Interest Rate Cap Agreement. (A) Prior to or contemporaneously with the Closing Date, Borrower shall enter into an Interest Rate Cap Agreement with a strike price no greater than the Strike Price. The Interest Rate Cap Agreement (i) shall at all times be in a form and substance reasonably acceptable to Lender with respect to such matters not otherwise set forth in this Agreement, (ii) shall at all times be with an Acceptable Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap Agreement, (iv) shall be for a term through the end of the Interest Period associated with the then-applicable Maturity Date of the Loan and (v) shall at all times have a notional amount equal to or greater than the then outstanding 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 Assignment of Cap, 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 payments be deposited directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender). (B) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be directly deposited immediately into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender. Borrower shall take all commercially reasonable actions requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s rights thereunder. (C) In the event of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by any Rating Agency such that it is no longer an Acceptable Counterparty, Borrower shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than the period of time provided for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within ten (10) Business Days of such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender. (D) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). 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 cost actually 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. (E) In connection with the Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as 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 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 Agreement; (ii) 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 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 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). (F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then: (i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and (ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension Term. (G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Strategic Storage Trust II, Inc.)
Interest Rate Cap Agreement. (Aa) Prior to or contemporaneously with Within five (5) Business Days of the Closing Date, Borrower shall enter into obtain, or cause to be obtained, and shall thereafter maintain in effect, an Interest Rate Cap Agreement with a strike price no greater than the Strike Price. The Interest Rate Cap Agreement an Acceptable Counterparty, which shall (i) shall at all times be in a form and substance reasonably acceptable to Lender coterminous with respect to such matters not otherwise set forth in this Agreementthe Loan, (ii) have a notional amount which shall not at all times any time be with an Acceptable Counterpartyless than the sum of (A) the outstanding principal balance of the Loan, (B) the outstanding principal balance of the Mezzanine A Loan, and (C) the Unadvanced Mezzanine A Loan Funds, and (iii) shall direct such Acceptable Counterparty to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap Agreement, (iv) shall be for a term through the end of the Interest Period associated with the then-applicable Maturity Date of the Loan and (v) shall at all times have a strike rate equal to the Strike Rate. The Counterparty shall be obligated under the Interest Rate Cap 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 or greater than any prepayment of the then outstanding principal balance of the Loan or the Mezzanine A Loan in accordance with Section 2.3 and shall at all times provide for Section 2.5 of this Agreement or the applicable Strike Price. Mezzanine A Loan Agreement, as applicable.
(b) Borrower shall collaterally assign to Lender, Lender pursuant to the Assignment of Cap, Interest Rate Cap Agreement all of its right, title and interest to receive any and all payments under the Interest Rate Cap AgreementAgreement (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 (which shalleither 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 its termsLender. At such time as the Loan is repaid in full, authorize the assignment to Lender all of Lender’s right, title and require that payments be deposited directly into the account designated interest in the Assignment 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 and, during Agreement and to notify the continuance Counterparty of an Event of Default, as directed by Lender)such release.
(Bc) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty (or its credit support provider, if applicable) under the Interest Rate Cap Agreement to Borrower or Lender shall be directly deposited immediately into the Lockbox Account or if the Lockbox Account is not then required to be in effect, into such account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed specified by Lender. Borrower shall take all commercially reasonable actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s its rights thereunder.
(Cd) In the event of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by below the First Trigger Ratings with respect to any of the Rating Agency such that it is no longer an Acceptable CounterpartyAgencies, Borrower the Counterparty shall replace or cause the cap provider post collateral pursuant to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than the period of time provided for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within ten (10) Business Days of following such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender.
(De) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or fails to maintain the any Replacement Interest Rate Cap Agreement in accordance with the terms as and provisions of this Agreementwhen required hereunder, Lender may purchase the such Interest Rate Cap Agreement and the cost actually 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 paid by Borrower to Lender.
(Ef) Each Interest Rate Cap Agreement shall expressly provide that in the event of any downgrade, withdrawal or qualification of the rating of the Counterparty (or its credit support provider, 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 First Trigger Ratings, within thirty (30) calendar days following such downgrade, withdrawal or qualification, all as set forth in the Interest Rate Cap Agreement.
(g) In connection with the an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as applicable, an opinion of counsel 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:
(i1) the Acceptable 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 Agreement;
(ii2) 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;
(iii3) 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 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
(iv4) the 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).
(F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Sources: Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Interest Rate Cap Agreement. (Aa) Prior to or contemporaneously with the Closing Date, Borrower Interest Rate Cap Party shall enter into an Interest Rate Cap Agreement with a SOFR strike price no greater than rate equal to the Strike PriceRate. The Interest Rate Cap Agreement (i) shall at all times be in a form and substance reasonably acceptable to Lender with respect to such matters not otherwise set forth in this AgreementLender, (ii) shall at all times be with an Acceptable a Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap Agreement, (iv) shall at all times be for a term through duration at least equal to the end of the Interest Accrual Period associated with in which the then-applicable then current Stated Maturity Date of the Loan occurs, and (viv) shall at all times have a notional amount equal to or greater than the then outstanding principal balance of the Loan and shall at all times provide for a strike rate to be equal to the applicable Strike PriceRate. Borrower Interest Rate Cap Party shall direct such Counterparty to deposit as directed by L▇▇▇▇▇, any amounts due Borrower Interest Rate Cap Party under such Interest Rate Cap Agreement so long as any portion of the Debt is outstanding, provided that the Debt 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, Borrower Interest Rate Cap Party shall collaterally assign to Lender, pursuant to the Collateral Assignment of CapInterest 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 AgreementAgreement (and any replacements thereof), and Borrower shall, and shall cause Counterparty to, deliver to Lender an a fully executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender and require that payments be deposited directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by LenderL▇▇▇▇▇).
(B) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be directly deposited immediately into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender. Borrower shall take all commercially reasonable actions requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s rights thereunder.
(C) In the event of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by any Rating Agency such that it is no longer an Acceptable Counterparty, Borrower shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than the period of time provided for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within ten (10) Business Days of such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender.
(D) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). 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 cost actually 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.
(E) In connection with the Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as 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 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 Agreement;
(ii) 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 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 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).
(F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Industrial Logistics Properties Trust)
Interest Rate Cap Agreement. (Aa) Prior to or contemporaneously with If at any time during the Closing Dateterm of the Loan the net operating income of the Property, Borrower 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 with which shall protect against an increase in interest rates which would cause the Annual Interest Rate to exceed a strike price no greater than the Strike Price. rate to be determined by Beneficiary in its sole discretion.
(b) The Interest Rate Cap Agreement (i) shall at all times be in a form and substance reasonably acceptable to Lender with respect to such matters not otherwise set forth in this AgreementBeneficiary, (ii) shall at all times be with an Acceptable Counterpartya counterparty acceptable to Beneficiary and which counterparty shall have a credit rating of “A2” or better by M▇▇▇▇’▇ Investors Service, Inc., and “A” or better by Standard and Poor’s Rating Group, (iii) shall direct such Acceptable Counterparty acceptable counterparty to deposit directly into any and all payments due under the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap AgreementAgreement directly into an account designated by Beneficiary (“Designated Account”) so long as any portion of the Loan remains outstanding, any amounts due Borrower under such Interest Rate Cap Agreementprovided 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 be for a have an initial term through of one year, and thereafter (A) if the end 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 Period associated with Rate Cap Agreement then in effect shall be extended for successive one year terms for as long as the then-applicable Maturity Date net operating income of the Loan 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 at all times have a an initial notional amount equal to or greater than the then outstanding unpaid principal balance of the Loan and shall at all times provide for the applicable Strike Price. Borrower Loan.
(c) Trustor shall collaterally assign to Lender, pursuant to the Assignment of Cap, Beneficiary all of its right, title and interest to receive any and all payments under the Interest Rate Cap Agreement, and shall deliver to Lender Beneficiary an executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender and require that payments be deposited directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender).
(B) Borrower Agreement. Trustor shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty counterparty under the Interest Rate Cap Agreement to Borrower Trustor or Lender Beneficiary shall be directly deposited immediately into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by LenderDesignated Account. Borrower Trustor shall take all commercially reasonable actions requested reasonably required by Lender Beneficiary to enforce LenderBeneficiary’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty counterparty and shall not waive, amend or otherwise modify any of Borrower’s its rights thereunder.
(Cd) In the event of any a downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty counterparty by any Rating Agency such that it is no longer an Acceptable CounterpartyM▇▇▇▇’▇ Investors Service, Borrower Inc., or by Standard & Poor’s Ratings Group below the ratings described in Section 2.9(b), at Beneficiary’s option, Trustor shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than the period of time provided for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the replacement Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within counterparty acceptable to Beneficiary not later than ten (10) Business Days business days following receipt of notice from Beneficiary of such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender.
(De) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). In the event that Borrower Trustor fails to purchase and purchase, deliver to Lender and/or maintain the Interest Rate Cap Agreement or fails to maintain the Interest Rate Cap Agreement in accordance with 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 provisions of this Agreement, Lender may remedies under the Loan Documents) purchase the Interest Rate Cap Agreement and the cost actually incurred by Lender in purchasing 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 Borrower to Lender Trustor with interest thereon at the Default Rate from the date such cost was incurred by Lender Beneficiary until such cost is reimbursed paid by Borrower Trustor to LenderBeneficiary.
(Ef) In connection with the Interest Rate Cap Agreement, Borrower shall obtain If and deliver to Lender within twenty (20) Business Days following (x) the date upon which when an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) 2.9(a), Trustor shall obtain and deliver to Beneficiary, prior to or (y) concurrent with its delivery of the first day executed counterpart of any applicable Extension Term, as applicablethe Interest Rate Cap Agreement, an opinion from counsel (which counsel may be in-house of counsel for the Acceptable Counterparty) for the Acceptable Counterparty counterparty (upon which Lender Beneficiary and its successors and assigns may rely) which shall providein form, in relevant partscope and substance acceptable to Beneficiary regarding the authorization of the counterparty, that:
(i) the Acceptable Counterparty is duly organizedlegality, validly existingvalidity, 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 Agreement;
(ii) 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 effect of the Interest Rate Cap Agreement, and any such 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; andmatters as Beneficiary shall reasonably require.
(ivg) The obligation to purchase and maintain the Interest Rate Cap Agreement, Agreement and any other agreement which replacement thereof shall be fully recourse to Trustor and 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)Liable Party.
(F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Sources: Deed of Trust, Security Agreement and Fixture Filing (Strategic Hotels & Resorts, Inc)
Interest Rate Cap Agreement. (Aa) Prior to or contemporaneously with the Closing Date, Borrower Interest Rate Cap Party shall enter into an Interest Rate Cap Agreement with a SOFR strike price no greater than rate equal to the Strike PriceRate. The Interest Rate Cap Agreement (i) shall at all times be in a form and substance reasonably acceptable to Lender with respect to such matters not otherwise set forth in this AgreementAdministrative Agent, (ii) shall at all times be with an Acceptable a Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap Agreement, (iv) shall at all times be for a term through duration at least equal to the end of the Interest Accrual Period associated with in which the then-applicable then current Stated Maturity Date of the Loan occurs, and (viv) shall at all times have a notional amount equal to or greater than the then outstanding principal balance of the Loan and shall at all times provide for a strike rate to be equal to the applicable Strike PriceRate. Borrower Interest Rate Cap Party shall direct such Counterparty to deposit directly into the Restricted Account, or from and after an Event of Default, as directed by Administrative Agent, any amounts due Borrower Interest Rate Cap Party under such Interest Rate Cap Agreement so long as any portion of the Debt is outstanding, provided that the Debt shall be deemed to be outstanding if the Property is transferred by judicial or non-judicial foreclosure or deed in lieu thereof unless the Loan was paid in full. Additionally, Borrower Interest Rate Cap Party shall collaterally assign to LenderAdministrative Agent, pursuant to the Collateral Assignment of CapInterest 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 AgreementAgreement (and any replacements thereof), and Borrower shall, and shall cause Counterparty to, deliver to Lender an Administrative Agent a fully executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender Administrative Agent and require that payments be deposited directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by LenderRestricted Account).
(Bb) Borrower Interest Rate Cap Party shall comply with all of its material obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower Interest Rate Cap Party or Lender Administrative Agent shall be directly deposited immediately and directly into the account designated in the Assignment of Cap andRestricted Account, during the continuance of or from and after an Event of Default, as directed by LenderAdministrative Agent. Borrower Interest Rate Cap Party shall take all commercially reasonable actions reasonably requested by Lender Administrative Agent to enforce Administrative Agent’s or any Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s its rights thereunder.
(Cc) In the event of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by any Rating Agency such that it is no longer an Acceptable Counterpartybelow the Minimum Counterparty Rating, Borrower shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement Party shall replace the Interest Rate Cap Agreement not later than the period ten (10) Business Days following receipt of time provided for in such Interest Rate Cap Agreement following notice of such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the with an Interest Rate Cap Agreement with in form and substance reasonably satisfactory to Lender (and meeting the requirements set forth in this Section 2.8) (a “Replacement Interest Rate Cap Agreement so long as within ten Agreement”) from a Counterparty reasonably acceptable to Administrative Agent having a Minimum Counterparty Rating.
(10d) Business Days Borrower Interest Rate Cap Party shall deliver to Administrative Agent a new Collateral Assignment of such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender.
(D) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender Administrative Agent in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender)Agreement. In the event that Borrower Interest Rate Cap Party fails to purchase and deliver to Lender Administrative Agent 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 Administrative Agent may purchase the Interest Rate Cap Agreement and the cost actually incurred by Lender Administrative Agent in purchasing such Interest Rate Cap Agreement shall be paid by Borrower to Lender Administrative Agent with interest thereon at the Default Rate from the date such cost was incurred by Lender Administrative Agent until such cost is reimbursed by Borrower to LenderAdministrative Agent.
(Ee) Each Interest Rate Cap Agreement shall contain the following language or its equivalent: “In connection the event of any downgrade, withdrawal or qualification of the rating of the Counterparty below (i) a long term rating of “A-” by S&P or (ii) a long term rating of “A3” by Moody’s, the Counterparty must, within ten (10) business days, find a replacement Counterparty, at the Counterparty’s sole cost and expense, acceptable to each Rating Agency and Borrower Interest Rate Cap Party; provided that, notwithstanding such a downgrade, withdrawal or qualification, unless and until the Counterparty transfers the Interest Rate Cap Agreement to a replacement Counterparty, 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 ISDA Master Agreement, with the Counterparty as the “Affected Party.”” In the event that a Counterparty is required pursuant to the terms of an Interest Rate Cap Agreement to find a replacement Counterparty, Borrower covenants and agrees that Borrower shall seek Administrative Agent’s approval with respect thereto and shall not approve or consent to the foregoing unless and until Borrower receives Administrative Agent’s prior written approval and shall approve or consent to the foregoing upon receipt of Administrative Agent’s prior written approval.
(f) With respect to each Interest Rate Cap Agreement, Borrower Interest Rate Cap Party shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as applicable, Administrative Agent an opinion from counsel (which counsel may be in-in house counsel for the Acceptable Counterparty) for the Acceptable Counterparty (upon which Administrative Agent, Lender and its their respective successors and assigns may rely) which shall provide, in relevant part, that:
(i) the Acceptable 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 Agreement;
(ii) 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 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 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).
(F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Sources: Loan Agreement (Industrial Logistics Properties Trust)
Interest Rate Cap Agreement. (Aa) Prior to or contemporaneously with the Closing Date, Borrower Interest Rate Cap Party shall enter into an Interest Rate Cap Agreement with a SOFR strike price no greater than rate equal to the Strike PriceRate. The Interest Rate Cap Agreement (i) shall at all times be in a form and substance reasonably acceptable to Lender with respect to such matters not otherwise set forth in this AgreementLender, (ii) shall at all times be with an Acceptable a Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap Agreement, (iv) shall at all times be for a term through duration at least equal to the end of the Interest Accrual Period associated with in which the then-applicable then current Stated Maturity Date of the Loan occurs, and (viv) shall at all times have a notional amount equal to or greater than the then outstanding principal balance of the Loan and shall at all times provide for a strike rate to be equal to the applicable Strike PriceRate. Borrower Interest Rate Cap Party shall direct such Counterparty to deposit directly into the Restricted Account, or from and after an Event of Default, as directed by L▇▇▇▇▇, any amounts due Borrower Interest Rate Cap Party under such Interest Rate Cap Agreement so long as any portion of the Debt is outstanding, provided that the Debt 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, Borrower Interest Rate Cap Party shall collaterally assign to Lender, pursuant to the Collateral Assignment of CapInterest 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 AgreementAgreement (and any replacements thereof), and Borrower shall, and shall cause Counterparty to, deliver to Lender an a fully executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender and require that payments be deposited directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by LenderL▇▇▇▇▇).
(B) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be directly deposited immediately into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender. Borrower shall take all commercially reasonable actions requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s rights thereunder.
(C) In the event of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by any Rating Agency such that it is no longer an Acceptable Counterparty, Borrower shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than the period of time provided for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within ten (10) Business Days of such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender.
(D) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). 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 cost actually 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.
(E) In connection with the Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as 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 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 Agreement;
(ii) 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 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 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).
(F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Industrial Logistics Properties Trust)
Interest Rate Cap Agreement. (Aa) Prior On or prior to or contemporaneously with the Closing Date, Borrower shall enter into an agreement with (or guaranteed by) an Acceptable Counterparty, which agreement (an “Interest Rate Cap Agreement with a strike price no greater than the Strike Price. The Interest Rate Cap Agreement Agreement”) shall (i) shall at all times be in a form and substance reasonably acceptable satisfactory to Lender with respect to such matters not otherwise set forth in this AgreementLender, (ii) shall at all times be with an contain the agreement of such Acceptable CounterpartyCounterparty 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) shall direct such Acceptable Counterparty require payments based on a notional amount at least equal to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap AgreementLoan Amount, (iv) shall be for a term through not terminate prior to the end of date that is twenty-four (24) months following the Interest Period associated with the then-applicable Maturity Date of the Loan Closing Date, and (v) shall at all times have a notional amount equal require payments to or greater than be made on the then outstanding principal balance of the Loan and shall at all times provide for date that is three (3) Business Days prior to the applicable Strike PricePayment Date. Borrower shall collaterally assign to Lender, pursuant to an assignment agreement in form and substance acceptable to Lender (the “Assignment of CapInterest Rate Cap Agreement”), all of its right, title and interest (but not its obligations) to receive any and all payments under the 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 in the Assignment of Cap and, during the continuance of an Event of Default, as directed 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.
(Bb) 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. All amounts paid by the Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be directly deposited immediately into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender. Borrower shall take all commercially reasonable actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the an Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s its rights thereunder.
(Cd) 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 any Rating Agency Borrower of notice of such that it is no longer an downgrade, withdrawal, qualification, or default (whether received from Lender, the Acceptable Counterparty, or otherwise), then Borrower shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement an Interest Rate Cap Agreement satisfying the requirements of Section 2.2.7(a) above not later than fifteen (15) days following the period receipt by Borrower of time provided for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within ten (10) Business Days notice of such downgrade, withdrawal or qualificationdowngrade (whether received from Lender, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and LenderCounterparty, or otherwise).
(De) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). 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 Agreement, in each case, in accordance with the terms and provisions of this Agreement, Lender may (but shall have no obligation to) purchase the Interest Rate Cap Agreement and the cost actually 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.
(Ef) In connection with the Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender Lender, within twenty (20) Business Days following the Closing Date (x) the date upon which an or, with respect to a Replacement Interest Rate Cap Agreement is required pursuant to Section 2.7(Aor Substitute Interest Rate Cap Agreement, within twenty (20) Business Days following the effective date of such Replacement Interest Rate Cap Agreement or (y) the first day of any applicable Extension TermSubstitute Interest Rate Cap Agreement, as 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 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 Agreement;
; (ii) 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;or
(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 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 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).
(Fg) Notwithstanding anything to the contrary contained in this Section 2.7 2.2.7 or elsewhere in this Agreement, if, at any time, in the Loan is converted from event a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”)Conversion occurs, then:
, within ten (i10) within thirty (30) days Business Days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, into a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (iSection 2.2.7(g), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement), together with, within five (5) or (B) cause 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 Assignment of Interest Rate Cap Agreement delivered in connection with the then-existing Interest Rate Cap Agreement 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 determination will be modified such based on market customs and/or proposals of industry associations) that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has is not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof)then generally commercially available from an Acceptable Counterparty, in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Termthen, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent not be required to the effectiveness of obtain a Substitute Interest Rate Cap Agreement on or prior 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 first day of interest rate, which such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” alternative shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned be satisfactory to Lender pursuant to this Agreement and shall contain each of the following:in its reasonable discretion. SECTION
Appears in 1 contract
Interest Rate Cap Agreement. (Aa) Prior to or contemporaneously with the Closing Date, Borrower Interest Rate Cap Party shall enter into an Interest Rate Cap Agreement with a SOFR strike price no greater than rate equal to the Strike PriceRate. The Interest Rate Cap Agreement (i) shall at all times be in a form and substance reasonably acceptable to Lender with respect to such matters not otherwise set forth in this AgreementLender, (ii) shall at all times be with an Acceptable a Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap Agreement, (iv) shall at all times be for a term through duration at least equal to the end of the Interest Accrual Period associated with in which the then-applicable then current Stated Maturity Date of the Loan occurs, and (viv) shall at all times have a notional amount equal to or greater than the then outstanding principal balance of the Loan and shall at all times provide for a strike rate to be equal to the applicable Strike PriceRate. Borrower Interest Rate Cap Party shall direct such Counterparty to deposit directly into the Restricted Account, or from and after an Event of Default, as directed by Len▇▇▇, ▇ny amounts due Borrower Interest Rate Cap Party under such Interest Rate Cap Agreement so long as any portion of the Debt is outstanding, provided that the Debt shall be deemed to be outstanding if the Property is transferred by judicial or non-judicial foreclosure or deed in lieu thereof unless the Loan was paid in full. Additionally, Borrower Interest Rate Cap Party shall collaterally assign to Lender, pursuant to the Collateral Assignment of CapInterest 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 AgreementAgreement (and any replacements thereof), and Borrower shall, and shall cause Counterparty to, deliver to Lender an a fully executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender and require that payments be deposited directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by LenderRestricted Account).
(Bb) Borrower Interest Rate Cap Party shall comply with all of its material obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower Interest Rate Cap Party or Lender shall be directly deposited immediately and directly into the account designated in the Assignment of Cap andRestricted Account, during the continuance of or from and after an Event of Default, as directed by LenderLen▇▇▇. Borrower ▇orrower Interest Rate Cap Party shall take all commercially reasonable actions reasonably requested by Lender to Len▇▇▇ ▇▇ enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s its rights thereunder.
(Cc) In the event of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by any Rating Agency such that it is no longer an Acceptable Counterpartybelow the Minimum Counterparty Rating, Borrower shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement Party shall replace the Interest Rate Cap Agreement not later than the period ten (10) Business Days following receipt of time provided for in such Interest Rate Cap Agreement following notice of such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the with an Interest Rate Cap Agreement in form and substance reasonably satisfactory to Lender (and meeting the requirements set forth in this Section 2.8) (a “Replacement Interest Rate Cap Agreement”) from a Counterparty reasonably acceptable to Lender having a Minimum Counterparty Rating, provided that qualification of the rating by any Rating Agency with respect to W▇▇▇▇ Fargo Bank, N.A. as Counterparty shall not require a Replacement Interest Rate Cap Agreement so long as within ten Agreement.
(10d) Business Days of such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Borrower Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender.
(D) Borrower Party shall deliver to Lender a new Collateral Assignment of Interest Rate Cap Agreement acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender)Agreement. In the event that Borrower Interest Rate Cap Party 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 cost actually 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.
(Ee) Each Interest Rate Cap Agreement shall contain the following language or its equivalent: “In connection the event of any downgrade, withdrawal or qualification of the rating of the Counterparty below (i) if any of the Securities or any class thereof in any Securitization is rated by S&P, a long term rating of “A-” by S&P, or (ii) if any of the Securities or any class thereof in any Securitization is rated by Moody’s, a long term rating of “A3” by Moody’s, the Counterparty must, within ten (10) business days, find a replacement Counterparty, at the Counterparty’s sole cost and expense, acceptable to each Rating Agency and Borrower Interest Rate Cap Party; provided that, notwithstanding such a downgrade, withdrawal or qualification, unless and until the Counterparty transfers the Interest Rate Cap Agreement to a replacement Counterparty, the Counterparty will continue to perform its obligations under the Interest Rate Cap Agreement provided further that each Interest Rate Cap Agreement with W▇▇▇▇ Fargo Bank, N.A. as Counterparty shall not require a replacement Counterparty solely as a result of qualification of its rating by any Rating Agency. Failure to satisfy the foregoing shall constitute an “Additional Termination Event” as defined by Section 5(b)(v) of the ISDA Master Agreement, with the Counterparty as the “Affected Party.”” In the event that a Counterparty is required pursuant to the terms of an Interest Rate Cap Agreement to find a replacement Counterparty, Borrower covenants and agrees that Borrower shall seek Len▇▇▇’▇ approval with respect thereto and shall not approve or consent to the foregoing unless and until Bor▇▇▇▇▇ ▇▇ceives Len▇▇▇’▇ prior written approval and shall approve or consent to the foregoing upon receipt of Len▇▇▇’▇ prior written approval.
(f) With respect to each Interest Rate Cap Agreement, Borrower Interest Rate Cap Party shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as applicable, an opinion from counsel (which counsel may be in-in house counsel for the Acceptable Counterparty) for the Acceptable Counterparty (upon which Lender and Len▇▇▇ ▇▇d its successors and assigns may rely) which shall provide, in relevant part, that:
(i) the Acceptable 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 Agreement;
(ii) 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 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 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).
(Fg) Reserved.
(h) Notwithstanding anything to the contrary contained in this Section 2.7 2.8 or elsewhere in this Agreement, if, at any time, Lender converts the Loan is converted from (I) a Floating Interest Rate SOFR Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime (II) an Alternate Rate Loan to an Alternate Rate Loan based on a different Benchmark Replacement, each in accordance with Section 2.2(D) 2.5 above (each, a an “Index Rate Conversion”), then:
(i) within thirty (30) days after such Index Rate Conversion, Borrower Interest Rate Cap Party shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower Interest Rate Cap Party taking all the actions described in this clause (i), Borrower Interest Rate Cap Party shall have the right to terminate any then-existing Interest Rate Cap Agreement) or ), provided that if interest rate protection agreements with respect to Alternate Rate Loans are not available at a commercially reasonable cost (B) cause the then-existing Interest Rate Cap Agreement as reasonably determined by Lender), Lender and Borrower may pursue another option that is acceptable to be modified such Lender that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”)provides Lender equivalent protection from rising interest rates; and
(ii) on or after following such Index Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate SOFR Loan in accordance with Section 2.2(D2.5(b)(iii) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv2.9(c) with respect to any outstanding future Extension TermPeriod, Borrower Interest Rate Cap Party shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension TermPeriod.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Sources: Loan Agreement (Industrial Logistics Properties Trust)
Interest Rate Cap Agreement. (Aa) Prior On or prior to or contemporaneously with the Closing Date, Borrower shall enter into an agreement with (or guaranteed by) an Acceptable Counterparty, which agreement (an “Interest Rate Cap Agreement with a strike price no greater than the Strike Price. The Interest Rate Cap Agreement Agreement”) shall (i) shall at all times be in a form and substance reasonably acceptable satisfactory to Lender with respect to such matters not otherwise set forth in this AgreementLender, (ii) shall at all times be with an contain the agreement of such Acceptable CounterpartyCounterparty 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) shall direct such Acceptable Counterparty require payments based on a notional amount at least equal to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap AgreementLoan Amount, (iv) shall be for a term through not terminate prior to the end of date that is twenty-four (24) months following the Interest Period associated with the then-applicable Maturity Date of the Loan Closing Date, and (v) shall at all times have a notional amount equal require payments to or greater than be made on the then outstanding principal balance of the Loan and shall at all times provide for date that is three (3) Business Days prior to the applicable Strike PricePayment Date. Borrower shall collaterally assign to Lender, pursuant to an assignment agreement in form and substance acceptable to Lender (the “Assignment of CapInterest Rate Cap Agreement”), all of its right, title and interest (but not its obligations) to receive any and all payments under the 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 in the Assignment of Cap and, during the continuance of an Event of Default, as directed 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.
(Bb) 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. All amounts paid by the Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be directly deposited immediately into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender. Borrower shall take all commercially reasonable actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the an Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s its rights thereunder.
(Cd) 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 any Rating Agency Borrower of notice of such that it is no longer an downgrade, withdrawal, qualification, or default (whether received from Lender, the Acceptable Counterparty, or otherwise), then Borrower shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement an Interest Rate Cap Agreement satisfying the requirements of Section 2.2.7(a) above not later than fifteen (15) days following the period receipt by Borrower of time provided for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within ten (10) Business Days notice of such downgrade, withdrawal or qualificationdowngrade (whether received from Lender, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and LenderCounterparty, or otherwise).
(De) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). 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 Agreement, in each case, in accordance with the terms and provisions of this Agreement, Lender may (but shall have no obligation to) purchase the Interest Rate Cap Agreement and the cost actually 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.
(Ef) In connection with the Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender Lender, within twenty (20) Business Days following the Closing Date (x) the date upon which an or, with respect to a Replacement Interest Rate Cap Agreement is required pursuant to Section 2.7(Aor Substitute Interest Rate Cap Agreement, within twenty (20) Business Days following the effective date of such Replacement Interest Rate Cap Agreement or (y) the first day of any applicable Extension TermSubstitute Interest Rate Cap Agreement, as 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 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 Agreement;
; (ii) 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 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; andhave
(iv) the 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).
(Fg) Notwithstanding anything to the contrary contained in this Section 2.7 2.2.7 or elsewhere in this Agreement, if, at any time, in the Loan is converted from event a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”)Conversion occurs, then:
, within ten (i10) within thirty (30) days Business Days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, into a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (iSection 2.2.7(g), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement), together with, within five (5) or (B) cause 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 Assignment of Interest Rate Cap Agreement delivered in connection with the then-existing Interest Rate Cap Agreement 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 determination will be modified such based on market customs and/or proposals of industry associations) that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has is not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof)then generally commercially available from an Acceptable Counterparty, in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Termthen, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent not be required to the effectiveness of obtain a Substitute Interest Rate Cap Agreement on or prior 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 first day of interest rate, which such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” alternative shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned be satisfactory to Lender pursuant to this Agreement and shall contain each of the following:in its reasonable discretion. SECTION
Appears in 1 contract
Sources: Loan Agreement (Instil Bio, Inc.)
Interest Rate Cap Agreement. (A) Prior As a condition to or contemporaneously with the Closing DateClosing, Borrower shall enter into an Interest Rate pledge (free and clear of all Liens relating to the Existing Loan or any pledge of such Existing Loan Cap Agreement in connection with the Existing Loan) and deliver to Lender the interest rate cap agreement relating to the Existing Loan (“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, until Borrower delivers to Lender the Cap required pursuant to Section 2.3(B) below.
(B) Not later than February 28, 2003, Borrower shall purchase and pledge and deliver to Lender a strike price no greater than new interest rate cap agreement satisfying the Strike Pricecriteria set forth herein (a “Cap”) to replace the Existing Loan Cap. The Interest Rate Borrower shall maintain such a Cap Agreement in the possession of Lender, in full force and effect, until all Obligations are fully and finally repaid. Each Cap provided hereunder (i) shall at all times be in a form and substance reasonably acceptable to Lender with respect to such matters not otherwise set forth in this Agreement, (ii) shall at all times be with an Acceptable Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap Agreement, (iv) shall be for a term through the end of the Interest Period associated with the then-applicable Maturity Date of the Loan and (v) shall at all times have a notional amount equal to or greater than the then 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 amortization 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 at all times provide for the applicable Strike Price. Borrower shall collaterally assign be in form and substance reasonably satisfactory to Lender, pursuant to (iv) shall have a term expiring no earlier than the Assignment of Cap, all of its right, title and interest to receive any and all payments under the Interest Rate Cap Agreementthen applicable Maturity Date, and (v) shall deliver 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 an executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender and require that payments be deposited directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender).
(B) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be directly deposited immediately into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender. Borrower shall take all commercially reasonable actions requested by Lender to enforce Lender’s rights under reasonable discretion at the Interest Rate time that the Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s rights thereunder.
(C) is issued. In the event the Cap Provider’s rating falls below “AA” at any time during the term of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by any Rating Agency such that it is no longer an Acceptable Counterpartya Cap, Borrower shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than the period of time provided for in such Interest Rate Cap Agreement following such downgradeshall, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within ten (10) Business Days of such downgradenotice from Lender, withdrawal purchase a new Cap, meeting the criteria set forth herein, from a Cap Provider with a rating of “AA” or qualification, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable better. Within ten (10) Business Days prior to the Rating Agencies and Lender.
(D) expiration of each Cap, Borrower shall deliver a replacement Cap to Lender a new Assignment of Lender. The Ceiling Rate for the Cap acceptable to Lender in connection with be provided not later than February 28, 2003 and for each new Interest Rate replacement Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). 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 cost actually 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 Lender7.25%.
(E) In connection with the Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as 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 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 Agreement;
(ii) 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 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 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).
(F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Sources: Loan and Security Agreement (Digital Realty Trust, Inc.)
Interest Rate Cap Agreement. On or before the "Rate Adjustment Date" (A) Prior as defined in the Loan A Note), or on or before any other date on which the Loan A commences bearing interest at the "Extension Rate" under the Loan A Note, and thereafter as a condition precedent to or contemporaneously with any Subsequent Advance that will result in the Closing Dateaggregate 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 enter into and at all times thereafter maintain an interest rate cap agreement ("Cap Agreement") in connection with the Loans and Loan A. Each Cap Agreement 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 included 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 then held by Collateral Agent, and shall be deemed to include the funds 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 (the "Counterparty"), shall be reasonably satisfactory to Collateral Agent (and shall otherwise satisfy the ratings criteria set forth below). Concurrently with entering into each Cap Agreement, Borrower also shall deliver to Collateral Agent an Interest Rate Cap Security Agreement covering such Cap Agreement, duly executed and delivered by Borrower in favor of Collateral Agent, together with the consent of the Counterparty to such collateral assignment. Each Counterparty shall be rated at least AA by Standard & Poor's and Aa2 by Moody's. If the rating of any Counterparty is at any time downgraded below AA- (Standard & Poor's) or Aa3 (Moody's), then Borrower shall obtain a substitute Cap Agreement with a strike price no greater than the Strike Price. The Interest Rate third party provider rated at least AA by Standard & Poor's and Aa2 by Moody's, which substitute Cap Agreement 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 (i) shall at all times including the requirement that each such Cap Agreement be in a form and substance reasonably acceptable assigned to Lender with respect to such matters not otherwise set forth in this Collateral Agent), so long as each new Cap Agreement is obtained on or before the expiration date of the previous Cap Agreement. However, (ii) shall at all times be with an Acceptable Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the account designated beginning in the Assignment of fifth Loan Year, each Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap Agreement, (iv) Agreement shall be for a term through the end of the Interest Period associated with the then-applicable Maturity Date of the Loan and not less than one (v1) shall at all times have a notional amount equal to or greater than the then outstanding 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 Assignment of Cap, 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 payments be deposited directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender)year.
(B) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be directly deposited immediately into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender. Borrower shall take all commercially reasonable actions requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s rights thereunder.
(C) In the event of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by any Rating Agency such that it is no longer an Acceptable Counterparty, Borrower shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than the period of time provided for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within ten (10) Business Days of such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender.
(D) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). 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 cost actually 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.
(E) In connection with the Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as 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 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 Agreement;
(ii) 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 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 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).
(F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Interest Rate Cap Agreement. (Aa) Prior to or contemporaneously with If at any time during the Closing Dateterm 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 enter into an Interest Rate Cap Agreement with which shall protect against an increase in interest rates which would cause the Annual Interest Rate to exceed a strike price no greater than the Strike Pricerate to be determined by Lender in its sole discretion. The Interest Rate Cap Agreement (i) shall at all times be in a form and substance reasonably acceptable to Lender with respect to such matters not otherwise set forth in this AgreementLender, (ii) shall at all times be with an Acceptable Counterpartya counterparty acceptable to Lender and which counterparty shall have a credit rating of “A” or better by ▇▇▇▇▇’▇ Investors Service, Inc., and “A” or better by Standard and Poor’s Rating Group, (iii) shall direct such Acceptable Counterparty acceptable counterparty to deposit directly into any and all payments due under the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap AgreementAgreement directly into an account designated by Lender (“Designated Account”) so long as any portion of the Loan remains outstanding, any amounts due Borrower under such Interest Rate Cap Agreementprovided 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 be for a have an initial term through of one year, and thereafter (A) if the end 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 Period associated with Rate Cap Agreement then in effect shall be extended for successive one year terms for as long as the then-applicable Maturity Date net operating income of the Loan 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 at all times have a an initial notional amount equal to or greater than the then outstanding unpaid principal balance of the Loan and shall at all times provide for the applicable Strike Price. Loan.
(b) Borrower shall collaterally assign to Lender, pursuant to the Assignment of Cap, 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 (which shall, by its terms, authorize the assignment to Lender and require that payments be deposited directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender).
(B) Agreement. Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be directly deposited immediately into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by LenderDesignated Account. Borrower shall take all commercially reasonable actions requested reasonably required by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty counterparty and shall not waive, amend or otherwise modify any of Borrower’s its rights thereunder.
(Cc) In the event of any a downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty counterparty by any Rating Agency such that it is no longer an Acceptable Counterparty▇▇▇▇▇’▇ 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 or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than the period of time provided for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the replacement Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within counterparty acceptable to Lender not later than ten (10) Business Days business days following receipt of notice from Lender of such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender.
(Dd) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). In the event that Borrower fails to purchase and purchase, deliver to Lender and/or maintain the Interest Rate Cap Agreement or fails any replacement thereof as required hereby or under the terms of the Note, Lender may (in addition to maintain exercising any of its other rights and remedies under the Loan Documents) purchase such Interest Rate Cap Agreement in accordance with the terms and provisions of this Agreement, Lender may purchase the Interest Rate Cap Agreement or any replacement thereof and the cost actually costs incurred by Lender in purchasing such Interest Rate Cap Agreement and maintaining the same 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 paid by Borrower to Lender.
(Ee) In connection with the Interest Rate Cap Agreement, Borrower shall obtain If and deliver to Lender within twenty (20) Business Days following (x) the date upon which when an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term2.9(a), as applicableBorrower shall obtain and deliver to Lender, an opinion from counsel (which counsel may be in-house of counsel for the Acceptable Counterparty) for the Acceptable Counterparty counterparty (upon which Lender and its successors and assigns may rely) which shall providein form, in relevant partscope and substance acceptable to Lender regarding the authorization of the counterparty, that:
(i) the Acceptable Counterparty is duly organizedlegality, validly existingvalidity, 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 Agreement;
(ii) 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 effect of the Interest Rate Cap Agreement, and any such 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; andmatters as Lender shall reasonably require.
(ivf) The obligation to purchase and maintain the Interest Rate Cap Agreement, 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).
(F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower replacement thereof shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior be fully recourse to Borrower taking all and the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension TermLiable Party.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Sources: Mortgage, Security Agreement and Fixture Filing (Strategic Hotels & Resorts, Inc)
Interest Rate Cap Agreement. (Aa) Prior to or contemporaneously with the Closing Date, Borrower Interest Rate Cap Party shall enter into an Interest Rate Cap Agreement with a SOFR strike price no greater than rate equal to the Strike PriceRate. The Interest Rate Cap Agreement (i) shall at all times be in a form and substance reasonably acceptable to Lender with respect to such matters not otherwise set forth in this AgreementLender, (ii) shall at all times be with an Acceptable a Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap Agreement, (iv) shall at all times be for a term through duration at least equal to the end of the Interest Accrual Period associated with in which the then-applicable then current Stated Maturity Date of the Loan occurs, and (viv) shall at all times have a notional amount equal to or greater than the then outstanding principal balance of the Loan and shall at all times provide for a strike rate to be equal to the applicable Strike PriceRate. Borrower Interest Rate Cap Party shall direct such Counterparty to deposit directly into the Restricted Account, or from and after an Event of Default, as directed by L▇▇▇▇▇, any amounts due Borrower Interest Rate Cap Party under such Interest Rate Cap Agreement so long as any portion of the Debt is outstanding, provided that the Debt shall be deemed to be outstanding if the Property is transferred by judicial or non-judicial foreclosure or deed in lieu thereof unless the Loan was paid in full. Additionally, Borrower Interest Rate Cap Party shall collaterally assign to Lender, pursuant to the Collateral Assignment of CapInterest 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 AgreementAgreement (and any replacements thereof), and Borrower shall, and shall cause Counterparty to, deliver to Lender an a fully executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender and require that payments be deposited directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by LenderRestricted Account).
(Bb) Borrower Interest Rate Cap Party shall comply with all of its material obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower Interest Rate Cap Party or Lender shall be directly deposited immediately and directly into the account designated in the Assignment of Cap andRestricted Account, during the continuance of or from and after an Event of Default, as directed by LenderL▇▇▇▇▇. Borrower Interest Rate Cap Party shall take all commercially reasonable actions reasonably requested by Lender L▇▇▇▇▇ to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s its rights thereunder.
(Cc) In the event of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by any Rating Agency such that it is no longer an Acceptable Counterpartybelow the Minimum Counterparty Rating, Borrower shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement Party shall replace the Interest Rate Cap Agreement not later than the period ten (10) Business Days following receipt of time provided for in such Interest Rate Cap Agreement following notice of such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the with an Interest Rate Cap Agreement with in form and substance reasonably satisfactory to Lender (and meeting the requirements set forth in this Section 2.8) (a “Replacement Interest Rate Cap Agreement so long as within ten Agreement”) from a Counterparty reasonably acceptable to Lender having a Minimum Counterparty Rating.
(10d) Business Days of such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Borrower Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender.
(D) Borrower Party shall deliver to Lender a new Collateral Assignment of Interest Rate Cap Agreement acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender)Agreement. In the event that Borrower Interest Rate Cap Party 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 cost actually 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.
(Ee) Each Interest Rate Cap Agreement shall contain the following language or its equivalent: “In connection the event of any downgrade, withdrawal or qualification of the rating of the Counterparty below (i) if any of the Securities or any class thereof in any Securitization is rated by S&P, a long term rating of “A+” by S&P, (ii) if any of the Securities or any class thereof in any Securitization is rated by Moody’s, a long term rating of “A3” by Moody’s or (iii) if any of the Securities or any class thereof in any Securitization is rated by Fitch, a long term rating of “F-1” by Fitch, the Counterparty must, within ten (10) business days, find a replacement Counterparty, at the Counterparty’s sole cost and expense, acceptable to each Rating Agency and Borrower Interest Rate Cap Party; provided that, notwithstanding such a downgrade, withdrawal or qualification, unless and until the Counterparty transfers the Interest Rate Cap Agreement to a replacement Counterparty, 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 ISDA Master Agreement, with the Counterparty as the “Affected Party.”” In the event that a Counterparty is required pursuant to the terms of an Interest Rate Cap Agreement to find a replacement Counterparty, Borrower covenants and agrees that Borrower shall seek L▇▇▇▇▇’s approval with respect thereto and shall not approve or consent to the foregoing unless and until B▇▇▇▇▇▇▇ receives L▇▇▇▇▇’s prior written approval and shall approve or consent to the foregoing upon receipt of L▇▇▇▇▇’s prior written approval.
(f) With respect to each Interest Rate Cap Agreement, Borrower Interest Rate Cap Party shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as applicable, an opinion from counsel (which counsel may be in-in house counsel for the Acceptable Counterparty) for the Acceptable Counterparty (upon which Lender L▇▇▇▇▇ and its successors and assigns may rely) which shall provide, in relevant part, that:
(i) the Acceptable 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 Agreement;
(ii) 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 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 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).
(F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Sources: Loan Agreement (Industrial Logistics Properties Trust)
Interest Rate Cap Agreement. (Aa) Prior At or prior to or contemporaneously with the Closing Date, Borrower shall enter into an interest rate cap agreement (the “Initial Interest Rate Cap Agreement”) 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 strike price no greater than “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 Strike Price. 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) shall at all times be in a form and substance reasonably acceptable to Lender with respect to such matters not otherwise set forth in this AgreementLender, (ii) shall at all times be with an Acceptable Counterpartya Counterparty acceptable to Lender and which Counterparty shall have a credit rating of A2 or better by ▇▇▇▇▇’▇, and A or better by S&P, (iii) shall direct such Acceptable the Counterparty to deposit any and all payments due under the Interest Rate Cap Agreement directly into the an account designated in by Lender so long as any portion of the Assignment Loan remains outstanding (provided, however, that for purposes of Cap andthis 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 shall be continually renewed during the continuance term of the Loan for periods of not less than one (1) year prior to the then expiration date, and (v) shall have an Event initial notional amount equal to the principal balance of Default, as directed by Lender, any amounts due Borrower under the Loan at the time the parties enter into such Interest Rate Cap Agreement.
(d) Additionally, any amounts due Borrower under such Interest Rate Cap Agreement, (iv) shall be for a term through the end of the Interest Period associated with the then-applicable Maturity Date of the Loan and (v) shall at all times have a notional amount equal to or greater than the then outstanding 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 CapInterest 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 AgreementAgreement (and any replacements thereof), and Borrower shall, and shall cause Counterparty to, deliver to Lender an a fully executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender and require that payments be deposited directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed writing from time to time by Lender).
(Be) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be directly deposited immediately into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by LenderLockbox Account. Borrower shall take all commercially reasonable actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s its rights thereunder.
(Cf) In the event of any downgrade, withdrawal downgrade or qualification of the rating of the Acceptable Counterparty by any Rating Agency Moody’s or S&P such that it the rating of the Counterparty is no longer an Acceptable Counterpartybelow 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 replace or cause the cap provider to shall, not later than ten (10) Business Days following receipt of notice from Lender, either: (i) replace the Interest Rate Cap Agreement with a Replacement an Interest Rate Cap Agreement not later than in form and substance reasonably satisfactory to Lender (and meeting the period requirements set forth in this Section 2.7) from a Counterparty reasonably acceptable to Lender having a credit rating of time provided “A2” or better by ▇▇▇▇▇’▇ Investors Service, Inc., and “A” or better by Standard and Poor’s Rating Group, (ii) cause the Counterparty to post collateral for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the Interest Rate Cap Agreement with a Replacement in an amount equal to 100% of the ▇▇▇▇-to-market value of the Interest Rate Cap Agreement so long 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 within ten such terms are defined in the ISDA Credit Support Annex (10NY Law) Business Days as published by the ISDA in 1994, or (iii) cause the Counterparty to provide a guaranty of such downgrade, withdrawal or qualification, the Acceptable Counterparty Counterparty’s obligations under the Interest Rate Cap Agreement provides from an entity that has a guarantor credit rating of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies A2 or better by Moody’s and Lender.A or better by S&P.
(Dg) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). 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 cost actually 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.
(Eh) Each Interest Rate Cap Agreement shall contain the following language or its equivalent: In connection the event that a Counterparty is required pursuant to the terms 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 requirements of this Section 2.7(h) shall constitute, at Lender’s option, an immediate Event of Default.
(i) Within ten (10) Business Days after full execution of an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as applicable, an opinion from counsel (which counsel may be in-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 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 Agreement;
(ii) 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 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 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).
(Fj) Notwithstanding anything Proceeds of any and all rights that Borrower may now or hereafter have to the contrary contained in this Section 2.7 any and all payments, disbursements, distributions or elsewhere in this Agreement, if, at proceeds under any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (“Cap Proceeds”) may be held by Lender as cash collateral for Borrower’s obligations under the Loan Documents and in connection therewithshall be applied as provided below. If an Event of Default exists, but not prior any such Cap Proceeds may be applied by Lender to Borrower taking all the actions described in this clause payment of accrued interest, late charges, principal (iincluding the Prepayment Fee, if any, occasioned by a principal payment), or any other obligation arising out of the obligations of Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted under the Loan back Documents in such manner as Lender in its sole discretion deems appropriate. If no Event of Default exists, proceeds of any such Cap Proceeds received by Lender shall upon receipt be applied by Lender to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof)interest under the Note, in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect then to any outstanding Extension Term, Borrower other amounts due and owing under the Loan Documents and any such Cap Proceeds which remain unapplied thereafter shall instead enter into, make all payments under, and satisfy all conditions precedent be returned to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension TermBorrower.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Interest Rate Cap Agreement. (A) Prior On or prior to or contemporaneously with the Closing Datedate hereof, Borrower Sole Member shall enter into agreement from an Approved Counterparty, which agreement (an “Interest Rate Cap Agreement with a strike price no greater than the Strike Price. The Interest Rate Cap Agreement Agreement”) shall (i) shall at all times be in a form and substance reasonably acceptable satisfactory to Lender with respect to such matters not otherwise set forth in this AgreementLender, (ii) shall contain the agreement of such Approved Counterparty to make payments to Sole Member in the event Term SOFR exceeds a strike rate equal to (or, at all times be with an Acceptable CounterpartyBorrower’s option, lower than) six percent (6.0%), (iii) shall require payments based on notional amounts at least equal to the total Loan Amount, (iv) direct such Acceptable Approved Counterparty to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, Clearing Account any amounts due Borrower to Sole Member under such Interest Rate Cap Agreement, any amounts due Borrower under such the Interest Rate Cap Agreement, (ivv) shall be for a term through the end of the Interest Period associated with the then-applicable not terminate prior to Initial Maturity Date of the Loan and (vvi) shall at all times have a notional amount equal require payments to or greater than the then outstanding principal balance of the Loan and shall at all times provide for be made on the applicable Strike PricePayment Date. Borrower Sole Member shall collaterally assign to Lender, pursuant to the Assignment of Rate Cap, all of its right, title and interest (but not its obligations) to receive any and all payments under the any Interest Rate Cap Agreement, and shall deliver to Lender Lender, within thirty (30) days following the Closing, an executed counterpart of such Interest Rate Cap Agreement (which shall, by its terms, authorize the assignment to Lender and require that payments be deposited directly into the account designated in Clearing Account) and shall notify the Assignment Approved Counterparty of Cap and, during the continuance of an Event of Default, as directed by Lender).
(B) Borrower shall comply with all of its obligations under the terms such assignment and provisions obtain from such counterparty a confirmation of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the assignment of such Interest Rate Cap Agreement to Borrower or Lender shall be directly deposited immediately into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender. Borrower shall take all commercially reasonable actions requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s rights thereunder.
(C) In the event of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by any Rating Agency such that it is no longer an Acceptable Counterparty, Borrower shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than the period of time provided for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within ten (10) Business Days of such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender.
(D) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement form and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed content reasonably acceptable to Lender). 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 cost actually 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.
(E) In connection with the Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as 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 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 Agreement;
(ii) 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 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 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).
(F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Sources: Loan Agreement (Innovative Industrial Properties Inc)
Interest Rate Cap Agreement. (Aa) Prior to Only in the event that the Mortgage Loan has been paid in full or contemporaneously with Mortgage Borrower is in violation of its obligations of Section 2.4 of the Closing Date, Mortgage Loan Agreement shall the terms of this Section 2.4 be applicable. Borrower shall enter into obtain, or cause to be obtained, and shall thereafter maintain in effect, an Interest Rate Cap Agreement with a strike price no greater than the Strike Price. The Interest Rate Cap Agreement an Acceptable Counterparty, which shall (i) shall at all times be in a form coterminous with the Loan and substance reasonably acceptable to Lender with respect to such matters not otherwise set forth in this Agreementthe Mortgage Loan, (ii) have a notional amount which shall not at all times any time be with an Acceptable Counterpartyless than the sum of (A) the outstanding principal balance of the Loan, (B) the outstanding principal balance of the Mortgage Loan and (C) the Unadvanced Loan Funds, and (iii) shall direct such Acceptable Counterparty to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap Agreement, (iv) shall be for a term through the end of the Interest Period associated with the then-applicable Maturity Date of the Loan and (v) shall at all times have a strike rate equal to the Strike Rate. The Counterparty shall be obligated under the Interest Rate Cap 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 or greater than any prepayment of the then outstanding principal balance of the Loan or the Mortgage Loan in accordance with Section 2.3 and shall at all times provide for Section 2.5 of this Agreement or the applicable Strike Price. Mortgage Loan Agreement, as applicable.
(b) Borrower shall collaterally assign to Lender, Lender pursuant to the an Assignment of CapInterest Rate Cap Agreement substantially in the form annexed hereto as Exhibit W, all of its right, title and interest to receive any and all payments under the Interest Rate Cap AgreementAgreement (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 (which shalleither 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, by its termsall of Lender’s right, authorize the assignment to Lender title and require that payments be deposited directly into the account designated interest in the Assignment 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 and, during Agreement and to notify the continuance Counterparty of an Event of Default, as directed by Lender)such release.
(Bc) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty (or its credit support provider, if applicable) under the Interest Rate Cap Agreement to Borrower or Lender shall be directly deposited immediately into the an account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed specified by Lender. Borrower shall take all commercially reasonable actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of Borrower’s its rights thereunder.
(Cd) In the event of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by below the First Trigger Ratings with respect to any of the Rating Agency such that it is no longer an Acceptable CounterpartyAgencies, Borrower the Counterparty shall replace or cause the cap provider post collateral pursuant to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than the period of time provided for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within ten (10) Business Days of following such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender.
(De) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or fails to maintain the any Replacement Interest Rate Cap Agreement in accordance with the terms as and provisions of this Agreementwhen required hereunder, Lender may purchase the such Interest Rate Cap Agreement and the cost actually 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 paid by Borrower to Lender.
(Ef) Each Interest Rate Cap Agreement shall expressly provide that in the event of any downgrade, withdrawal or qualification of the rating of the Counterparty (or its credit support provider, 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 First Trigger Ratings, within thirty (30) calendar days following such downgrade, withdrawal or qualification, all as set forth in the Interest Rate Cap Agreement.
(g) In connection with the an Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as applicable, an opinion of counsel 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:
(i1) the Acceptable 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 Agreement;
(ii2) 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 documentsOrganizational Documents) or any law, regulation or contractual restriction binding on or affecting it or its property;
(iii3) 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 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
(iv4) the 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).
(F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
Appears in 1 contract
Sources: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Interest Rate Cap Agreement. (Aa) Prior to or contemporaneously with On the Closing Date, Borrower shall enter into an Interest Rate Cap Agreement with a strike price no greater than obtain, and thereafter maintain in effect, the Strike Price. The Interest Rate Cap Agreement (i) shall at all times be in a form and substance reasonably acceptable to Lender with respect to such matters not otherwise set forth in this Agreement, (ii) shall at all times be with an Acceptable Counterparty, (iii) shall direct such Acceptable Counterparty to deposit directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by Lender, any amounts due Borrower under such Initial Interest Rate Cap Agreement, any amounts due Borrower under such Interest Rate Cap Agreement, (iv) which shall be for a term through the end of the Interest Period associated coterminous with the then-applicable Initial Maturity Date of the Loan and (v) shall at all times have a notional amount equal to the Loan Amount. The Initial Interest Rate Cap Agreement shall have a LIBOR strike rate equal to or greater less than the then outstanding principal balance Strike Rate.
(b) If Borrower exercises any option to extend the term of the Loan and shall at all times provide for pursuant to Section 2.10, then on or prior to the commencement of the applicable Extension Term, Borrower shall obtain an Extension Interest Rate Cap Agreement having (x) a term coterminous with such Extension Term, (y) a notional amount at least equal to the Principal Indebtedness as of the first day of such Extension Term, and (z) a LIBOR strike rate equal to or less than the Strike Price. Rate.
(c) Borrower shall collaterally assign to Lender, Lender pursuant to the Assignment of Cap, Rate Cap Pledge and Security Agreement all of its right, title and interest to receive in any and all payments under the each Interest Rate Cap Agreement, Agreement and shall deliver to Lender an executed counterpart of such Interest Rate Cap Pledge and Security Agreement and obtain the consent of the Acceptable Counterparty to such collateral assignment (which shall, as evidenced by its terms, authorize the assignment Acceptable Counterparty's execution of a separate acknowledgment to Lender such Rate Cap Pledge and require that payments be deposited directly into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by LenderSecurity Agreement).
(Bd) Borrower shall comply with all of its obligations under the terms and provisions of the each Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the an Interest Rate Cap Agreement to Borrower or Lender shall be deposited directly deposited immediately into the account designated in the Assignment of Cap and, during the continuance of an Event of Default, as directed by LenderDeposit Account. Borrower shall take all commercially reasonable actions reasonably requested by Lender to enforce Lender’s 's rights under the Interest Rate Cap Pledge and Security Agreement in the event of a default by the Acceptable Counterparty counterparty thereunder and shall not waive, amend or otherwise modify any of Borrower’s its rights thereunder.
thereunder without Lender's reasonable consent (C) In the event which consent may be conditioned on receipt of any downgrade, withdrawal or qualification of the rating of the Acceptable Counterparty by any a Rating Agency such that it is no longer an Acceptable Counterparty, Borrower shall replace or cause the cap provider to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement not later than the period of time provided for in such Interest Rate Cap Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days), provided, Borrower shall not be required to replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement so long as within ten (10) Business Days of such downgrade, withdrawal or qualification, the Acceptable Counterparty under the Interest Rate Cap Agreement provides a guarantor of its obligations that is an Acceptable Counterparty pursuant to such terms as are acceptable to the Rating Agencies and Lender.
(D) Borrower shall deliver to Lender a new Assignment of Cap acceptable to Lender in connection with each new Interest Rate Cap Agreement and Replacement Interest Rate Cap Agreement (the parties agree that the form of the Assignment of Cap provided in connection with the closing of the Loan shall be deemed acceptable to Lender). 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 cost actually 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.
(E) In connection with the Interest Rate Cap Agreement, Borrower shall obtain and deliver to Lender within twenty (20) Business Days following (x) the date upon which an Interest Rate Cap Agreement is required pursuant to Section 2.7(A) or (y) the first day of any applicable Extension Term, as 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 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 Agreement;
(ii) 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 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 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 lawConfirmation).
(F) Notwithstanding anything to the contrary contained in this Section 2.7 or elsewhere in this Agreement, if, at any time, the Loan is converted from a Floating Interest Rate Loan to either a Prime Rate Loan or an Alternate Rate Loan or from a Prime Rate Loan to an Alternate Rate Loan in accordance with Section 2.2(D) above (each, a “Rate Conversion”), then:
(i) within thirty (30) days after such Rate Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Cap Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (i), Borrower shall have the right to terminate any then-existing Interest Rate Cap Agreement) or (B) cause the then-existing Interest Rate Cap Agreement to be modified such that such then-existing Interest Rate Cap Agreement satisfies the requirements of a Substitute Interest Rate Cap Agreement as set forth below in the definition thereof (a “Converted Interest Rate Cap Agreement”); and
(ii) on or after such Rate Conversion (provided Lender has not converted the Loan back to a Floating Interest Rate Loan in accordance with Section 2.2(D) hereof), in lieu of satisfying the condition described in Section 2.4(A)(iv) with respect to any outstanding Extension Term, Borrower shall instead enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of a Substitute Interest Rate Cap Agreement on or prior to the first day of such Extension Term.
(G) As used herein, “Substitute Interest Rate Cap Agreement” shall mean an interest rate Cap Agreement between an Acceptable Counterparty and Borrower, obtained by Borrower and collaterally assigned to Lender pursuant to this Agreement and shall contain each of the following:
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Sources: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)