be coterminous with the Loan, (ii) have a notional amount which shall not at any time be less than the sum of (A) the outstanding principal balance of the Loan, (B) the outstanding principal balance of the Mezzanine A Loan, and maintain in full force (C) the Unadvanced Mezzanine A Loan Funds, and effect one or more Interest Rate Caps, each with an Eligible (iii) at all times have a strike rate equal to the Strike Rate. The Counterparty shall be obligated under the Interest Rate Cap Provider Agreement to make monthly payments equal to the excess of one (1) month LIBOR over the Strike Rate, calculated on the notional amount. The notional amount of the Interest Rate Cap Agreement may be reduced from time to time in amounts equal to any prepayment of the principal of the Loan or the Mezzanine A Loan in accordance with Section 2.3 and each Section 2.5 of which satisfies this Agreement or the definition Mezzanine A Loan Agreement, as applicable.
(b) Borrower shall collaterally assign to Lender pursuant to the Assignment of Eligible Interest Rate Cap Agreement all of its right, title and interest to receive any and all payments under the Interest Rate Cap Agreement (and any related guarantee, if any) and shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement and notify the Counterparty of such collateral assignment (either in such Interest Rate Cap Agreement or by separate instrument). The Counterparty shall agree in writing to make all payments it is required to make under the Interest Rate Cap Agreement directly to the Lockbox Account or if the Lockbox Account is not then required to be in effect, into such account as specified by Lender. At such time as the Loan is repaid in full, all of Lender’s right, title and interest in the Interest Rate Cap Agreement shall terminate and Lender shall promptly execute and deliver at Borrower’s sole cost and expense, such documents as may be required to evidence Lender’s release of Lender’s security interest in the Interest Rate Cap Agreement and to notify the Counterparty of such release.
(c) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Counterparty under the Interest Rate Cap Agreement shall be deposited immediately into the Lockbox Account or if the Lockbox Account is not then required to be in effect, into such account as specified by Lender. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(d) In the event of any downgrade, withdrawal or qualification of the rating of the Counterparty below (i) a long-term unsecured debt rating of “A+” (or the equivalent) by the Rating Agencies or (ii) a short-term unsecured debt rating of “A-1+” (or the equivalent) by the Rating Agencies, and the Counterparty fails to comply with the requirement of clause (f) below, Borrower shall replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement with an Acceptable Counterparty not later than ten (10) Business Days following receipt of notice from Lender or Servicer of such downgrade, withdrawal or qualification.
(e) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or any Replacement Interest Cap Agreement as and when required hereunder, Lender may purchase such Interest Rate Cap Agreement and the aggregate notional amount cost incurred by Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred by Lender until such cost is paid by Borrower to Lender.
(f) Each Interest Rate Cap Agreement shall contain the following language or its equivalent: “In the event of whichany downgrade, when taken together, is at least equal to withdrawal or qualification of (i) the aggregate Commitments, and shall comply with long-term unsecured debt rating of the terms thereof, and Counterparty below “A+” (or the equivalent) by the Rating Agencies or (ii) assign to the Administrative Agent, for the equal and ratable benefit short-term unsecured debt rating of the Administrative Agent Counterparty below “A-1+” (or the equivalent) by the Rating Agencies, the Counterparty must, within 30 days, either (x) post collateral on terms acceptable to each Rating Agency or (y) find a replacement Acceptable Counterparty, at the Counterparty’s sole cost and Lendersexpense, all of acceptable to each Rating Agency (notwithstanding the Borrowerforegoing, if the Counterparty’s right rating is downgraded to “A-2” or lower, only the option described in clause (y) will be acceptable); provided that, notwithstanding such a downgrade, withdrawal or qualification, unless and title to and interest in each Interest Rate Cap, such that until the Administrative Agent shall have Counterparty transfers the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for Agreement to a replacement Acceptable Counterparty pursuant to the benefit foregoing clause (y), the Counterparty will continue to perform its obligations under the Interest Rate Cap Agreement. Failure to satisfy the foregoing shall constitute an Additional Termination Event as defined by Section 5(b)(v) of the Administrative Agent and ISDA Master Agreement, with the Lenders, but without any obligation on Counterparty as the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under Affected Party.”
(g) In connection with an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender an opinion of counsel from counsel for the Counterparty (upon which collateral assignment Lender and its successors and assigns may rely) which shall terminate upon provide, in relevant part, that:
(1) the repayment Counterparty is duly organized, validly existing, and in good standing under the laws of all amounts owing under this Agreement; providedits jurisdiction of incorporation and has the organizational power and authority to execute and deliver, however that if (i) any and to perform its obligations under, the Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or Agreement;
(ii2) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, execution and delivery of the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Providerby the Counterparty, including and any other agreement which the related Eligible Interest Rate Cap Provider’s acknowledgment Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property;
(3) all consents, authorizations and approvals required for the execution and delivery by the Counterparty of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and
(4) the Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the Counterparty and constitutes the legal, valid and binding obligation of the Counterparty, enforceable against the Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
Appears in 1 contract
Samples: Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Interest Rate Cap Agreement. If (a) Only in the LIBO Rate event that the Mortgage Loan has been paid in effect on any date full or Mortgage Borrower is greater than or equal to 3.0%, in violation of its obligations of Section 2.4 of the Mortgage Loan Agreement shall the terms of this Section 2.4 be applicable. Borrower shall within thirty (30) days obtain, or cause to be obtained, and shall thereafter maintain in effect, an Interest Rate Cap Agreement with an Acceptable Counterparty, which shall (i) enter into be coterminous with the Loan and maintain in full force the Mortgage Loan, (ii) have a notional amount which shall not at any time be less than the sum of (A) the outstanding principal balance of the Loan, (B) the outstanding principal balance of the Mortgage Loan, (C) the outstanding principal balance of the Mezzanine A Loan, (D) the outstanding principal balance of the Mezzanine B Loan, (E) the outstanding principal balance of the Mezzanine C Loan, (F) the outstanding principal balance of the Mezzanine D Loan, and effect one or more Interest Rate Caps(G) the Unadvanced Loan Funds, each with an Eligible and (iii) at all times have a strike rate equal to the Strike Rate. The Counterparty shall be obligated under the Interest Rate Cap Provider Agreement to make monthly payments equal to the excess of one (1) month LIBOR over the Strike Rate, calculated on the notional amount. The notional amount of the Interest Rate Cap Agreement may be reduced from time to time in amounts equal to any prepayment of the principal of the Loan, the Mortgage Loan, the Mezzanine A Loan, the Mezzanine B Loan, the Mezzanine C Loan or the Mezzanine D Loan in accordance with Section 2.3 and each Section 2.5 of which satisfies this Agreement, the definition Mortgage Loan Agreement, the Mezzanine A Loan Agreement, the Mezzanine B Loan Agreement, the Mezzanine C Loan Agreement or the Mezzanine D Loan Agreement, as applicable.
(b) Borrower shall collaterally assign to Lender pursuant to an Assignment of Eligible Interest Rate Cap Agreement substantially in the form annexed hereto as Exhibit W, all of its right, title and interest under the Interest Rate Cap Agreement (and any related guarantee, if any) (i) to any and all payments, and (ii) to any and all collateral posted by the Counterparty pursuant to the Interest Rate Cap Agreement. Borrower shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement and notify the Counterparty of such collateral assignment (either in such Interest Rate Cap Agreement or by separate instrument). The Counterparty shall agree in writing to make all payments it is required to make under the Interest Rate Cap Agreement directly to an account specified by Lender. At such time as the Loan is repaid in full, all of Lender’s right, title and interest in the Interest Rate Cap Agreement shall terminate and Lender shall promptly execute and deliver at Borrower’s sole cost and expense, such documents as may be required to evidence Lender’s release of Lender’s security interest in the Interest Rate Cap Agreement and to notify the Counterparty of such release.
(c) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Counterparty (or its credit support provider, if applicable) under the Interest Rate Cap Agreement shall be deposited immediately into an account specified by Lender. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(d) In the event of any downgrade, withdrawal or qualification of the rating of the Counterparty below the First Trigger Ratings with respect to any of the Rating Agencies, the Counterparty shall post collateral pursuant to the Interest Rate Cap Agreement within ten (10) Business Days following such downgrade, withdrawal or qualification.
(e) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or any Replacement Interest Cap Agreement as and when required hereunder, Lender may purchase such Interest Rate Cap Agreement and the aggregate notional amount cost incurred by Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred by Lender until such cost is paid by Borrower to Lender.
(f) Each Interest Rate Cap Agreement shall expressly provide that in the event of whichany downgrade, when taken togetherwithdrawal or qualification of the rating of the Counterparty (or its credit support provider, is if applicable) below the Second Trigger Ratings with respect to any of the Rating Agencies, the Counterparty shall, while posting collateral pursuant to the Interest Rate Cap Agreement, either (i) transfer the Interest Rate Cap Agreement to a replacement Acceptable Counterparty, or (ii) procure a guarantee from an entity whose credit ratings from the Rating Agencies are at least equal to the aggregate CommitmentsFirst Trigger Ratings, and shall comply with the terms thereofwithin thirty (30) calendar days following such downgrade, and (ii) assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenderswithdrawal or qualification, all of as set forth in the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under Agreement.
(g) In connection with an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender an opinion of counsel from counsel for the Counterparty (upon which collateral assignment Lender and its successors and assigns may rely) which shall terminate upon provide, in relevant part, that:
(1) the repayment Counterparty is duly organized, validly existing, and in good standing under the laws of all amounts owing under this Agreement; providedits jurisdiction of incorporation and has the organizational power and authority to execute and deliver, however that if (i) any and to perform its obligations under, the Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or Agreement;
(ii2) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, execution and delivery of the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Providerby the Counterparty, including and any other agreement which the related Eligible Interest Rate Cap Provider’s acknowledgment Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent Organizational Documents) or any law, regulation or contractual restriction binding on or affecting it or its property;
(3) all consents, authorizations and approvals required for the execution and delivery by the Counterparty of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and
(4) the Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the Counterparty and constitutes the legal, valid and binding obligation of the Counterparty, enforceable against the Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
Appears in 1 contract
Samples: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Interest Rate Cap Agreement. If (a) Prior to or contemporaneously with the LIBO Rate in effect on any date is greater than or equal to 3.0%Closing Date, the Borrower shall within thirty (30) days thereafter (i) enter into and maintain in full force and effect one or more Interest Rate Caps, each with an Eligible Interest Rate Cap Provider and each of which satisfies the definition of Eligible Party shall enter into an Interest Rate Cap Agreement with a SOFR strike rate equal to the Strike Rate. The Interest Rate Cap Agreement (i) shall be in a form and the aggregate notional amount of whichsubstance acceptable to Lender, when taken together(ii) shall at all times be with a Counterparty, is (iii) shall at all times be for a duration at least equal to the aggregate Commitments, and shall comply with end of the terms thereofInterest Accrual Period in which the then current Stated Maturity Date occurs, and (iiiv) assign shall at all times have a notional amount equal to or greater than the principal balance of the Loan and shall at all times provide for a strike rate to be equal to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenders, all of the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Strike Rate. Borrower Interest Rate Cap for the benefit Party shall direct such Counterparty to deposit as directed by Lxxxxx, any amounts due Borrower Interest Rate Cap Party under such Interest Rate Cap Agreement so long as any portion of the Administrative Agent and Debt is outstanding, provided that the LendersDebt shall be deemed to be outstanding if the Collateral is transferred by foreclosure or assignment in lieu thereof unless the Loan was paid in full. Additionally, but without any obligation on Borrower Interest Rate Cap Party shall collaterally assign to Lender, pursuant to the part Collateral Assignment of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment shall terminate upon all of its right, title and interest in and to the repayment of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible (and any replacements thereof), including, without limitation, its right to receive any and all payments under the Interest Rate Cap ProviderAgreement (and any replacements thereof), including the related Eligible and Borrower shall, and shall cause Counterparty to, deliver to Lender a fully executed Interest Rate Cap Provider’s acknowledgment of Agreement (which shall, by its terms, authorize the collateral assignment to Lender and require that payments be deposited as directed by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap AgreementLxxxxx).
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Industrial Logistics Properties Trust)
Interest Rate Cap Agreement. If (a) Within five (5) Business Days of the LIBO Rate in effect on any date is greater than or equal to 3.0%Closing Date, the Borrower shall within thirty (30) days obtain, or cause to be obtained, and shall thereafter maintain in effect, an Interest Rate Cap Agreement with an Acceptable Counterparty, which shall (i) enter into be coterminous with the Loan, (ii) have a notional amount which shall not at any time be less than the sum of (A) the outstanding principal balance of the Loan, (B) the outstanding principal balance of the Mezzanine A Loan, and maintain in full force (C) the Unadvanced Mezzanine A Loan Funds, and effect one or more Interest Rate Caps, each with an Eligible (iii) at all times have a strike rate equal to the Strike Rate. The Counterparty shall be obligated under the Interest Rate Cap Provider Agreement to make monthly payments equal to the excess of one (1) month LIBOR over the Strike Rate, calculated on the notional amount. The notional amount of the Interest Rate Cap Agreement may be reduced from time to time in amounts equal to any prepayment of the principal of the Loan or the Mezzanine A Loan in accordance with Section 2.3 and each Section 2.5 of which satisfies this Agreement or the definition Mezzanine A Loan Agreement, as applicable.
(b) Borrower shall collaterally assign to Lender pursuant to the Assignment of Eligible Interest Rate Cap Agreement all of its right, title and interest under the Interest Rate Cap Agreement (and any related guarantee, if any) (i) to any and all payments, and (ii) to any and all collateral posted by the Counterparty pursuant to the Interest Rate Cap Agreement. Borrower shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement and notify the Counterparty of such collateral assignment (either in such Interest Rate Cap Agreement or by separate instrument). The Counterparty shall agree in writing to make all payments it is required to make under the Interest Rate Cap Agreement directly to the Lockbox Account or if the Lockbox Account is not then required to be in effect, into such account as specified by Lender. At such time as the Loan is repaid in full, all of Lender’s right, title and interest in the Interest Rate Cap Agreement shall terminate and Lender shall promptly execute and deliver at Borrower’s sole cost and expense, such documents as may be required to evidence Lender’s release of Lender’s security interest in the Interest Rate Cap Agreement and to notify the Counterparty of such release.
(c) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Counterparty (or its credit support provider, if applicable) under the Interest Rate Cap Agreement shall be deposited immediately into the Lockbox Account or if the Lockbox Account is not then required to be in effect, into such account as specified by Lender. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(d) In the event of any downgrade, withdrawal or qualification of the rating of the Counterparty below the First Trigger Ratings with respect to any of the Rating Agencies, the Counterparty shall post collateral pursuant to the Interest Rate Cap Agreement within ten (10) Business Days following such downgrade, withdrawal or qualification.
(e) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or any Replacement Interest Cap Agreement as and when required hereunder, Lender may purchase such Interest Rate Cap Agreement and the aggregate notional amount cost incurred by Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred by Lender until such cost is paid by Borrower to Lender.
(f) Each Interest Rate Cap Agreement shall expressly provide that in the event of whichany downgrade, when taken togetherwithdrawal or qualification of the rating of the Counterparty (or its credit support provider, is if applicable) below the Second Trigger Ratings with respect to any of the Rating Agencies, the Counterparty shall, while posting collateral pursuant to the Interest Rate Cap Agreement, either (i) transfer the Interest Rate Cap Agreement to a replacement Acceptable Counterparty, or (ii) procure a guarantee from an entity whose credit ratings from the Rating Agencies are at least equal to the aggregate CommitmentsFirst Trigger Ratings, and shall comply with the terms thereofwithin thirty (30) calendar days following such downgrade, and (ii) assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenderswithdrawal or qualification, all of as set forth in the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under Agreement.
(g) In connection with an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender an opinion of counsel from counsel for the Counterparty (upon which collateral assignment Lender and its successors and assigns may rely) which shall terminate upon provide, in relevant part, that:
(1) the repayment Counterparty is duly organized, validly existing, and in good standing under the laws of all amounts owing under this Agreement; providedits jurisdiction of incorporation and has the organizational power and authority to execute and deliver, however that if (i) any and to perform its obligations under, the Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or Agreement;
(ii2) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, execution and delivery of the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Providerby the Counterparty, including and any other agreement which the related Eligible Interest Rate Cap Provider’s acknowledgment Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property;
(3) all consents, authorizations and approvals required for the execution and delivery by the Counterparty of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and
(4) the Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the Counterparty and constitutes the legal, valid and binding obligation of the Counterparty, enforceable against the Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
Appears in 1 contract
Samples: Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Interest Rate Cap Agreement. If the LIBO Rate in effect on any date is greater than or equal (A) As a condition to 3.0%Closing, the Borrower shall within thirty purchase and pledge and deliver to Lender an interest rate cap agreement satisfying the criteria set forth below (30) days thereafter (i) enter into the "Cap"), and Borrower shall maintain such Cap in the possession --- of Lender, in full force and effect one or more Interest Rate Capseffect, each with an Eligible Interest Rate until all Obligations are fully and finally repaid. The Cap Provider and each of which satisfies the definition of Eligible Interest Rate Cap Agreement and the aggregate (i) shall have a notional amount of which, when taken together, is at least equal to the aggregate Commitmentsoutstanding principal balance of the Loan, (ii) shall provide that to the extent that LIBO Rate exceeds eight percent (8%) per annum (the "Cap Threshold Rate"), then the Cap Provider shall pay to Lender not less ------------------ than the amount of interest that would accrue on the Loan at a per annum rate equal to difference between LIBO Rate and the Cap Threshold Rate, (iii) shall comply with be in form and substance reasonably satisfactory to Lender, (iv) shall have a term equal to the terms thereofTerm of the Loan, and (iiv) assign shall be issued by a financial institution (the "Cap Provider") having a financial rating by S&P of at least ------------ "AA", and by Xxxxx'x of at least "Aa2", and otherwise be acceptable to Lender in Lender's reasonable discretion at the Administrative Agenttime that the Cap is issued.
(B) If at any time the long-term unsecured debt rating assigned to any Cap Provider (if it carries a long-term rating) by S&P shall fall below "AA-" or by Xxxxx'x shall fall below "Aa3" and the short-term unsecured debt rating assigned to any Cap Provider (if it carries a short term rating) by S&P shall fall below "A-1+" or by Xxxxx'x shall fall below "P-1", for Borrower shall be required to deliver a replacement Cap in substantially the equal and ratable benefit form of the Administrative Agent Cap delivered at Closing issued by a Cap Provider having a long-term unsecured debt rating by S&P of at least "AA-" and Lendersby Xxxxx'x of at least "Aa3" or having a short-term unsecured debt rating by S&P of at least "A-1+" and by Xxxxx'x of at least "P-1", providing for a cap "strike price" not greater than the Cap Threshold Rate and otherwise reasonably acceptable to Lender (a replacement Cap meeting all of the Borrower’s right and title to and interest foregoing conditions, an "Acceptable Replacement Cap") within fifteen -------------------------- (15) Business Days after such downgrade of the Cap Provider, together with an assignment of such Cap substantially in each Interest Rate Cap, such that the Administrative Agent shall have form of the right to enforce the Borrower’s rights and remedies under each Interest Assignment of Rate Cap and such Financing Statements and opinions of counsel to the Cap Provider as Lender may require each in form and substance reasonably acceptable to Lender. If, for any reason, Borrower is unable to deliver an Acceptable Replacement Cap when required hereunder, then at or prior to the benefit time when the replacement Cap is due hereunder, Borrower shall deliver to Lender cash security (such cash security together with any interest thereon, the "Cap Reserve") in an amount ----------- sufficient to cover the amount of additional interest which Lender reasonably estimates may be incurred during the remaining Term of the Administrative Agent and the Lenders, but without any obligation on the part Loan as a result of the Administrative Agent, LIBO Rate exceeding the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap AgreementThreshold Rate, which collateral assignment Cap Reserve shall terminate upon be held by Lender and applied to the repayment of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate Cap Provider ceases to be Obligations in accordance with Section 6.
1. If Borrower shall thereafter deliver an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Acceptable Replacement Cap, the remaining balance of the Cap Reserve shall be returned to Borrower. Borrower shall within thirty be required to pay any and all reasonable costs and expenses (30including, without limitation, reasonable attorneys' fees and disbursements) days incurred by Lender (xand by any Servicer and trustee in connection with any Securitization backed in whole or in part by the Loan) cause in connection with delivery of such Person to assign its obligations Acceptable Replacement Cap and all related documentation and opinions required above.
(C) All payments made by the Cap Provider under the related Interest Rate Cap to a new Eligible Interest Rate shall be deposited directly by the Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement into the Central Account and applied in accordance with an Eligible Interest Rate Cap Provider, including the related Eligible Interest Rate Cap Provider’s acknowledgment of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Cash Management Agreement.
Appears in 1 contract
Interest Rate Cap Agreement. If As of the LIBO Rate in effect on any date is greater than or equal hereof, Borrower has entered into, made all payments required under, and satisfied all conditions precedent to 3.0%the effectiveness of, an interest rate protection agreement that satisfies all of the Borrower shall within thirty following conditions (30) days thereafter such interest rate protection agreement together with (i) enter any extensions thereof or (ii) any other interest rate protection agreement entered into pursuant to this Agreement or any other Loan Documents (including, without limitation, Section 2.7.5 and maintain in full force and effect one or more Interest Rate CapsSection 2.9 hereof), each with an Eligible being referred to herein as the “Interest Rate Cap Provider Agreement”):
(a) The Interest Rate Cap Agreement is with a financial institution having a long term, unsecured and each unsubordinated debt rating of at least “A+” by S&P and “A1” by Xxxxx’x (or the equivalent rating from another Rating Agency acceptable to Lender, an “Acceptable Counterparty”); has a term ending no earlier than the Stated Maturity Date; is an interest rate cap in respect of a notational amount not less than the maximum Principal amount of the Loan that shall have the effect of capping LIBOR at 3.50% per annum; and provided that the only obligation of Borrower thereunder is the making of a single payment upon the execution and delivery thereof. For the purposes hereof, if the obligations of the counterparty are guaranteed, under the terms of a guaranty acceptable to Lender in its sole discretion, by a financial institution having a long term, unsecured and unsubordinated debt rating of at least “A-” by S&P and “A3” by Xxxxx’x or the equivalent rating from another Rating Agency acceptable to Lender, then such counterparty shall be deemed to be an Acceptable Counterparty for the purposes of this Agreement.
(b) Borrower’s interest in such Interest Rate Cap Agreement has been assigned to Lender pursuant to documentation satisfactory to Lender in form and substance, and the counterparty to such Interest Rate Cap Agreement has executed and delivered to Lender an acknowledgment of such assignment, which satisfies acknowledgment shall be satisfactory to Lender in form and substance and, without limitation, shall include such counterparty’s agreement to (i) pay in accordance with the definition written direction of Eligible Lender, subject to Section 2.7.4 hereof, all sums payable by such counterparty pursuant to the Interest Rate Cap Agreement and the aggregate notional amount of which, when taken together, is at least equal to the aggregate Commitments, and shall comply with the terms thereof, and (ii) assign to designate a successor counterparty under the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenders, all of the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment successor counterparty shall terminate upon satisfy the repayment criteria set forth in clause (a) above and this clause (b), not later than ten (10) Business Days after the long term, unsecured and unsubordinated debt rating of all amounts owing under this Agreement; providedsuch counterparty, however that if or its guarantor, as applicable, is downgraded below “A-” by S&P or “A3” by Xxxxx’x.
(ic) any Interest Rate Cap Provider ceases to be In connection with an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with entered into pursuant to this Section 2.7, Borrower shall obtain and deliver to Lender an Eligible opinion of counsel from counsel for the counterparty (and, if applicable, any guarantor) (which counsel may be in-house counsel for the counterparty and/or such guarantor) (upon which Lender and its successors and assigns and the Rating Agencies may rely), which shall provide, in relevant part, that:
(i) the counterparty (and, if applicable, any guarantor) is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation or organization and has the organizational power and authority to execute and deliver, and to perform its obligations under, the Interest Rate Cap ProviderAgreement and any other agreement which the counterparty (and, including if applicable, any guarantor) has executed and delivered pursuant thereto;
(ii) the related Eligible execution and delivery of the Interest Rate Cap Provider’s acknowledgment Agreement by the counterparty (and, if applicable, any guarantor), and any other agreement which the counterparty (and, if applicable, any guarantor) has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property;
(iii) all consents, authorizations and approvals required for the execution and delivery by the counterparty (and, if applicable, any guarantor) of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Agreement, and any other agreement which the counterparty (and, if applicable, any guarantor) has executed and delivered pursuant thereto, and the performance of its obligations thereunder have be obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery and performance; and
(iv) the Interest Rate Cap Agreement, and any other agreement which the counterparty (and, if applicable, any guarantor) has executed and delivered pursuant thereto, has been duly executed and delivered by the counterparty (and, if applicable, any guarantor) and constitutes the legal, valid and binding obligation of the counterparty (and, if applicable, any guarantor), enforceable against the counterparty (and, if applicable, any guarantor) in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
Appears in 1 contract
Interest Rate Cap Agreement. If (a) On or prior to the LIBO Rate in effect on any date is greater than or equal to 3.0%Closing Date, the Borrower shall within thirty enter into an agreement with (30or guaranteed by) days thereafter an Acceptable Counterparty, which agreement (an “Interest Rate Cap Agreement”) shall (i) enter into be in form and maintain substance reasonably satisfactory to Lender, (ii) contain the agreement of such Acceptable Counterparty to make payments to Borrower in full force the event the Applicable Rate Index exceeds a strike rate of no greater than three percent (3.00%), (iii) require payments based on a notional amount at least equal to the Loan Amount, (iv) not terminate prior to the date that is twenty-four (24) months following the Closing Date, and effect one or more Interest Rate Caps(v) require payments to be made on the date that is three (3) Business Days prior to the applicable Payment Date. Borrower shall collaterally assign to Lender, each with pursuant to an Eligible assignment agreement in form and substance acceptable to Lender (the “Assignment of Interest Rate Cap Provider Agreement”), all of its right, title and interest (but not its obligations) to receive any and all payments under any Interest Rate Cap Agreement, and shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the collateral assignment to Lender and require that payments be deposited directly into the account designated by Lender) and shall notify the Acceptable Counterparty of such assignment and obtain from such counterparty a confirmation of the assignment of such Interest Rate Cap Agreement to Lender in form and content acceptable to Lender.
(b) Not later than the date that is sixty (60) days prior to the date on which the initial Interest Rate Cap Agreement described in Section 2.2.7(a) terminates, Borrower shall enter into an
(c) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by an Acceptable Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(d) In the event of any downgrade, withdrawal or qualification of the rating of the counterparty under the Interest Rate Cap Agreement such that such counterparty is a Downgraded Counterparty, or in the event of any default by an Acceptable Counterparty under the Interest Rate Cap Agreement, Borrower shall, not later than fifteen (15) days following the receipt by Borrower of notice of such downgrade, withdrawal, qualification, or default (whether received from Lender, the Acceptable Counterparty, or otherwise), then Borrower shall replace the Interest Rate Cap Agreement with an Interest Rate Cap Agreement satisfying the requirements of Section 2.2.7(a) above not later than fifteen (15) days following the receipt by Borrower of notice of such downgrade (whether received from Lender, the Acceptable Counterparty, or otherwise).
(e) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or fails to maintain the Interest Rate Cap Agreement, in each case, in accordance with the terms and provisions of which satisfies this Agreement, Lender may (but shall have no obligation to) purchase the definition of Eligible Interest Rate Cap Agreement and the aggregate notional amount cost incurred by Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred by Lender until such cost is reimbursed by Borrower to Lender.
(f) In connection with the Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender, within twenty (20) Business Days following the Closing Date (or, with respect to a Replacement Interest Rate Cap Agreement or Substitute Interest Rate Cap Agreement, within twenty (20) Business Days following the effective date of whichsuch Replacement Interest Rate Cap Agreement or Substitute Interest Rate Cap Agreement, when taken togetheras applicable), an opinion from counsel (which counsel may be in-house counsel for the Acceptable Counterparty) for the Acceptable Counterparty (upon which Lender and its successors and assigns may rely) which shall provide, in relevant part, that: (i) the Acceptable Counterparty is at least equal to the aggregate Commitmentsduly organized, validly existing, and shall comply with in good standing under the terms thereoflaws of its jurisdiction of incorporation and has the organizational power and authority to execute and deliver, and to perform its obligations under, the Interest Rate Cap Agreement; (ii) assign the execution and delivery of the Interest Rate Cap Agreement by the Acceptable Counterparty, and any other agreement which the Acceptable Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or
(g) Notwithstanding anything to the Administrative Agentcontrary contained in this Section 2.2.7 or elsewhere in this Agreement, for in the equal and ratable benefit of the Administrative Agent and Lendersevent a Rate Conversion occurs, all of the Borrower’s right and title to and interest in each then, within ten (10) Business Days after such Rate Conversion, Borrower shall enter into a Substitute Interest Rate CapCap Agreement (and in connection therewith, such that but not prior to Borrower taking all the Administrative Agent actions described in this Section 2.2.7(g), Borrower shall have the right to enforce the Borrower’s rights and remedies under each terminate any then-existing Interest Rate Cap for Agreement), together with, within five (5) Business Days thereafter, an assignment of interest rate cap agreement with respect to such Substitute Interest Rate Cap Agreement in form and substance substantially similar to the benefit Assignment of Interest Rate Cap Agreement delivered in connection with the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an then-existing Interest Rate Cap Agreement, together with legal opinions of counsel to the counterparty and Borrower as reasonably required by Lender. Notwithstanding anything to the contrary set forth in this Section 2.2.7, if, following a Rate Conversion, Lender determines (which collateral assignment shall terminate upon the repayment determination will be based on market customs and/or proposals of all amounts owing under this Agreement; provided, however industry associations) that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Substitute Interest Rate Cap Agreement with is not then generally commercially available from an Eligible Acceptable Counterparty, then, Borrower shall not be required to obtain a Substitute Interest Rate Cap ProviderAgreement but shall instead be required to purchase such other hedging product as reasonably determined by Lender would afford Lender substantially equivalent protection from increases in the interest rate, including the related Eligible Interest Rate Cap Provider’s acknowledgment of the collateral assignment by the Borrower which such alternative shall be satisfactory to the Administrative Agent of such Eligible Interest Rate Cap Agreement.Lender in its reasonable discretion. SECTION
Appears in 1 contract
Interest Rate Cap Agreement. If Borrower shall, on or prior to the LIBO Third Amendment Date, (a) obtain an Interest Rate in effect on any date is greater Cap Agreement (the “Initial Interest Rate Cap Agreement”) with a term expiring no earlier than or April 9, 2024, with an Approved Counterparty and having a strike rate (the “Strike Price”) equal to 3.0(or, at Borrower’s option, lower than) three and fifteen hundredths percent (3.15%), and (b) collaterally assign to Administrative Agent, for the benefit of the Lenders, pursuant to an Assignment of Interest Rate Cap Agreement, all of its right, title and interest to receive any and all payments under such Interest Rate Cap Agreement. Prior to the expiration of the Initial Interest Rate Cap Agreement, Borrower shall within thirty (30) days thereafter either (i) enter into and maintain in full force and effect one or more Interest Rate Caps, each with an Eligible extend the term of the Initial Interest Rate Cap Provider and each Agreement for not less than six (6) months, or (ii) (x) purchase a new Interest Rate Cap Agreement with a term expiring no earlier than six (6) months following the expiration of which satisfies the definition of Eligible Initial Interest Rate Cap Agreement and the aggregate notional amount of which, when taken together, is at least with an Approved Counterparty and having a Strike Price equal to the aggregate Commitments(or, at Borrower’s option, lower than) three and shall comply with the terms thereoffifteen hundredths percent (3.15%), and (iiy) collaterally assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenders, pursuant to an Assignment of Interest Rate Cap Agreement, all of the Borrower’s right and its right, title to and interest in each Interest Rate Cap, to receive any and all payments under such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each new Interest Rate Cap Agreement. Prior to the expiration of such extension or replacement of the Initial Interest Rate Cap Agreement, Borrower shall either (i) further extend the term of the Initial Interest Rate Cap Agreement for not less one (1) year, or (ii) (x) purchase a new Interest Rate Cap Agreement with a term expiring no earlier than one (1) year following the expiration of such extension or replacement of the Initial Interest Rate Cap Agreement and with an Approved Counterparty and having a Strike Price equal to (or, at Borrower’s option, lower than) three and fifteen hundredths percent (3.15%), and (y) collaterally assign to Administrative Agent, for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part pursuant to an Assignment of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment shall terminate upon all of its right, title and interest to receive any and all payments under such new Interest Rate Cap Agreement. In the repayment event that such further extension of all amounts owing under this the Initial Interest Rate Cap Agreement or new Interest Rate Cap Agreement is scheduled to expire prior to the Initial Maturity Date, Borrower shall, prior to the expiration of such extension of the Initial Interest Rate Cap Agreement or new Interest Rate Cap Agreement; provided, however that if either (i) any further extend the term of the Initial Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider Agreement for a period expiring no earlier than the Initial Maturity Date, or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to purchase a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with a term expiring no earlier than the Initial Maturity Date and with an Eligible Interest Rate Cap ProviderApproved Counterparty and having a Strike Price equal to (or, including at Borrower’s option, lower than) three and fifteen hundredths percent (3.15%), and (y) collaterally assign to Administrative Agent, for the related Eligible Interest Rate Cap Provider’s acknowledgment benefit of the collateral assignment by the Borrower Lenders, pursuant to the Administrative Agent an Assignment of such Eligible Interest Rate Cap Agreement, all of its right, title and interest to receive any and all payments under such new Interest Rate Cap Agreement. Upon the occurrence of an Alternative Rate Trigger, Borrower shall, within ten (10) Business Days after conversion of all or a portion of the Loan to an Alternative Rate Loan: (i) provide an Interest Rate Cap Agreement which has the effect of capping the Alternative Rate Index rate at a strike price equal to (or, at Borrower’s option, lower than) the Alternative Rate Strike Price; and (ii) collaterally assign to Administrative Agent, for the benefit of the Lenders, pursuant to an Assignment of Interest Rate Cap Agreement, all of its right, title and interest to receive any and all payments under such Interest Rate Cap Agreement. Notwithstanding the foregoing, if the Alternative Rate Index is not publicly recognized by ISDA as an alternative to Term SOFR (or any other then-applicable Rate Index) and/or ISDA has not approved an amendment to hedge agreements generally providing such Alternative Rate Index as a standard alternative to Term SOFR (or any other then-applicable Rate Index), Borrower shall purchase such other hedging product as reasonably determined by Administrative Agent or, in the event such product is not commercially available, Borrower and Administrative Agent shall cooperate to find a mutually agreeable alternative to an Interest Rate Cap Agreement that would afford the applicable Lender(s) substantially equivalent protection from increases in the interest rate.”
Appears in 1 contract
Samples: Mezzanine Loan and Security Agreement (NRI Real Estate Investment & Technology, Inc.)
Interest Rate Cap Agreement. If 2.%2.%3.%4. Prior to or contemporaneously with the LIBO Rate in effect on any date is greater than or equal to 3.0%Closing Date, the Borrower shall within thirty (30) days thereafter (i) enter into and maintain in full force and effect one or more Interest Rate Caps, each with an Eligible Interest Rate Cap Provider and each of which satisfies the definition of Eligible a Junior Mezzanine Interest Rate Cap Agreement and the aggregate notional amount of which, when taken together, is at least with a LIBOR strike price equal to the aggregate CommitmentsStrike Price. The Junior Mezzanine Interest Rate Cap Agreement (i) shall at all times be in a form and substance reasonably acceptable to Lender, and shall comply with the terms thereof, and (ii) shall at all times be with an Acceptable Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the Cash Management Account any amounts due Borrower under such Junior Mezzanine Interest Rate Cap Agreement so long as any portion of the Debt exists, provided that the Debt shall be deemed to exist if the Collateral is transferred by judicial or non‑judicial foreclosure or deed-in-lieu thereof, (iv) shall be for a period equal to the term of the Loan and (v) shall at all times have a notional amount equal to or greater than the principal balance of the Loan and shall at all times provide for the applicable Strike Price. Borrower shall collaterally assign to Lender, pursuant to the Administrative AgentCollateral Assignment of Interest Rate Cap Agreement (as the same may be amended, for restated, replaced, supplemented or otherwise modified from time to time, the equal and ratable benefit “Assignment of the Administrative Agent and LendersInterest Rate Cap Agreement”), all of the Borrower’s right and its right, title to and interest in each Interest Rate Cap, such that to receive any and all payments under the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Junior Mezzanine Interest Rate Cap Agreement, which collateral assignment and shall terminate upon the repayment deliver to Lender an executed counterpart of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Junior Mezzanine Interest Rate Cap Agreement with an Eligible Interest Rate Cap Provider(which shall, including by its terms, authorize the related Eligible Interest Rate Cap Provider’s acknowledgment of assignment to Lender and require that payments be deposited directly into the collateral assignment by Cash Management Account) and shall notify the Borrower to the Administrative Agent Acceptable Counterparty of such Eligible Interest Rate Cap Agreementassignment.
Appears in 1 contract
Samples: Junior Mezzanine Loan Agreement (Ashford Hospitality Prime, Inc.)
Interest Rate Cap Agreement. (a) If at any time during the LIBO term of the Loan the net operating income of the Property, as determined by Beneficiary in its sole discretion, is less than 1.40 times the monthly amount of interest payments due under the Loan, Trustor shall enter into an Interest Rate Cap Agreement which shall protect against an increase in effect on any date is greater than or equal interest rates which would cause the Annual Interest Rate to 3.0%, the Borrower shall within thirty exceed a rate to be determined by Beneficiary in its sole discretion.
(30b) days thereafter The Interest Rate Cap Agreement (i) enter into shall be in form acceptable to Beneficiary, (ii) shall be with a counterparty acceptable to Beneficiary and maintain in full force which counterparty shall have a credit rating of “A2” or better by Mxxxx’x Investors Service, Inc., and effect one “A” or more Interest Rate Capsbetter by Standard and Poor’s Rating Group, each with an Eligible (iii) shall direct such acceptable counterparty to deposit any and all payments due under the Interest Rate Cap Provider Agreement directly into an account designated by Beneficiary (“Designated Account”) so long as any portion of the Loan remains outstanding, provided however, for purposes of this requirement, the Loan shall be deemed to be remaining outstanding if the Property is transferred to Beneficiary (or its nominee or designee) by judicial foreclosure or non-judicial foreclosure or by deed-in-lieu thereof, (iv) shall have an initial term of one year, and each thereafter (A) if the net operating income of the Property, as determined by Beneficiary in its sole discretion at any time and from time to time, is or continues to be less than 1.40 times the monthly amount of interest payments due under the Loan (the “NOI Threshold”), then the Interest Rate Cap Agreement then in effect shall be extended for successive one year terms for as long as the net operating income of the Property does not meet the NOI Threshold, and (B) if the net operating income of the Property as determined by Beneficiary in its sole discretion at any time meets or exceeds the NOI Threshold such that an Interest Rate Cap Agreement is not then required, but at any subsequent time (and from time to time), the net operating income of the Property, as determined by Beneficiary in its sole discretion, fails to meet the NOI Threshold, Trustor shall enter into a new Interest Rate Cap Agreement that satisfies all of the terms and conditions of this Section 2.9, including without limitation, that it have an initial term of one year and successive one year terms, if and as required under the terms of this Section 2.9(b) (iv), and (v) shall have an initial notional amount equal to the unpaid principal balance of the Loan.
(c) Trustor shall collaterally assign to Beneficiary all of its right, title and interest to receive any and all payments under the Interest Rate Cap Agreement, and shall deliver to Beneficiary an executed counterpart of such Interest Rate Cap Agreement. Trustor shall comply with all of its obligations under the Interest Rate Cap Agreement. All amounts paid by the counterparty under the Interest Rate Cap Agreement to Trustor or Beneficiary shall be deposited immediately into the Designated Account. Trustor shall take all actions reasonably required by Beneficiary to enforce Beneficiary’s rights under the Interest Rate Cap Agreement in the event of a default by the counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(d) In the event of a downgrade, withdrawal or qualification of the rating of the counterparty by Mxxxx’x Investors Service, Inc., or by Standard & Poor’s Ratings Group below the ratings described in Section 2.9(b), at Beneficiary’s option, Trustor shall replace the Interest Rate Cap Agreement with a replacement Interest Rate Cap Agreement with a counterparty acceptable to Beneficiary not later than ten (10) business days following receipt of notice from Beneficiary of such downgrade, withdrawal or qualification.
(e) In the event that Trustor fails to purchase, deliver and/or maintain the Interest Rate Cap Agreement or any replacement thereof as required hereby or under the terms of the Note, Beneficiary may (in addition to exercising any of its other rights and remedies under the Loan Documents) purchase such Interest Rate Cap Agreement or any replacement thereof and the costs incurred by Beneficiary in purchasing and maintaining the same shall be paid by Trustor with interest thereon at the Default Rate from the date such cost was incurred by Beneficiary until such cost is paid by Trustor to Beneficiary.
(f) If and when an Interest Rate Cap Agreement is required pursuant to Section 2.9(a), Trustor shall obtain and deliver to Beneficiary, prior to or concurrent with its delivery of the executed counterpart of the Interest Rate Cap Agreement, an opinion of counsel for the counterparty (upon which satisfies Beneficiary and its successors and assigns may rely) in form, scope and substance acceptable to Beneficiary regarding the definition authorization of Eligible the counterparty, the legality, validity, and binding effect of the Interest Rate Cap Agreement, and such other matters as Beneficiary shall reasonably require.
(g) The obligation to purchase and maintain the Interest Rate Cap Agreement and the aggregate notional amount of which, when taken together, is at least equal any replacement thereof shall be fully recourse to the aggregate Commitments, and shall comply with the terms thereof, and (ii) assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenders, all of the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent Trustor and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment shall terminate upon the repayment of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Provider, including the related Eligible Interest Rate Cap Provider’s acknowledgment of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap AgreementLiable Party.
Appears in 1 contract
Samples: Deed of Trust, Security Agreement and Fixture Filing (Strategic Hotels & Resorts, Inc)
Interest Rate Cap Agreement. If the LIBO Rate in effect on any date is greater than or equal (A) As a condition to 3.0%Closing, the Borrower shall within thirty purchase and pledge and deliver to Lender an interest rate cap agreement satisfying the criteria set forth below (30) days thereafter (i) enter into the "CAP"), and the Borrower shall maintain such Cap in the possession of Lender, in full force and effect one or more Interest Rate Capseffect, each with an Eligible Interest Rate until all Obligations are fully and finally repaid. The Cap Provider and each of which satisfies the definition of Eligible Interest Rate Cap Agreement and the aggregate (i) shall have a notional amount of which, when taken together, is at least equal to the aggregate Commitmentsoutstanding principal balance of the Loan calculated based upon the declining principal balance of the Loan scheduled to be outstanding over the term of such Cap taking into account scheduled principal amortization hereunder, (ii) shall provide that to the extent that the LIBO Rate exceeds five percent (5.0%) per annum (the "CAP THRESHOLD RATE"), then the Cap Provider shall pay to Lender, on behalf of the Borrower, not less than the amount of interest that would accrue on the Loan at a per annum rate equal to the difference between the LIBO Rate and the Cap Threshold Rate, (iii) shall comply with be in form and substance reasonably satisfactory to Lender, (iv) shall have a term equal to the terms thereofInitial Term of the Loan (or the applicable Extension Term), and (iiv) assign to shall be issued by a financial institution (the Administrative Agent, for the equal "CAP PROVIDER") having a financial rating by S&P of at least "AA-" (and ratable benefit at least an equivalent rating from each of the Administrative Agent and Lenders, all of other Rating Agencies).
(B) If at any time the Borrower’s right and title financial rating assigned to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment shall terminate upon the repayment of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider by S&P shall fall below AA- (or (ii) the equivalent rating for any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Capother Rating Agency), the Borrower shall within thirty (30) days (x) cause such Person be required to assign its obligations under deliver a replacement Cap in substantially the related Interest Rate form of the Cap to delivered at Closing issued by a new Eligible Interest Rate Cap Provider meeting the rating requirements for a Cap Provider under Section 2.3(A)(v), providing for a cap "strike price" not greater than the Cap Threshold Rate (a replacement Cap meeting all of the foregoing conditions, an "ACCEPTABLE REPLACEMENT CAP") within twenty (20) Business Days after receipt of notice from Lender or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Servicer of such downgrade of the Cap Provider, including together with an assignment of such Cap substantially in the related Eligible Interest form of the Assignment of Rate Cap Provider’s acknowledgment and such Financing Statements and opinions of in-house or outside counsel to the collateral assignment Cap Provider as Lender may reasonably require each in form and substance acceptable to Lender. Notwithstanding the foregoing to the contrary, under no circumstances shall the Cap be terminated by the Borrower prior to delivery of an Acceptable Replacement Cap, together with the required documentation with respect thereto, to Lender. If, for any reason, the Borrower is unable to deliver a replacement Cap when required hereunder, then at or prior to the Administrative Agent time when the replacement Cap is due hereunder, the Borrower shall deliver to Lender cash security (such cash security together with any interest thereon, the "CAP RESERVE") in an amount sufficient to cover the amount of such Eligible Interest additional interest which Lender reasonably estimates may be incurred during the remaining term of the Loan (or remaining Extension Term then in effect) as a result of the LIBO Rate exceeding the Cap Threshold Rate, which Cap Reserve shall be held by Lender and applied to the Obligations in accordance with Section 6.
1. Upon delivery of an Acceptable Replacement Cap reasonably acceptable to Lender, the remaining balance of the Cap Reserve shall be promptly returned to the Borrower.
(C) All payments made by the Cap Provider under the Cap shall be deposited directly by the Cap Provider into the Lock Box Account and applied in accordance with the Cash Management Agreement.
Appears in 1 contract
Interest Rate Cap Agreement. If On or before the LIBO "Rate Adjustment Date" (as defined in effect the Loan A Note), or on or before any other date is greater than or equal on which the Loan A commences bearing interest at the "Extension Rate" under the Loan A Note, and thereafter as a condition precedent to 3.0%any Subsequent Advance that will result in the aggregate amount of outstanding Subsequent Advances totaling at least $10,000,000 (excluding any Subsequent Advances already covered by a Cap Agreement assigned to Collateral Agent), and as a condition precedent to the final Subsequent Advance, Borrower shall within thirty (30) days thereafter (i) enter into and at all times thereafter maintain an interest rate cap agreement ("Cap Agreement") in full force connection with the Loans and effect one or more Interest Rate Caps, each with an Eligible Interest Rate Cap Provider and each of which satisfies the definition of Eligible Interest Rate Loan A. Each Cap Agreement and the aggregate shall have a notional amount not less than the sum of (1) the portion of the outstanding principal balance of the Loans then bearing interest at the Libor-based Rate and not covered by another Cap Agreement, plus (2) the outstanding principal balance of Loan A, and shall have a strike price of, or shall otherwise cap Borrower's LIBOR Rate exposure at, the greater of (a) 3.29% or (b) an amount which, when taken togetherincluded within the Libor-based Rate and the "Extension Rate" under the Loan A Note, would result in a Debt Service Coverage Ratio of 1.10 to 1.0 (provided that in calculating the Debt Service Coverage Ratio for purposes of this Section 5.1, the "Lender Verified NOI" (as defined in the Mortgages) shall be deemed to include the undrawn and available amount under the Letter of Credit, if the Letter of Credit is at least equal to the aggregate Commitmentsthen held by Collateral Agent, and shall comply with be deemed to include the terms thereoffunds then on deposit in the TI/LC/Capex/DS Reserve that are available for payment of debt service on the Loan, subject to the "DS Cap" described in the Notes). The form of each Cap Agreement required pursuant to this Section, and the counterparty to each Cap Agreement (ii) assign the "Counterparty"), shall be reasonably satisfactory to Collateral Agent (and shall otherwise satisfy the Administrative Agentratings criteria set forth below). Concurrently with entering into each Cap Agreement, for the equal and ratable benefit of the Administrative Borrower also shall deliver to Collateral Agent and Lenders, all of the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Security Agreement covering such Cap Agreement, which duly executed and delivered by Borrower in favor of Collateral Agent, together with the consent of the Counterparty to such collateral assignment assignment. Each Counterparty shall terminate upon be rated at least AA by Standard & Poor's and Aa2 by Moody's. If the repayment rating of all amounts owing under this Agreement; providedany Counterparty is at any time downgraded below AA- (Standard & Poor's) or Aa3 (Moody's), however that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the then Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate a third party provider rated at least AA by Standard & Poor's and Aa2 by Moody's, which substitute Cap ProviderAgreement shall otherwise comply with the foregoing provisions of this Section. If Borrower is required by the foregoing provisions to obtain a Cap Agreement during the fourth Loan Year, Borrower may satisfy this obligation by obtaining a series of 3-month Cap Agreements that satisfy the foregoing requirements (including the related Eligible Interest Rate requirement that each such Cap Provider’s acknowledgment Agreement be assigned to Collateral Agent), so long as each new Cap Agreement is obtained on or before the expiration date of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate previous Cap Agreement. However, beginning in the fifth Loan Year, each Cap Agreement shall be for a term of not less than one (1) year.
Appears in 1 contract
Interest Rate Cap Agreement. If the LIBO Rate in effect on any date is greater than or equal (A) As a condition to 3.0%Closing, the Borrower shall within thirty pledge (30free and clear of all Liens relating to the Existing Loan or any pledge of such Existing Loan Cap in connection with the Existing Loan) days thereafter and deliver to Lender the interest rate cap agreement relating to the Existing Loan (i) enter into and “Existing Loan Cap”). Such pledge shall be consented to by the provider of such Existing Loan Cap. Borrower shall maintain the Existing Loan Cap in the possession of Lender, in full force and effect one or more Interest Rate Capseffect, each with an Eligible Interest Rate until Borrower delivers to Lender the Cap Provider required pursuant to Section 2.3(B) below.
(B) Not later than February 28, 2003, Borrower shall purchase and each pledge and deliver to Lender a new interest rate cap agreement satisfying the criteria set forth herein (a “Cap”) to replace the Existing Loan Cap. Borrower shall maintain such a Cap in the possession of which satisfies the definition of Eligible Interest Rate Lender, in full force and effect, until all Obligations are fully and finally repaid. Each Cap Agreement and the aggregate provided hereunder (i) shall have a notional amount of which, when taken together, is at least equal to the aggregate Commitments, and shall comply outstanding principal balance of the Loan as such principal balance is from time-to-time reduced in accordance with payments made in accordance with the terms thereofamortization schedule contemplated by Section 2.4(C), (ii) shall provide that to the extent that the LIBO Rate exceeds the rate of interest per annum equal to the Ceiling Rate, then the Cap Provider shall pay to Lender not less than the amount of interest that would accrue from time to time on the principal balance of the Loan at a per annum rate equal to the difference between the LIBO Rate and the Ceiling Rate, (iii) shall be in form and substance reasonably satisfactory to Lender, (iv) shall have a term expiring no earlier than the then applicable Maturity Date, and (iiv) assign shall be issued by a financial institution with a credit rating of “AA” or better as issued by S&P (the “Cap Provider”) and otherwise acceptable to Lender in Lender’s reasonable discretion at the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenders, all of the Borrower’s right and title to and interest in each Interest Rate Cap, such time that the Administrative Agent shall have Cap is issued. In the right to enforce event the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment shall terminate upon the repayment of all amounts owing under this Agreement; provided, however that if (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Provider, including the related Eligible Interest Rate Cap Provider’s acknowledgment rating falls below “AA” at any time during the term of a Cap, Borrower shall, within ten (10) Business Days of notice from Lender, purchase a new Cap, meeting the collateral assignment by the Borrower criteria set forth herein, from a Cap Provider with a rating of “AA” or better. Within ten (10) Business Days prior to the Administrative Agent expiration of such Eligible Interest each Cap, Borrower shall deliver a replacement Cap to Lender. The Ceiling Rate for the Cap Agreementto be provided not later than February 28, 2003 and for each replacement Cap shall be 7.25%.
Appears in 1 contract
Samples: Loan and Security Agreement (Digital Realty Trust, Inc.)
Interest Rate Cap Agreement. If Prior to or contemporaneously with the LIBO Rate Closing Date, Borrower shall have obtained, and thereafter maintain in effect on any date is greater than or equal to 3.0%effect, the Borrower shall within thirty (30) days thereafter (i) enter into and maintain in full force and effect one or more Interest Rate Caps, each with an Eligible Interest Rate Cap Provider and each of which satisfies the definition of Eligible Interest Rate Cap Agreement (the “Initial Interest Rate Cap Agreement”), which:
(a) has a term expiring no earlier than the last day of the Interest Period in May 2019;
(b) has a notional amount equal to the maximum principal amount of the Loan;
(c) has a strike rate equal to the Strike Price;
(d) is governed by the laws of the State of New York;
(e) is issued by the Counterparty to Borrower and pledged to Lender by Borrower in accordance with the aggregate Assignment of Rate Cap;
(f) has a Counterparty that is obligated to make a stream of payments, directly to the Clearing Account (whether or not an Event of Default has occurred) from time to time equal to the product of (i) the notional amount of which, when taken together, is at least equal to the aggregate Commitments, and shall comply with the terms thereof, and such Interest Rate Cap Agreement multiplied by (ii) assign the excess, if any, of LIBOR (including any upward rounding under the definition of LIBOR) over the Strike Price and shall provide that such payment shall be made on a monthly basis in each case not later than (after giving effect to and assuming the passage of any cure period afforded to the Administrative Agent, for Counterparty under the equal and ratable benefit of the Administrative Agent and Lenders, all of the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment cure period shall terminate upon not in any event be more than three (3) Business Days) each Payment Date; and
(g) does not impose any material obligation on the repayment beneficiary thereof (after payment of the acquisition cost) and is, in all amounts owing under this Agreement; providedmaterial respects, however that satisfactory in form and substance to Lender and satisfies applicable Rating Agency standards and requirements (if a Securitization has occurred), including, without limitation, provisions satisfying Rating Agency standards, requirements and criteria (i) that incorporate representations by the Counterparty that no withholding taxes shall apply to payments by the Counterparty, and provide for “gross up” payments by the Counterparty for any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or withholding tax, (ii) whereby the Counterparty agrees not to file or join in the filing of any Interest Rate Cap Provider fails to make a payment when due petition against Borrower under the applicable Interest Rate CapBankruptcy Code or any other federal or state bankruptcy or insolvency law, and (iii) that incorporate, if the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement contemplates collateral posting by the Counterparty, a credit support annex setting forth the mechanics for collateral to be calculated and posted that are consistent with an Eligible Rating Agencies standards, requirements and criteria. In addition, Borrower shall cause the Counterparty under the Interest Rate Cap Provider, including Agreement to execute and deliver the related Eligible Interest Rate Cap Provider’s acknowledgment Acknowledgment. No later than five (5) days prior to the expiration of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Initial Interest Rate Cap Agreement, Borrower shall deliver an extension of the Initial Interest Rate Cap Agreement or a replacement of the same meeting the requirements of this Section 2.8.1 except that the term shall expire no earlier than the last day of the Interest Period in the calendar month on which the Stated Maturity Date occurs. Failure to deliver such Replacement Interest Rate Cap Agreement(s) shall constitute an automatic Event of Default.
Appears in 1 contract
Samples: Loan Agreement (Lightstone Value Plus Real Estate Investment Trust V, Inc.)
Interest Rate Cap Agreement. If (a) Prior to or contemporaneously with the LIBO Closing Date, Borrower shall enter into an Interest Rate in effect on any date is greater than or Cap Agreement with a LIBOR strike price equal to 3.0%, the Borrower Strike Price. The Interest Rate Cap Agreement shall within thirty (30) days thereafter be governed by the laws of the State of New York and shall contain each of the following provisions:
(i) enter into and maintain in full force and effect one or more Interest Rate Caps, each with an Eligible the notional amount of the Interest Rate Cap Provider Agreement shall be equal to the aggregate Component Outstanding Principal Balances of the Floating Rate Components;
(ii) the remaining term of the Interest Rate Cap Agreement shall at all times extend through the end of the Interest Period in which the Maturity Date occurs, as extended from time to time pursuant to this Agreement and each the Loan Documents;
(iii) the Counterparty under the Interest Rate Cap Agreement shall be obligated to make a stream of which satisfies payments, directly to the Cash Management Account (whether or not an Event of Default has occurred) from time to time equal to the product of (i) the notional amount of such Interest Rate Cap Agreement multiplied by (ii) the excess, if any, of LIBOR (including any upward rounding under the definition of Eligible LIBOR) over the Strike Price and shall provide that such payment shall be made on a monthly basis in each case not later than (after giving effect to and assuming the passage of any cure period afforded to such Counterparty under the Interest Rate Cap Agreement, which cure period shall not in any event be more than three Business Days) each Payment Date; and
(iv) the Interest Rate Cap Agreement shall impose no material obligation on the beneficiary thereof (after payment of the acquisition cost) and shall be in all material respects satisfactory in form and substance to Lender and shall satisfy applicable Rating Agency standards and requirements, including, without limitation, provisions satisfying Approved Rating Agencies standards, requirements and criteria (i) that incorporate customary tax “gross up” provisions, (ii) whereby the Counterparty agrees not to file or join in the filing of any petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, and (iii) that incorporate, if the Interest Rate Cap Agreement contemplates collateral posting by the Counterparty, a credit support annex setting forth the mechanics for collateral to be calculated and posted that are consistent with Rating Agency standards, requirements and criteria.
(b) Borrower shall collaterally assign to Lender, pursuant to the Collateral Assignment of Interest Rate Cap Agreement (the “Collateral Assignment of Interest Rate Cap Agreement”), all of its right, title and interest to receive any and all payments under the Interest Rate Cap Agreement, and shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender and require that the Counterparty deposit any payments directly into the Cash Management Account). Borrower shall notify the Counterparty of such assignment and shall cause the Counterparty under the Interest Rate Cap Agreement to execute and deliver the Acknowledgment.
(c) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(d) In the event that the Borrower receives written notice from Lender, or the Borrower otherwise obtains knowledge, in each case, of any downgrade, withdrawal or qualification of the rating of the Counterparty by any Approved Rating Agency such that it ceases to qualify as an Acceptable Counterparty, unless the Counterparty shall have posted collateral on terms acceptable to each Approved Rating Agency, Borrower shall replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than ten (10) Business Days following receipt of notice from Lender of such downgrade, withdrawal or qualification. In the event that the Counterparty is downgraded (i) below BBB+ by S&P or (ii) below “Baa1” by Moody’s, a Replacement Interest Rate Cap Agreement shall be required regardless of the posting of collateral. Other than as provided in this Section 2.2.7(d), the Counterparty must be an Acceptable Counterparty at all times.
(e) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or fails to maintain the Interest Rate Cap Agreement in accordance with the terms and provisions of this Agreement, Lender may purchase the Interest Rate Cap Agreement and the aggregate notional amount of which, when taken together, is at least equal to the aggregate Commitments, and shall comply with the terms thereof, and (ii) assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenders, all of the Borrower’s right and title to and interest cost incurred by Lender in each Interest Rate Cap, purchasing such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for Agreement shall be paid by Borrower to Lender with interest thereon at the benefit of Default Rate from the Administrative Agent and date such cost was incurred by Lender until such cost is reimbursed by Borrower to Lender.
(f) In connection with the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender an opinion from counsel (which collateral assignment counsel may be in-house counsel for the Counterparty) for the Counterparty (upon which Lender and its successors and assigns may rely) which shall terminate upon the repayment of all amounts owing under this Agreement; providedprovide, however in relevant part, that if (a “Counterparty Opinion”):
(i) any the Counterparty is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation or formation and has the organizational power and authority to execute and deliver, and to perform its obligations under, the Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or Agreement;
(ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, execution and delivery of the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Providerby the Counterparty, including and any other agreement which the related Eligible Interest Rate Cap Provider’s acknowledgment Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property;
(iii) all consents, authorizations and approvals required for the execution and delivery by the Counterparty of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any Governmental Authority is required for such execution, delivery or performance; and
(iv) the Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the Counterparty and constitutes the legal, valid and binding obligation of the Counterparty, enforceable against the Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
Appears in 1 contract
Samples: Loan Agreement (Starwood Waypoint Residential Trust)
Interest Rate Cap Agreement. If (a) At or prior to the LIBO Rate in effect on any date is greater than or equal to 3.0%Closing Date, the Borrower shall within thirty enter into an interest rate cap agreement (30the “Initial Interest Rate Cap Agreement”) days thereafter which shall protect against an increase in interest rates which would cause the Interest Rate to exceed 5.00% per annum, which interest rate cap agreement shall have a term of not less than one year and otherwise comply with the terms of this Section 2.7.
(b) Prior to the expiration of the Initial Interest Rate Cap Agreement and each successive Replacement Interest Rate Cap Agreement thereafter, Borrower shall enter into an interest rate cap agreement which shall protect against an increase in interest rates that would cause the Debt Service Coverage Ratio to be less than 1.40x and otherwise complies with the terms of this Section 2.7. (each a “Replacement Interest Rate Cap Agreement”, and such Initial Interest Rate Cap Agreement or Replacement Interest Rate Cap Agreement each an “Interest Rate Cap Agreement”, and the counterparty to any of the foregoing, a “Counterparty”).
(c) With respect to each and every Interest Rate Cap Agreement, such Interest Rate Cap Agreement (i) enter into shall be in form reasonably acceptable to Lender, (ii) shall be with a Counterparty acceptable to Lender and maintain in full force which Counterparty shall have a credit rating of A2 or better by Xxxxx’x, and effect one A or more Interest Rate Capsbetter by S&P, each with an Eligible (iii) shall direct the Counterparty to deposit any and all payments due under the Interest Rate Cap Provider Agreement directly into an account designated by Lender so long as any portion of the Loan remains outstanding (provided, however, that for purposes of this requirement, the Loan shall be deemed to be remaining outstanding if the Property is transferred to Lender (or its nominee or designee) by judicial foreclosure or non-judicial foreclosure or by deed-in-lieu thereof), (iv) shall have an initial term of not less than one (1) year and each shall be continually renewed during the term of the Loan for periods of not less than one (1) year prior to the then expiration date, and (v) shall have an initial notional amount equal to the principal balance of the Loan at the time the parties enter into such Interest Rate Cap Agreement.
(d) Additionally, Borrower shall collaterally assign to Lender, pursuant to the Collateral Assignment of Interest Rate Cap Agreement, all of its right, title and interest in and to the Interest Rate Cap Agreement (and any replacements thereof), including, without limitation, its right to receive any and all payments under the Interest Rate Cap Agreement (and any replacements thereof), and Borrower shall, and shall cause Counterparty to, deliver to Lender a fully executed Interest Rate Cap Agreement (which satisfies shall, by its terms, authorize the definition assignment to Lender and require that payments be deposited directly into the account designated in writing from time to time by Lender).
(e) Borrower shall comply with all of Eligible its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be deposited immediately into the Lockbox Account. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(f) In the event of any downgrade or qualification of the rating of the Counterparty by Moody’s or S&P such that the rating of the Counterparty is below a long term rating of A3 by Moody’s or below a long term rating of A- by S&P, or if the rating of such Counterparty has been withdrawn by Moody’s or S&P, Borrower shall, not later than ten (10) Business Days following receipt of notice from Lender, either: (i) replace the Interest Rate Cap Agreement with an Interest Rate Cap Agreement in form and substance reasonably satisfactory to Lender (and meeting the requirements set forth in this Section 2.7) from a Counterparty reasonably acceptable to Lender having a credit rating of “A2” or better by Xxxxx’x Investors Service, Inc., and “A” or better by Standard and Poor’s Rating Group, (ii) cause the Counterparty to post collateral for the Interest Rate Cap Agreement in an amount equal to 100% of the xxxx-to-market value of the Interest Rate Cap Agreement pursuant to an ISDA Credit Support Annex (NY Law) with the “Credit Support Amount” defined to be 100% of the Secured Party’s Exposure (as such terms are defined in the ISDA Credit Support Annex (NY Law) as published by the ISDA in 1994, or (iii) cause the Counterparty to provide a guaranty of the Counterparty’s obligations under the Interest Rate Cap Agreement from an entity that has a credit rating of A2 or better by Moody’s and A or better by S&P.
(g) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or fails to maintain the Interest Rate Cap Agreement in accordance with the terms and provisions of this Agreement, then provided that Borrower has not cured such default within ten (10) Business Days after notice from Lender, Lender may purchase the Interest Rate Cap Agreement and the aggregate notional amount of which, when taken together, cost incurred by Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred by Lender until such cost is at least equal reimbursed by Borrower to Lender.
(h) Each Interest Rate Cap Agreement shall contain the following language or its equivalent: In the event that a Counterparty is required pursuant to the aggregate Commitmentsterms of an Interest Rate Cap Agreement to (i) deliver collateral as specified in the applicable Interest Rate Cap Agreement, or (ii) find a replacement Counterparty, Borrower covenants and agrees that Borrower shall seek Lender’s approval with respect thereto and shall not approve or consent to the foregoing unless and until Borrower receives Lender’s prior written approval and shall approve or consent to the foregoing upon receipt of Lender’s prior written approval. Borrower’s failure to comply with the terms thereofrequirements of this Section 2.7(h) shall constitute, and at Lender’s option, an immediate Event of Default.
(iii) assign to the Administrative Agent, for the equal and ratable benefit Within ten (10) Business Days after full execution of the Administrative Agent and Lenders, all of the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender an opinion from counsel (which collateral assignment counsel may be in house counsel for the Counterparty) for the Counterparty (upon which Lender and its successors and assigns may rely) which shall terminate upon the repayment of all amounts owing under this Agreement; providedprovide, however that if in relevant part, that:
(i) the Counterparty is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation and has the organizational power and authority to execute and deliver, and to perform its obligations under, the Interest Rate Cap Agreement;
(ii) the execution and delivery of the Interest Rate Cap Agreement by the Counterparty, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent organizational documents) or any law, regulation or contractual restriction binding on or affecting it or its property;
(iii) all consents, authorizations and approvals required for the execution and delivery by the Counterparty of the Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and
(iv) the Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the Counterparty and constitutes the legal, valid and binding obligation of the Counterparty, enforceable against the Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(j) Proceeds of any and all rights that Borrower may now or hereafter have to any and all payments, disbursements, distributions or proceeds under any Interest Rate Cap Provider ceases to Agreement (“Cap Proceeds”) may be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause such Person to assign its held by Lender as cash collateral for Borrower’s obligations under the related Interest Rate Loan Documents and shall be applied as provided below. If an Event of Default exists, any such Cap Proceeds may be applied by Lender to a new Eligible Interest Rate Cap Provider or the payment of accrued interest, late charges, principal (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Provider, including the related Eligible Interest Rate Cap Provider’s acknowledgment Prepayment Fee, if any, occasioned by a principal payment), or any other obligation arising out of the collateral assignment by the obligations of Borrower to Lender under the Administrative Agent Loan Documents in such manner as Lender in its sole discretion deems appropriate. If no Event of Default exists, proceeds of any such Eligible Interest Rate Cap AgreementProceeds received by Lender shall upon receipt be applied by Lender to interest under the Note, then to any other amounts due and owing under the Loan Documents and any such Cap Proceeds which remain unapplied thereafter shall be returned to Borrower.
Appears in 1 contract
Interest Rate Cap Agreement. If (a) Not later than the LIBO Rate in effect on any date that is fifteen (15) days after the applicable Index is equal to or greater than the applicable Trigger Rate (it being agreed that Borrower shall be responsible for determining for itself when the Index has reached such point, but that any notice from Administrative Agent indicating the same shall be deemed conclusive absent manifest error) Borrower shall obtain an agreement from (or guaranteed by) an Acceptable Counterparty, which agreement (an “Interest Rate Cap Agreement”) shall (i) be in the form and substance satisfactory to Administrative Agent, (ii) contain the agreement of such counterparty to make payments to Borrower in the event the applicable Index exceeds the applicable Strike Rate, (iii) require payments based on a notional amount at least equal to 3.0%the Loan Amount, (iv) not terminate prior to the Scheduled Maturity Date, (v) require payments to be made on the date that is three (3) Business Days prior to the applicable Payment Date, and (vi) contain a one-time right to reallocate notional amounts between the Interest Rate Cap Agreement obtained in connection with the Loan and the Interest Rate Cap Agreement obtained in connection with the Mezzanine Loan at no cost to Administrative Agent or any Lender. Borrower shall within not waive or amend any of the material terms of any such required Interest Rate Cap Agreement.
(b) In the event of any downgrade or withdrawal of the rating of an Acceptable Counterparty below “A-” by S&P or “A3” from Xxxxx’x (or such other lower rating levels as are acceptable to Administrative Agent), or in the event of any default by an Acceptable Counterparty under an Interest Rate Cap Agreement required hereunder, Borrower shall, not later than thirty (30) days thereafter following the receipt by Borrower of notice of such downgrade, withdrawal, or default (i) enter into and maintain in full force and effect one or more Interest Rate Caps, each with an Eligible Interest Rate Cap Provider and each of which satisfies the definition of Eligible Interest Rate Cap Agreement and the aggregate notional amount of which, when taken together, is at least equal to the aggregate Commitments, and shall comply with the terms thereof, and (ii) assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenders, all of the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the whether received from Administrative Agent, the Lenders Acceptable Counterparty, or any otherwise) (or such later period with respect to the following clause (ii) if such Acceptable Counterparty has a longer period of their respective Affiliates, time to perform any of the obligations of the Borrower under an Interest Rate Cap Agreement, which collateral assignment shall terminate upon the repayment of all amounts owing under this Agreement; provided, however that if provide such collateral) either (i) any Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or (ii) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, the Borrower shall within thirty (30) days (x) cause replace such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap ProviderAgreement satisfying the requirements of clause (a) above, including the related Eligible Interest Rate Cap Provider’s acknowledgment of the collateral assignment by the Borrower (ii) provide a guaranty from a guarantor who is an Acceptable Counterparty, or (iii) to the Administrative Agent extent required of such Eligible Acceptable Counterparty in such Interest Rate Cap Agreement, cause the Acceptable Counterparty to deliver cash collateral to secure 100% of the mark-to-market value of Borrower’s exposure under such Interest Rate Cap Agreement; provided, however, notwithstanding the foregoing, if the Acceptable Counterparty ceases to have a long term rating of at least “BBB” or “Baal” by S&P and Moody’s respectively, then Borrower shall replace the Interest Rate Cap Agreement with an Interest Rate Cap Agreement satisfying the requirements in clause (a) above, not later than thirty (30) days following the receipt by Borrower of notice of such downgrade (whether received from Administrative Agent, the Acceptable Counterparty, or otherwise).
(c) Borrower shall collaterally assign any such required Interest Rate Cap Agreement to Administrative Agent, and shall cause the counterparty to such Interest Rate Cap Agreement to consent to such collateral assignment and deliver an opinion of counsel regarding the enforceability of the Interest Rate Cap Agreement, in each case in form and substance reasonably satisfactory to Administrative Agent. LOAN AGREEMENT – Page 50
Appears in 1 contract
Samples: Loan Agreement (Nexpoint Diversified Real Estate Trust)
Interest Rate Cap Agreement. If (a) Only in the LIBO Rate event that the Mortgage Loan has been paid in effect on any date full or Mortgage Borrower is greater than or equal to 3.0%, in violation of its obligations of Section 2.4 of the Mortgage Loan Agreement shall the terms of this Section 2.4 be applicable. Borrower shall within thirty (30) days obtain, or cause to be obtained, and shall thereafter maintain in effect, an Interest Rate Cap Agreement with an Acceptable Counterparty, which shall (i) enter into be coterminous with the Loan and maintain in full force the Mortgage Loan, (ii) have a notional amount which shall not at any time be less than the sum of (A) the outstanding principal balance of the Loan, (B) the outstanding principal balance of the Mortgage Loan, (C) the outstanding principal balance of the Mezzanine A Loan, (D) the outstanding principal balance of the Mezzanine C Loan, (E) the outstanding principal balance of the Mezzanine D Loan, (F) the outstanding principal balance of the Mezzanine E Loan, and effect one or more Interest Rate Caps(G) the Unadvanced Mezzanine E Loan Funds, each with an Eligible and (iii) at all times have a strike rate equal to the Strike Rate. The Counterparty shall be obligated under the Interest Rate Cap Provider Agreement to make monthly payments equal to the excess of one (1) month LIBOR over the Strike Rate, calculated on the notional amount. The notional amount of the Interest Rate Cap Agreement may be reduced from time to time in amounts equal to any prepayment of the principal of the Loan, the Mortgage Loan, the Mezzanine A Loan, the Mezzanine C Loan, the Mezzanine D Loan or the Mezzanine E Loan in accordance with Section 2.3 and each Section 2.5 of which satisfies this Agreement, the definition Mortgage Loan Agreement, the Mezzanine A Loan Agreement, the Mezzanine C Loan Agreement, the Mezzanine D Loan Agreement or the Mezzanine E Loan Agreement, as applicable.
(b) Borrower shall collaterally assign to Lender pursuant to an Assignment of Eligible Interest Rate Cap Agreement substantially in the form annexed hereto as Exhibit V, all of its right, title and interest under the Interest Rate Cap Agreement (and any related guarantee, if any) (i) to any and all payments, and (ii) to any and all collateral posted by the Counterparty pursuant to the Interest Rate Cap Agreement. Borrower shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement and notify the Counterparty of such collateral assignment (either in such Interest Rate Cap Agreement or by separate instrument). The Counterparty shall agree in writing to make all payments it is required to make under the Interest Rate Cap Agreement directly to an account specified by Lender. At such time as the Loan is repaid in full, all of Lender’s right, title and interest in the Interest Rate Cap Agreement shall terminate and Lender shall promptly execute and deliver at Borrower’s sole cost and expense, such documents as may be required to evidence Lender’s release of Lender’s security interest in the Interest Rate Cap Agreement and to notify the Counterparty of such release.
(c) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Counterparty (or its credit support provider, if applicable) under the Interest Rate Cap Agreement shall be deposited immediately into an account specified by Lender. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(d) In the event of any downgrade, withdrawal or qualification of the rating of the Counterparty below the First Trigger Ratings with respect to any of the Rating Agencies, the Counterparty shall post collateral pursuant to the Interest Rate Cap Agreement within ten (10) Business Days following such downgrade, withdrawal or qualification.
(e) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or any Replacement Interest Cap Agreement as and when required hereunder, Lender may purchase such Interest Rate Cap Agreement and the aggregate notional amount cost incurred by Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred by Lender until such cost is paid by Borrower to Lender.
(f) Each Interest Rate Cap Agreement shall expressly provide that in the event of whichany downgrade, when taken togetherwithdrawal or qualification of the rating of the Counterparty (or its credit support provider, is if applicable) below the Second Trigger Ratings with respect to any of the Rating Agencies, the Counterparty shall, while posting collateral pursuant to the Interest Rate Cap Agreement, either (i) transfer the Interest Rate Cap Agreement to a replacement Acceptable Counterparty, or (ii) procure a guarantee from an entity whose credit ratings from the Rating Agencies are at least equal to the aggregate CommitmentsFirst Trigger Ratings, and shall comply with the terms thereofwithin thirty (30) calendar days following such downgrade, and (ii) assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenderswithdrawal or qualification, all of as set forth in the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under Agreement.
(g) In connection with an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender an opinion of counsel from counsel for the Counterparty (upon which collateral assignment Lender and its successors and assigns may rely) which shall terminate upon provide, in relevant part, that:
(1) the repayment Counterparty is duly organized, validly existing, and in good standing under the laws of all amounts owing under this Agreement; providedits jurisdiction of incorporation and has the organizational power and authority to execute and deliver, however that if (i) any and to perform its obligations under, the Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or Agreement;
(ii2) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, execution and delivery of the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Providerby the Counterparty, including and any other agreement which the related Eligible Interest Rate Cap Provider’s acknowledgment Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent Organizational Documents) or any law, regulation or contractual restriction binding on or affecting it or its property;
(3) all consents, authorizations and approvals required for the execution and delivery by the Counterparty of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and
(4) the Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the Counterparty and constitutes the legal, valid and binding obligation of the Counterparty, enforceable against the Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
Appears in 1 contract
Samples: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Interest Rate Cap Agreement. If (a) Only in the LIBO Rate event that the Mortgage Loan has been paid in effect on any date full or Mortgage Borrower is greater than or equal to 3.0%, in violation of its obligations of Section 2.4 of the Mortgage Loan Agreement shall the terms of this Section 2.4 be applicable. Borrower shall within thirty (30) days obtain, or cause to be obtained, and shall thereafter maintain in effect, an Interest Rate Cap Agreement with an Acceptable Counterparty, which shall (i) enter into be coterminous with the Loan and maintain in full force the Mortgage Loan, (ii) have a notional amount which shall not at any time be less than the sum of (A) the outstanding principal balance of the Loan, (B) the outstanding principal balance of the Mortgage Loan, (C) the outstanding principal balance of the Mezzanine B Loan, (D) the outstanding principal balance of the Mezzanine C Loan, (E) the outstanding principal balance of the Mezzanine D Loan, (F) the outstanding principal balance of the Mezzanine E Loan, and effect one or more Interest Rate Caps(G) the Unadvanced Mezzanine E Loan Funds, each with an Eligible and (iii) at all times have a strike rate equal to the Strike Rate. The Counterparty shall be obligated under the Interest Rate Cap Provider Agreement to make monthly payments equal to the excess of one (1) month LIBOR over the Strike Rate, calculated on the notional amount. The notional amount of the Interest Rate Cap Agreement may be reduced from time to time in amounts equal to any prepayment of the principal of the Loan, the Mortgage Loan, the Mezzanine B Loan, the Mezzanine C Loan, the Mezzanine D Loan or the Mezzanine E Loan in accordance with Section 2.3 and each Section 2.5 of which satisfies this Agreement, the definition Mortgage Loan Agreement, the Mezzanine B Loan Agreement, the Mezzanine C Loan Agreement, the Mezzanine D Loan Agreement or the Mezzanine E Loan Agreement, as applicable.
(b) Borrower shall collaterally assign to Lender pursuant to an Assignment of Eligible Interest Rate Cap Agreement substantially in the form annexed hereto as Exhibit V, all of its right, title and interest under the Interest Rate Cap Agreement (and any related guarantee, if any) (i) to any and all payments, and (ii) to any and all collateral posted by the Counterparty pursuant to the Interest Rate Cap Agreement. Borrower shall deliver to Lender an executed counterpart of such Interest Rate Cap Agreement and notify the Counterparty of such collateral assignment (either in such Interest Rate Cap Agreement or by separate instrument). The Counterparty shall agree in writing to make all payments it is required to make under the Interest Rate Cap Agreement directly to an account specified by Lender. At such time as the Loan is repaid in full, all of Lender’s right, title and interest in the Interest Rate Cap Agreement shall terminate and Lender shall promptly execute and deliver at Borrower’s sole cost and expense, such documents as may be required to evidence Lender’s release of Lender’s security interest in the Interest Rate Cap Agreement and to notify the Counterparty of such release.
(c) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Counterparty (or its credit support provider, if applicable) under the Interest Rate Cap Agreement shall be deposited immediately into an account specified by Lender. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder.
(d) In the event of any downgrade, withdrawal or qualification of the rating of the Counterparty below the First Trigger Ratings with respect to any of the Rating Agencies, the Counterparty shall post collateral pursuant to the Interest Rate Cap Agreement within ten (10) Business Days following such downgrade, withdrawal or qualification.
(e) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or any Replacement Interest Cap Agreement as and when required hereunder, Lender may purchase such Interest Rate Cap Agreement and the aggregate notional amount cost incurred by Lender in purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest thereon at the Default Rate from the date such cost was incurred by Lender until such cost is paid by Borrower to Lender.
(f) Each Interest Rate Cap Agreement shall expressly provide that in the event of whichany downgrade, when taken togetherwithdrawal or qualification of the rating of the Counterparty (or its credit support provider, is if applicable) below the Second Trigger Ratings with respect to any of the Rating Agencies, the Counterparty shall, while posting collateral pursuant to the Interest Rate Cap Agreement, either (i) transfer the Interest Rate Cap Agreement to a replacement Acceptable Counterparty, or (ii) procure a guarantee from an entity whose credit ratings from the Rating Agencies are at least equal to the aggregate CommitmentsFirst Trigger Ratings, and shall comply with the terms thereofwithin thirty (30) calendar days following such downgrade, and (ii) assign to the Administrative Agent, for the equal and ratable benefit of the Administrative Agent and Lenderswithdrawal or qualification, all of as set forth in the Borrower’s right and title to and interest in each Interest Rate Cap, such that the Administrative Agent shall have the right to enforce the Borrower’s rights and remedies under each Interest Rate Cap for the benefit of the Administrative Agent and the Lenders, but without any obligation on the part of the Administrative Agent, the Lenders or any of their respective Affiliates, to perform any of the obligations of the Borrower under Agreement.
(g) In connection with an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender an opinion of counsel from counsel for the Counterparty (upon which collateral assignment Lender and its successors and assigns may rely) which shall terminate upon provide, in relevant part, that:
(1) the repayment Counterparty is duly organized, validly existing, and in good standing under the laws of all amounts owing under this Agreement; providedits jurisdiction of incorporation and has the organizational power and authority to execute and deliver, however that if (i) any and to perform its obligations under, the Interest Rate Cap Provider ceases to be an Eligible Interest Rate Cap Provider or Agreement;
(ii2) any Interest Rate Cap Provider fails to make a payment when due under the applicable Interest Rate Cap, execution and delivery of the Borrower shall within thirty (30) days (x) cause such Person to assign its obligations under the related Interest Rate Cap to a new Eligible Interest Rate Cap Provider or (y) obtain a substitute Eligible Interest Rate Cap Agreement with an Eligible Interest Rate Cap Providerby the Counterparty, including and any other agreement which the related Eligible Interest Rate Cap Provider’s acknowledgment Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been and remain duly authorized by all necessary action and do not contravene any provision of its certificate of incorporation or by-laws (or equivalent Organizational Documents) or any law, regulation or contractual restriction binding on or affecting it or its property;
(3) all consents, authorizations and approvals required for the execution and delivery by the Counterparty of the collateral assignment by the Borrower to the Administrative Agent of such Eligible Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, and the performance of its obligations thereunder have been obtained and remain in full force and effect, all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with any governmental authority or regulatory body is required for such execution, delivery or performance; and
(4) the Interest Rate Cap Agreement, and any other agreement which the Counterparty has executed and delivered pursuant thereto, has been duly executed and delivered by the Counterparty and constitutes the legal, valid and binding obligation of the Counterparty, enforceable against the Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
Appears in 1 contract
Samples: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
