Second Qualified Extension Option Sample Clauses
The Second Qualified Extension Option is a contractual provision that allows a party, typically a tenant or lessee, to extend the term of an agreement for a second additional period, provided certain pre-defined conditions are met. This clause usually specifies the notice period required to exercise the option, any changes to terms such as rent or fees during the extension, and may require the party to be in good standing under the agreement. Its core practical function is to offer flexibility and predictability for both parties by outlining a clear process for extending the contractual relationship beyond the initial and first extension terms, thereby reducing uncertainty and facilitating long-term planning.
Second Qualified Extension Option. Borrowers shall have the right to extend the First Qualified Extended Maturity Date to the Second Qualified Extended Maturity Date (the “Second Qualified Extension Option”; and the period commencing on the first (1st) day following the First Qualified Extended Maturity Date and ending on the Second Qualified Extended Maturity Date being referred to herein as the “Second Qualified Extension Term”), provided that all of the following conditions are satisfied:
(i) no monetary Default, Event of Default, monetary Mortgage Default, Mortgage Event of Default, any monetary Mezzanine Default or any Mezzanine Event of Default shall have occurred and be continuing at the time the Second Qualified Extension Option is exercised or on the date that the Second Qualified Extension Term commences;
(ii) Borrowers shall notify Lender of their irrevocable election to exercise the Second Qualified Extension Option not earlier than six (6) months, and not later than thirty (30) days, prior to the First Qualified Extended Maturity Date;
(iii) if the Interest Rate Cap Agreement is scheduled to mature prior to the Second Qualified Extended Maturity Date, Borrowers shall obtain and deliver to Lender not later than one (1) Business Day immediately preceding the first day of the Second Qualified Extension Term, one or more Replacement Interest Rate Cap Agreements (or extension(s) of the existing Interest Rate Cap Agreement(s)) from an Acceptable Counterparty, which Replacement Interest Rate Cap Agreement(s) (or extension(s) of the existing Interest Rate Cap Agreement(s)) shall (i) be effective commencing on the first day of the Second Qualified Extension Term, (ii) have a LIBOR strike price equal to the applicable Strike Price, and (iii) have a maturity date not earlier than the Second Qualified Extended Maturity Date;
(iv) not later than one (1) Business Day immediately preceding the first day of the Second Qualified Extension Term, all accrued and unpaid interest and any unpaid or unreimbursed amounts in respect of the Loan and any other sums then due to Lender hereunder or under any of the other Loan Documents shall have been paid in full;
(v) not later than one (1) Business Day immediately preceding the first day of the Second Qualified Extension Term, Borrowers shall have caused Mortgage Borrowers to deposit with Mortgage Lender in immediately available funds, for deposit by Mortgage Lender into the Interest Reserve Account, an amount equal to the Extension Interest Shortfall wi...