Common use of Debt Service Test Clause in Contracts

Debt Service Test. The determination by Agent, in its sole discretion exercised in good faith, that the Property has generated Net Operating Income during the immediately preceding three (3) months which, when annualized, equals or exceeds the product of (a) with respect to a proposed reduction in the Interest Rate payable under the Loan Documents, as contemplated in the definition of “LIBOR Rate” below, 1.00 times Debt Service (the “Interest Rate Reduction Debt Service Test”), (b) with respect to the condition set forth in Section 1.4(b) hereof for the Second Extension Period, as determined as of the first day of such Extension Period, 1.00 times Debt Service (the “Extension Debt Service Test”), and (c) with respect to a proposed reduction in the liability of Borrower under the Loan Documents, as contemplated in Section 8.17 hereof, 1.00 times Debt Service (the “Recourse Reduction Debt Service Test”).