The Interest Rate Cap Agreements Clause Samples

The Interest Rate Cap Agreements clause establishes the terms under which a party limits its exposure to rising interest rates by entering into financial contracts that set a maximum interest rate, or "cap," on variable-rate obligations. Typically, this clause outlines the conditions for purchasing such cap agreements, the calculation of payments if interest rates exceed the cap, and the responsibilities of each party regarding the maintenance and costs of the cap. Its core practical function is to provide financial predictability and protect against the risk of increased borrowing costs due to fluctuating interest rates.
The Interest Rate Cap Agreements. (a) The Interest Rate Cap Agreements will be an asset of the Trust but will not be an asset of any REMIC and any amounts received thereon shall be taxable to the Class BIO Certificateholder. The Trustee shall treat the Interest Rate Cap Agreements as having a nominal (zero) value for the Holders of the Offered Certificates. (b) The Trustee shall deposit any amounts received with respect to the Interest Rate Cap Agreements on an Interest Rate Cap Payment Date into the Net Rate Cap Fund and the Trustee will prepare and deliver any notices required to be delivered to the Cap Provider under the Interest Rate Cap Agreements. If, however, on any Distribution Date the notional amount of the Interest Rate Cap Agreement exceeds the aggregate balance of the Adjustable Rate Certificates, then the Trustee shall deposit in the Net Rate Cap Fund only the amount that would be payable on the Interest Rate Cap Agreement for such Distribution Date if the notional amount of such Interest Rate Cap Agreement for such date were equal to the aggregate balance of the Adjustable Rate Certificates, and the Trustee shall remit any excess amounts directly to the holder of the Class BIO Certificates. (c) The Trustee shall terminate the Cap Provider upon the occurrence of an event of default or termination event under the Interest Rate Cap Agreement of which a Responsible Officer of the Trustee has actual knowledge. In the event that the Interest Rate Cap Agreement is canceled or otherwise terminated for any reason (other than the exhaustion of the interest rate protection provided thereby), the Trustee shall, at the direction of Certificateholders evidencing Voting Rights not less than 50% of the Offered Certificates, and to the extent a replacement contract is available (from a counterparty designated by the Depositor and acceptable to Certificateholders evidencing Voting Rights not less than 50% of the Offered Certificates), execute a replacement contract comparable to the Interest Rate Cap Agreement providing interest rate protection which is equal to the then-existing protection provided by the Interest Rate Cap Agreement; provided, however, that the cost of any such replacement contract providing the same interest rate protection provided by such replacement contract may be reduced to a level such that the cost of such replacement contract shall not exceed the amount of any early termination payment received from the Cap Provider. (d) On any Distribution Date prior to the Interes...
View SourceView Similar (13)
The Interest Rate Cap Agreements. (a) The Trust Administrator shall establish and maintain an Eligible Account in its name, in trust for the benefit of the Noteholders, the Interest Rate Cap Account. (b) The Trust Administrator shall deposit any Interest Rate Cap Receipts received with respect to any Interest Rate Cap Agreement Payment Date into the Interest Rate Cap Account. Amounts on deposit in the Interest Rate Cap Account shall remain uninvested. (c) On each [Class AF-1A] Cap Agreement Payment Date, the Trust Administrator shall withdraw from the Interest Rate Cap Account any Interest Rate Cap Receipts from the [Class AF-1A] Cap Agreement to make payments in the order of priority and to the extent specified in Section 6.02(f)(iii)(1); provided, that on each Payment Date on which there is a payment received by the Trust Administrator under the [Class AF-1A] Cap Agreement that is based on a notional amount in excess of the aggregate Class Principal Amount of the Class [1A1] and Class [1A__] Notes (such amount, the "Excess [Class AF-1A] Cap Amount"), then the Trust Administrator shall pay (i) the Excess [Class AF-1A] Cap Amount to the Ownership Certificate and (ii) the excess of such Interest Rate Cap Receipts over the Excess [Class AF-1A] Cap Amount for such Payment Date in the order of priority and to the extent specified in Section 6.02(f)(iii)(1) of this Agreement. (d) On each [Group 2-AV] Cap Agreement Payment Date, the Trust Administrator shall withdraw from the Interest Rate Cap Account any Interest Rate Cap Receipts from the [Group 2-AV] Cap Agreement to make payments in the order of priority and to the extent specified in Section 6.02(f)(iii)(2); provided, that on each Payment Date on which there is a payment received by the Trust Administrator under the [Group 2-AV] Cap Agreement that is based on a notional amount in excess of the aggregate Class Principal Amount of the [Class 2-AV-1] and [Class 2-AV-1] Notes (such amount, the "Excess [Class 2-AV] Cap Amount"), then the Trust Administrator shall pay (i) the Excess [Group 2-AV] Cap Amount to the Ownership Certificate and (ii) the excess of such Interest Rate Cap Receipts over the Excess [Group 2-AV] Cap Amount for such Payment Date in the order of priority and to the extent specified in Section 6.02(f)(iii)(2) of this Agreement. (e) On each [Group 3-AV] Cap Agreement Payment Date, the Trust Administrator shall withdraw from the Interest Rate Cap Account any Interest Rate Cap Receipts from the [Group 3-AV] Cap Agreement to make p...
View SourceView Similar (12)
The Interest Rate Cap Agreements. (a) A separate trust is hereby established (the “Supplemental Interest Trust”), the corpus of which shall be held by the Supplemental Interest Trust Trustee, in trust, for the benefit of the holders of the Class 1-A-1C, Class 1-A-2B, Class 1-M-4, Class 1-M-5 and Class 1-B-1 Certificates. On the Closing Date, the Trust Administrator shall establish and maintain in its name on behalf of the Supplemental Interest Trust Trustee, in trust for the benefit of the Class 1-A-1C, Class 1-A-2B, Class 1-M-4, Class 1-M-5 and Class 1-B-1 Certificates, five Interest Rate Cap Accounts designated as the Class 1-A-1C Cap Account, Class 1-A-2B Cap Account, Class 1-M-4 Cap Account, Class 1-M-5 Cap Account and Class 1-B-1 Cap Account. Each Interest Rate Cap Account shall correspond to a particular Interest Rate Cap Agreement. The Interest Rate Cap Accounts shall be Eligible Accounts, and funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including without limitation, other moneys held by the Trust Administrator pursuant to this Agreement. The Interest Rate Cap Accounts shall be an asset of the Supplemental Interest Trust, but will not be an asset of any REMIC. (b) The Trustee is hereby directed by the Depositor, solely as Supplemental Interest Trust Trustee and not in its individual capacity, on or before the Closing Date, on behalf of the Supplemental Interest Trust, to enter into the Interest Rate Cap Agreements for the benefit of the Holders of the Class 1-A-1C, Class 1-A-2B, Class 1-M-4, Class 1-M-5 and Class 1-B-1 Certificates and the Trust Administrator is hereby directed by the Depositor to acknowledge and agree to each of the Interest Rate Cap Agreements. The Trust Administrator shall administer to, and hold, and receive and make all payments under, each of the Interest Rate Cap Agreements on behalf of the Supplemental Interest Trust and the Supplemental Interest Trust Trustee in accordance with its terms and the provisions of this Agreement. Neither the Supplemental Interest Trustee nor the Trust Administrator shall have any responsibility for the contents, adequacy or sufficiency of the Interest Rate Cap Agreements, including, without limitation, any covenants, representations and warranties contained therein. The Interest Rate Cap Agreements will be an asset of the Supplemental Interest Trust but will not be an asset of any REMIC. Any funds payable by the Supplemental Interest Trust under the Interest ...
View SourceView Similar (6)
The Interest Rate Cap Agreements. (a) On the Closing Date, the Issuing Entity shall execute and deliver each Initial Interest Rate Cap Agreement. (b) Subject to Section 11.21 hereof, the Indenture Trustee shall take all steps necessary to enforce the Issuing Entity’s rights under each Interest Rate Cap Agreement, including receiving payments from the Cap Provider when due and exercising the Issuing Entity’s rights under each Interest Rate Cap Agreement in accordance with the terms of such Interest Rate Cap Agreement. (c) [ ] is hereby designated calculation agent with respect to each Floating Rate Note and each Interest Rate Cap Agreement (including any successor or replacement calculation agent designated from time to time by agreement of the parties hereto, the “Calculation Agent”), and in such capacity, on each Interest Determination Date, will (i) calculate the rate that will be both the Interest Rate with respect to each Class of the Floating Rate Notes [and the floating rate for the Interest Rate Cap Agreement related to each such Class and (ii) deliver to the Servicer written notice on such Interest Determination Date of such Interest Rate]. All determinations of interest by the Calculation Agent shall, in the absence of manifest error, be conclusive for all purposes and binding on the Noteholders of the Floating Rate Notes. All percentages resulting from any calculation on the Floating Rate Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five millionths of a percentage point rounded upwards (e.g., 9.876545% (or 0.09876545) would be rounded to 9.87655% (or 0.0987655)), and all dollar amounts used in or resulting from that calculation on the Floating Rate Note will be rounded to the nearest cent (with one-half cent being rounded upwards). The Calculation Agent may be removed by the Issuing Entity at any time. If the Calculation Agent is unable or unwilling to act as such or is removed by the Issuing Entity, the Issuing Entity will promptly appoint as a replacement Calculation Agent a leading bank which is engaged in transactions in Eurodollar deposits and which does not control or is not controlled by or under common control with the Issuing Entity or its Affiliates. The Calculation Agent may not resign its duties without a successor having been duly appointed. (d) The Indenture Trustee shall have no liability with respect to any act or failure to act by the Issuing Entity under any Interest Rate Cap Agreement (provided that this sentence shall...
View SourceView Similar (2)

Related to The Interest Rate Cap Agreements

  • Interest Rate Cap Agreement (a) Prior to or contemporaneously with the Closing Date, Borrower shall have obtained the Interest Rate Cap Agreement. The Interest Rate Cap Agreement shall be maintained throughout the term of the Loan with an Acceptable Counterparty. If, at any time, the interest rate cap provider ceases to be an Acceptable Counterparty, Borrower shall replace the Interest Rate Cap Agreement with a Replacement Interest Rate Cap Agreement at Borrower’s sole cost and expense within ten (10) days of receipt of notice from Lender that the interest rate cap provider is no longer an Acceptable Counterparty. (b) Borrower shall collaterally assign to Lender pursuant to the Collateral Assignment of Interest Rate Cap Agreement all of its right, title and interest to receive any and all payments under the Interest Rate Cap Agreement and shall deliver to Lender counterparts of such Collateral Assignment of Interest Rate Cap Agreement executed by Borrower and the Acceptable Counterparty and notify the Acceptable Counterparty of such collateral assignment (either in such Interest Rate Cap Agreement or by separate instrument). At such time as the Loan is repaid in full, all of Lender’s right, title and interest in the Interest Rate Cap Agreement shall terminate and Lender shall execute and deliver at Borrower’s sole cost and expense, such documents as may be required to evidence Lender’s release of the Collateral Assignment of Interest Rate Cap Agreement and to notify the Acceptable Counterparty of such release. (c) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Cap Agreement. All amounts paid by the Acceptable Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall be deposited immediately into an account designated by Lender. Borrower shall take all actions reasonably requested by Lender to enforce Lender’s rights under the Interest Rate Cap Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of its rights thereunder. (d) In the event that Borrower fails to purchase and deliver to Lender the Interest Rate Cap Agreement or any Replacement Interest Rate Cap Agreement as and when required hereunder, or fails to maintain such agreement in accordance with the terms and provisions of this Agreement, Lender may purchase the Interest Rate Cap Agreement or any Replacement Interest Rate Cap Agreement, as applicable, and the cost incurred by Lender in purchasing the Interest Rate Cap Agreement or any Replacement Interest Rate Cap Agreement, as applicable, 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 and any Replacement Interest Rate Cap Agreement, Borrower shall, within a reasonable period of time after the effectiveness of such Interest Rate Cap Agreement or Replacement Interest Rate Cap Agreement, obtain and deliver to Lender (1) a confirmation evidencing such Interest Rate Cap Agreement or Replacement Interest Rate Cap Agreement, (2) any guaranty or guaranties therefor, (3) executed counterparts to the Collateral Assignment of Interest Cap Agreement, and (4) 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 and has the organizational power and authority to execute and deliver, and to perform its obligations under, the Interest Rate Cap Agreement or the Replacement Interest Rate Cap Agreement, as applicable; (ii) the execution and delivery of the Interest Rate Cap Agreement or the Replacement Interest Rate Cap Agreement, as applicable, 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 or the Replacement Interest Rate Cap Agreement, as applicable, 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 or the Replacement Interest Cap Agreement, as applicable, 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 5.24 or elsewhere in this Agreement, if, at any time, Lender converts the Loan from a LIBOR Rate Loan to either a Base Rate Loan or an Alternate Rate Loan in accordance with Section 2.4 above (each, a “LIBOR Conversion”), then within thirty (30) days after such LIBOR Conversion, Borrower shall either (A) enter into, make all payments under, and satisfy all conditions precedent to the effectiveness of, a Substitute Interest Rate Protection Agreement (and in connection therewith, but not prior to Borrower taking all the actions described in this clause (f), Borrower shall have the right to terminate any then-existing Interest Rate Protection Agreement) or (B) cause the then-existing Interest Rate Protection Agreement to be modified such that such then-existing Interest Rate Protection Agreement satisfies the requirements of a Substitute Interest Rate Protection Agreement as set forth below in the definition thereof (a “Converted Interest Rate Protection Agreement”).

  • Interest Rate Protection Agreements The Borrower shall, within 30 days of the Closing Date, have in place interest rate protection agreements, in form and substance acceptable to the Agent, protecting against fluctuations in interest rates which agreements shall provide coverage for a period of three (3) years, and in a notional amount of at least fifty percent (50%) of the outstanding principal amount of the Term Loans.

  • Interest Rate Protection Agreement (a) Prior to or contemporaneously with the Closing Date, Borrower shall enter into an Interest Rate Protection Agreement. The Interest Rate Protection Agreement (i) shall at all times be in a form and substance reasonably acceptable to Administrative Agent (it being agreed that the items in clauses (ii) through (v) below shall not be subject to Administrative Agent approval), (ii) shall at all times be with an Acceptable Counterparty, (iii) shall during the continuance of a Cash Sweep Period direct such Acceptable Counterparty to deposit directly into the Cash Management Account any amounts due Borrower under such Interest Rate Protection Agreement so long as any portion of the Debt exists or any amounts remain due and owing to Administrative Agent or the Lenders, provided that the Debt shall be deemed to exist if the Properties are transferred by judicial or non-judicial foreclosure or deed-in-lieu thereof, (iv) shall be for a term through 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 Administrative Agent, for the benefit of Lenders, pursuant to the Collateral Assignment of Interest Rate Protection Agreement (the “Assignment of Interest Rate Protection Agreement”), all of its right, title and interest to receive any and all payments under the Interest Rate Protection Agreement, and shall deliver to Administrative Agent an executed counterpart of such Interest Rate Protection Agreement (which shall, by its terms, authorize the assignment to Administrative Agent for the benefit of Lenders and require that payments be deposited directly into the Cash Management Account) and shall notify the Acceptable Counterparty of such assignment. (b) Borrower shall comply with all of its obligations under the terms and provisions of the Interest Rate Protection Agreement. All amounts paid by the Acceptable Counterparty under the Interest Rate Protection Agreement to Borrower or Administrative Agent for the benefit of Lenders shall be directly deposited immediately into the Lockbox Account. Borrower shall take all actions reasonably requested by Administrative Agent to enforce Administrative Agent’s rights under the Interest Rate Protection Agreement in the event of a default by the Acceptable Counterparty and shall not waive, amend or otherwise modify any of its 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 either (i) replace or cause the cap provider to replace the Interest Rate Protection Agreement with a Replacement Interest Rate Protection Agreement not later than the period of time provided for in such Interest Rate Protection Agreement following such downgrade, withdrawal or qualification (not to exceed ten (10) Business Days) or (ii) if provided in such Interest Rate Protection Agreement, in the case of such downgrade, withdrawal or qualification of the Rating of such Acceptable Counterparty, cause the Acceptable Counterparty to deliver collateral to secure Borrower’s exposure under the Interest Rate Protection Agreement in such amount and pursuant to such terms as are acceptable to the Administrative Agent. (d) In the event that Borrower fails to purchase and deliver to Administrative Agent the Interest Rate Protection Agreement or fails to maintain the Interest Rate Protection Agreement in accordance with the terms and provisions of this Agreement, Administrative Agent may purchase the Interest Rate Protection Agreement and the cost incurred by Administrative Agent in purchasing such Interest Rate Protection Agreement shall be paid by Borrower to Administrative Agent with interest thereon at the Default Rate from the date such cost was incurred by Administrative Agent until such cost is reimbursed by Borrower to Administrative Agent. (e) In connection with the Interest Rate Protection Agreement, Borrower shall obtain and deliver to Administrative Agent within fifteen (15) Business Days following (x) the date upon which an Interest Rate Protection Agreement is required pursuant to Section 2.2.7(a) or (y) the first day of any applicable Extension Option, as applicable (i) a resolution/consent, as applicable, of the Acceptable Counterparty authorizing the delivery of the Interest Rate Protection Agreement acceptable to Administrative Agent, and (ii) an opinion from counsel (which counsel may be in-house counsel for the Acceptable Counterparty) for the Acceptable Counterparty (upon which Administrative Agent and its successors and assigns for the benefit of Lenders and their 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 Protection Agreement; (ii) the execution and delivery of the Interest Rate Protection 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 Protection 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 Protection 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) At such time as the Loan is repaid in full, all of Administrative Agent’s right, title and interest in and to the Interest Rate Protection Agreement shall terminate and Administrative Agent shall execute and deliver such documents as may be required to evidence Administrative Agent’s release of the Interest Rate Protection Agreement on behalf of Lenders and to notify Acceptable Counterparty of such release.

  • Interest Rate Agreements 13 Investment..................................................................13

  • Interest Rate Risk Management Instruments (a) All interest rate swaps, caps, floors and option agreements and other interest rate risk management arrangements to which the Parent or any of its Subsidiaries is a party or by which any of their properties or assets may be bound were entered into in the Ordinary Course of Business and in accordance with prudent banking practice and applicable rules, regulations and policies of Parent Regulatory Agencies and with counterparties believed to be financially responsible at the time, and are legal, valid and binding obligations enforceable in accordance with their terms (except as may be limited by general principles of equity, whether applied in a court of law or a court of equity, and by bankruptcy, insolvency and similar Laws affecting creditors’ rights and remedies generally), and are in full force and effect. The Parent and each of its Subsidiaries has duly performed in all material respects all of its obligations thereunder to the extent that such obligations to perform have accrued; and, to the Knowledge of the Parent, there are no breaches, violations or defaults or allegations or assertions of such by any party thereunder.