Common use of Threshold Event Collateral Clause in Contracts

Threshold Event Collateral. (a) Notwithstanding the foregoing, the Note-B Holders shall be entitled to avoid a Control Appraisal Period caused by the application of an Appraisal Reduction Event upon satisfaction of the either of the following (which must be completed within sixty (60) days following Note-B Holders’ receipt of written notice from the Administrative Agent of the occurrence of a Control Appraisal Period): (x) Note-B Holders pay to Administrative Agent for application to the reduction of the principal balance of the A-Note, one hundred percent (100%) of the amount by which the principal balance of the Loan must be reduced to cause such Control Appraisal Period to no longer be continuing or (y) (i) the Note-B Holders shall have delivered as a supplement to the appraised value of the Property, in the amount specified in clause (ii) below, to Administrative Agent together with documentation to create and perfect a first-priority security interest in favor of the Administrative Agent for the benefit of Note-A Holders in such collateral in form and substance reasonably acceptable to Administrative Agent and the Note-B Holders) (a) cash collateral for the benefit of the Note-A Holders, and/or (b) an unconditional and irrevocable standby letter of credit payable on sight demand with Administrative Agent for the benefit of the Note-A Holders as beneficiary issued by a domestic bank or other financial institutions the long-term unsecured debt obligations of which are rated at least “A+” by S&P and “A1” by ▇▇▇▇▇’▇ (either (a) or (b), the “Threshold Event Collateral”), and (ii) the Threshold Event Collateral shall be an amount equal to one hundred percent (100%) of the amount which, when added to the appraised value of the Property, would cause the Control Appraisal Period not to occur. If the requirements of this paragraph are satisfied by the Note-B Holders (a “Threshold Event Cure”), no Control Appraisal Period caused by application of an Appraisal Reduction Amount shall be deemed to have occurred. If a letter of credit is furnished as Threshold Event Collateral, the Note-B Holders shall be required to renew such letter of credit not later than 30 days prior to expiration thereof or to replace such letter of credit with a substitute letter of credit or other Threshold Event Collateral with an expiration date that is greater than 180 days from the date of substitution; provided, however, that if a letter of credit is not renewed prior to 30 days prior to the expiration date of such letter of credit, the letter of credit shall provide that Administrative Agent for the benefit of the Note-A Holders may draw upon such letter of credit and hold the proceeds thereof as Threshold Event Collateral. If a letter of credit is initially furnished as Threshold Event Collateral and the issuer of such letter of credit at any time no longer satisfies the unsecured debt rating requirements set forth above. The Note-B Holders shall be required within ten (10) Business Days of notice thereof to replace such original letter of credit with a replacement letter of credit from an issuer meeting the rating requirements set forth herein. The Threshold Event Cure shall continue until (i) the amount provided as Threshold Event Collateral is not equal to one hundred percent (100%) of the amount which when added to the appraised value of the Property would not be sufficient to prevent a Control Appraisal Period from occurring (a “Threshold Event Collateral Deficiency”); provided, however, that upon the Note-B Holders’ receipt of written notice from Administrative Agent of the existence of a Threshold Event Collateral Deficiency, the Note-B Holders shall have the right to deliver to Administrative Agent for the benefit of the Note-A Holders additional Threshold Event Collateral equal to the amount when added to previously delivered Threshold Event Collateral then being held by Administrative Agent for the benefit of Note-A Holder, shall equal one hundred percent (100%) of the amount which, when taken together with the value of the Property, would be sufficient to prevent a Control Appraisal Event from occurring; or (ii) the appraised value of the Property, upon any redetermination thereof effected in accordance with the terms hereof, but in all events at the sole expense of the Note-B Holders, is sufficient to avoid the occurrence of a Control Appraisal Period without taking into consideration any Threshold Event Collateral previously delivered by the Note-B Holders (and in the event described under this clause (ii), the Threshold Event Collateral held by Administrative Agent for the benefit of the Note-A Holders shall be promptly be returned to the Note-B Holders). The parties agree that upon a final realization on the collateral that secures the Loan, Administrative Agent shall apply the Threshold Event Collateral to reduce amounts due and owing to the Noteholders in accordance with Section 4.2(B) hereof and all remaining Threshold Event Collateral after all amounts due and owing to the Noteholders have been paid with respect to the Loan thereafter, if any, shall be returned to Note-B Holders. (b) Without limiting Note-B Holder’s rights under subsection (a) hereof, upon an Appraisal Reduction Event, Note-B Holder shall have the right, at its sole expense, within fifteen (15) days of receipt of notice of the Appraisal Reduction Event, to require the Administrative Agent to order a second Appraisal with respect to the Loan. Administrative Agent shall use commercially reasonable good faith efforts to ensure that such second Appraisal is delivered within thirty (30) days from receipt of the Note-B Holder’s written request and shall ensure that such Appraisal is prepared on an “as-is” basis by an MAI appraiser (provided that such MAI appraiser may not be the same MAI appraiser that provided the Appraisal in respect of which the Note-B Holder is requesting the Administrative Agent to obtain an additional Appraisal). (c) Upon receipt of any supplemental Appraisal pursuant to subsection (b) above, Administrative Agent shall determine, in good faith whether, based on its assessment of such supplemental Appraisal, any recalculation of the Appraisal Reduction Amount is warranted, and if so warranted, Administrative Agent shall recalculate the Appraisal Reduction Amount based on such supplemental Appraisal and any information received from the Servicer. If based on such recalculation, the Control Appraisal Period is not continuing, such Control Appraisal Period shall immediately terminate.

Threshold Event Collateral. (a) Notwithstanding the foregoing, the Note-B Holders shall be entitled to avoid a Control Appraisal Period caused by the application of an Appraisal Reduction Event upon satisfaction of the either of the following (which must be completed within sixty (60) days following Note-B Holders’ receipt of written notice from the Administrative Agent of the occurrence of a Control Appraisal Period): (x) Note-B Holders pay to Administrative Agent for application to the reduction of the principal balance of the A-Note, one hundred percent (100%) of the amount by which the principal balance of the Loan must be reduced to cause such Control Appraisal Period to no longer be continuing or (y) (i) the Note-B Holders shall have delivered as a supplement to the appraised value of the Property, in the amount specified in clause (ii) below, to Administrative Agent together with documentation to create and perfect a first-priority security interest in favor of the Administrative Agent for the benefit of Note-A Holders in such collateral in form and substance reasonably acceptable to Administrative Agent and the Note-B Holders) (a) cash collateral for the benefit of the Note-A Holders, and/or (b) an unconditional and irrevocable standby letter of credit payable on sight demand with Administrative Agent for the benefit of the Note-A Holders as beneficiary issued by a domestic bank or other financial institutions the long-term unsecured debt obligations of which are rated at least “A+” by S&P and “A1” by ▇▇▇▇▇’▇ (either (a) or (b), the “Threshold Event Collateral”), and (ii) the Threshold Event Collateral shall be an amount equal to one hundred percent (100%) of the amount which, when added to the appraised value of the Property, would cause the Control Appraisal Period not to occur. If the requirements of this paragraph are satisfied by the Note-B Holders (a “Threshold Event Cure”), no Control Appraisal Period caused by application of an Appraisal Reduction Amount shall be deemed to have occurred. If a letter of credit is furnished as Threshold Event Collateral, the Note-B Holders shall be required to renew such letter of credit not later than 30 days prior to expiration thereof or to replace such letter of credit with a substitute letter of credit or other Threshold Event Collateral with an expiration date that is greater than 180 days from the date of substitution; provided, however, that if a letter of credit is not renewed prior to 30 days prior to the expiration date of such letter of credit, the letter of credit shall provide that Administrative Agent for the benefit of the Note-A Holders may draw upon such letter of credit and hold the proceeds thereof as Threshold Event Collateral. If a letter of credit is initially furnished as Threshold Event Collateral and the issuer of such letter of credit at any time no longer satisfies the unsecured debt rating requirements set forth above. The Note-B Holders shall be required within ten (10) Business Days of notice thereof to replace such original letter of credit with a replacement letter of credit from an issuer meeting the rating requirements set forth herein. The Threshold Event Cure shall continue until (i) the amount provided as Threshold Event Collateral is not equal to one hundred percent (100%) of the amount which when added to the appraised value of the Property would not be sufficient to prevent a Control Appraisal Period from occurring (a “Threshold Event Collateral Deficiency”); provided, however, that upon the Note-B Holders’ receipt of written notice from Administrative Agent of the existence of a Threshold Event Collateral Deficiency, the Note-B Holders shall have the right to deliver to Administrative Agent for the benefit of the Note-A Holders additional Threshold Event Collateral equal to the amount when added to previously delivered Threshold Event Collateral then being held by Administrative Agent for the benefit of Note-A Holder, shall equal one hundred percent (100%) of the amount which, when taken together with the value of the Property, would be sufficient to prevent a Control Appraisal Event from occurring; or (ii) the appraised value of the Property, upon any redetermination thereof effected in accordance with the terms hereof, but in all events at the sole expense of the Note-B Holders, is sufficient to avoid the occurrence of a Control Appraisal Period without taking into consideration any Threshold Event Collateral previously delivered by the Note-B Holders (and in the event described under this clause (ii), the Threshold Event Collateral held by Administrative Agent for the benefit of the Note-A Holders shall be promptly be returned to the Note-B Holders). The parties agree that upon a final realization on the collateral that secures the Loan, Administrative Agent shall apply the Threshold Event Collateral to reduce amounts due and owing to the Noteholders in accordance with Section 4.2(B) hereof and all remaining Threshold Event Collateral after all amounts due and owing to the Noteholders have been paid with respect to the Loan thereafter, if any, shall be returned to Note-B Holders. (b) Without limiting Note-B Holder’s rights under subsection (a) hereof, upon an Appraisal Reduction Event, Note-B Holder shall have the right, at its sole expense, within fifteen (15) days of receipt of notice of the Appraisal Reduction Event, to require the Administrative Agent to order a second Appraisal with respect to the Loan. Administrative Agent shall use commercially reasonable good faith efforts to ensure that such second Appraisal is delivered within thirty (30) days from receipt of the Note-B Holder’s written request and shall ensure that such Appraisal is prepared on an “as-is” basis by an MAI appraiser (provided that such MAI appraiser may not be the same MAI appraiser that provided the Appraisal in respect of which the Note-B Holder is requesting the Administrative Agent to obtain an additional Appraisal). (c) Upon receipt of any supplemental Appraisal pursuant to subsection (b) above, Administrative Agent shall determine, in good faith whether, based on its assessment of such supplemental Appraisal, any recalculation of the Appraisal Reduction Amount is warranted, and if so warranted, Administrative Agent shall recalculate the Appraisal Reduction Amount based on such supplemental Appraisal and any information received from the Servicer. If based on such recalculation, the Control Appraisal Period is not continuing, such Control Appraisal Period shall immediately terminate.

Threshold Event Collateral. (a) Notwithstanding the foregoing, the Note-B Holders shall be entitled to avoid a Control Appraisal Period caused by the application of an Appraisal Reduction Event upon satisfaction of the either of the following (which must be completed within sixty (60) days following Note-B Holders’ receipt of written notice from the Administrative Agent of the occurrence of a Control Appraisal Period): (x) Note-B Holders pay to Administrative Agent for application to the reduction of the principal balance of the Note A-Note, one hundred percent (100%) of the amount by which the principal balance of the Loan must be reduced to cause such Control Appraisal Period to no longer be continuing or (y) (i) the Note-B Holders shall have delivered as a supplement to the appraised value of the Property, in the amount specified in clause (ii) below, to Administrative Agent together with documentation to create and perfect a first-priority security interest in favor of the Administrative Agent for the benefit of Note-A Holders in such collateral in form and substance reasonably acceptable to Administrative Agent and the Note-B Holders) (a) cash collateral for the benefit of the Note-A Holders, and/or (b) an unconditional and irrevocable standby letter of credit payable on sight demand with Administrative Agent for the benefit of the Note-A Holders as beneficiary issued by a domestic bank or other financial institutions the long-term unsecured debt obligations of which are rated at least “A+” by S&P and “A1” by ▇▇▇▇▇’▇ (either (a) or (b), the “Threshold Event Collateral”), and (ii) the Threshold Event Collateral shall be an amount equal to one hundred percent (100%) of the amount which, when added to the appraised value of the Property, would cause the Control Appraisal Period not to occur. If the requirements of this paragraph are satisfied by the Note-B Holders (a “Threshold Event Cure”), no Control Appraisal Period caused by application of an Appraisal Reduction Amount shall be deemed to have occurred. If a letter of credit is furnished as Threshold Event Collateral, the Note-B Holders shall be required to renew such letter of credit not later than 30 days prior to expiration thereof or to replace such letter of credit with a substitute letter of credit or other Threshold Event Collateral with an expiration date that is greater than 180 days from the date of substitution; provided, however, that if a letter of credit is not renewed prior to 30 days prior to the expiration date of such letter of credit, the letter of credit shall provide that Administrative Agent for the benefit of the Note-A Holders may draw upon such letter of credit and hold the proceeds thereof as Threshold Event Collateral. If a letter of credit is initially furnished as Threshold Event Collateral and the issuer of such letter of credit at any time no longer satisfies the unsecured debt rating requirements set forth above. The Note-B Holders shall be required within ten (10) Business Days of notice thereof to replace such original letter of credit with a replacement letter of credit from an issuer meeting the rating requirements set forth herein. The Threshold Event Cure shall continue until (i) the amount provided as Threshold Event Collateral is not equal to one hundred percent (100%) of the amount which when added to the appraised value of the Property would not be sufficient to prevent a Control Appraisal Period from occurring (a “Threshold Event Collateral Deficiency”); provided, however, that upon the Note-B Holders’ receipt of written notice from Administrative Agent of the existence of a Threshold Event Collateral Deficiency, the Note-B Holders shall have the right to deliver to Administrative Agent for the benefit of the Note-A Holders additional Threshold Event Collateral equal to the amount when added to previously delivered Threshold Event Collateral then being held by Administrative Agent for the benefit of Note-A Holder, shall equal one hundred percent (100%) of the amount which, when taken together with the value of the Property, would be sufficient to prevent a Control Appraisal Event from occurring; or (ii) the appraised value of the Property, upon any redetermination thereof effected in accordance with the terms hereof, but in all events at the sole expense of the Note-B Holders, is sufficient to avoid the occurrence of a Control Appraisal Period without taking into consideration any Threshold Event Collateral previously delivered by the Note-B Holders (and in the event described under this clause (ii), the Threshold Event Collateral held by Administrative Agent for the benefit of the Note-A Holders shall be promptly be returned to the Note-B Holders). The parties agree that upon a final realization on the collateral that secures the Loan, Administrative Agent shall apply the Threshold Event Collateral to reduce amounts due and owing to the Noteholders in accordance with Section 4.2(B) hereof and all remaining Threshold Event Collateral after all amounts due and owing to the Noteholders have been paid with respect to the Loan thereafter, if any, shall be returned to Note-B Holders. (b) Without limiting Note-B Holder’s rights under subsection (a) hereof, upon an Appraisal Reduction Event, Note-Note B Holder shall have the right, at its sole expense, within fifteen (15) days of receipt of notice of the Appraisal Reduction Event, to require the Administrative Agent to order a second Appraisal with respect to the Loan. Administrative Agent shall use commercially reasonable good faith efforts to ensure that such second Appraisal is delivered within thirty (30) days from receipt of the Note-B Holder’s written request and shall ensure that such Appraisal is prepared on an “as-is” basis by an MAI appraiser (provided that such MAI appraiser may not be the same MAI appraiser that provided the Appraisal in respect of which the Note-B Holder is requesting the Administrative Agent to obtain an additional Appraisal). (c) Upon receipt of any supplemental Appraisal pursuant to subsection (b) above, Administrative Agent shall determine, in good faith whether, based on its assessment of such supplemental Appraisal, any recalculation of the Appraisal Reduction Amount is warranted, and if so warranted, Administrative Agent shall recalculate the Appraisal Reduction Amount based on such supplemental Appraisal and any information received from the Servicer. If based on such recalculation, the Control Appraisal Period is not continuing, such Control Appraisal Period shall immediately terminate.