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MASTER REIMBURSEMENT AGREEMENT
DATED AS OF JULY 1, 1996
BY AND BETWEEN
FEDERAL NATIONAL MORTGAGE ASSOCIATION
AND
OTC APARTMENTS LIMITED PARTNERSHIP
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TABLE OF CONTENTS
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ARTICLE I.
DEFINITIONS
SECTION 1.1 General Interpretative Principles. . . . . . . . . . . . . 3
SECTION 1.2 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.3 Interpretation . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 2.1 Representations and Warranties of Owner. . . . . . . . . . 24
SECTION 2.2 Affirmative Covenants of Owner . . . . . . . . . . . . . . 36
SECTION 2.3 Negative Covenants of Owner. . . . . . . . . . . . . . . . 44
SECTION 2.4 Certain Covenants With Respect to Bond Transactions. . . . 46
SECTION 2.5 Certain Covenants With Respect to Village Creek Project. . 46
ARTICLE III.
FEES AND EXPENSES; INDEMNIFICATION
SECTION 3.1 Fees and Expenses. . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.2 Payment of Fees and Expenses . . . . . . . . . . . . . . . 49
SECTION 3.3 Guaranty Fee; Olympiad Project Stand-By Fee;
Eden Crossing Project Stand-By Fee . . . . . . . . . . . . 49
SECTION 3.4 Indemnification. . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.5 Liability of Owner . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.6 Xxxxxx Xxx and Servicer Not Liable . . . . . . . . . . . . 52
SECTION 3.7 Waivers and Consents . . . . . . . . . . . . . . . . . . . 53
SECTION 3.8 Application of Payments. . . . . . . . . . . . . . . . . . 53
SECTION 3.9 Pledge of Rights to Certain Funds and Investments. . . . . 53
SECTION 3.10 Cash Collateral. . . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.11 Nonrecourse Obligations. . . . . . . . . . . . . . . . . . 54
ARTICLE IV.
ALLOCABLE FACILITY AMOUNTS; SUBSTITUTION, RELEASE, AND ADDITION OF PROPERTIES
SECTION 4.1 Allocable Facility Amount; Facility Reduction Credits. . . 57
SECTION 4.2 Substitution of Additional Mortgaged Properties . . . . . 57
SECTION 4.3 Release of Properties. . . . . . . . . . . . . . . . . . . 58
SECTION 4.4 Addition of New Properties to the Credit Facility. . . . . 59
(i)
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SECTION 4.5 Certain Permitted Transfers of Properties. . . . . . . . . 60
SECTION 4.6 Credit Enhancement of Olympiad Project . . . . . . . . . . 62
SECTION 4.7 Certain Permitted Transfers of Ownership Interests . . . . 66
SECTION 4.8 Credit Enhancement of Eden Crossing Project. . . . . . . . 66
ARTICLE V.
SERVICING; REPLACEMENT OF CREDIT ENHANCEMENT
SECTION 5.1 Servicing. . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 5.2 Replacement of Xxxxxx Mae Credit Enhancement . . . . . . . 71
ARTICLE VI.
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1 Events of Default. . . . . . . . . . . . . . . . . . . . . 72
SECTION 6.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE VII.
MISCELLANEOUS
SECTION 7.1 Waivers, Amendments . . . . . . . . . . . . . . . . . . . 77
SECTION 7.2 Survival of Representation and Warranties. . . . . . . . . 77
SECTION 7.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 7.4 Payment Procedure. . . . . . . . . . . . . . . . . . . . . 79
SECTION 7.5 Continuing Obligation. . . . . . . . . . . . . . . . . . . 79
SECTION 7.6 Satisfaction Requirement . . . . . . . . . . . . . . . . . 79
SECTION 7.7 Consent of Xxxxxx Xxx. . . . . . . . . . . . . . . . . . . 79
SECTION 7.8 Governing Law. . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 7.9 Jurisdiction, Consent to Service . . . . . . . . . . . . . 80
SECTION 7.10 Waivers of Jury Trial. . . . . . . . . . . . . . . . . . . 81
SECTION 7.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 7.12 Severability . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 7.13 Business Days. . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 7.14 Entire Agreement . . . . . . . . . . . . . . . . . . . . . 81
SECTION 7.15 Headings . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 7.16 Further Assurances and Corrective Instruments. . . . . . . 82
SECTION 7.17 Assignment; Transfers; Third-Party Rights. . . . . . . . . 82
SECTION 7.18 Waiver of Claims . . . . . . . . . . . . . . . . . . . . . 82
SECTION 7.19 Disclaimer; Acknowledgements . . . . . . . . . . . . . . . 83
SECTION 7.20 Conflicts Between Agreements . . . . . . . . . . . . . . . 83
(ii)
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EXHIBIT A BOND PROPERTIES
EXHIBIT B ADDITIONAL MORTGAGED PROPERTIES
EXHIBIT C SCHEDULE OF TRANSACTION DOCUMENTS
EXHIBIT D PERMITTED LIENS
EXHIBIT E FORM OF NEW PROPERTY CONFIRMATION
EXHIBIT F DIAGRAM OF OWNERSHIP STRUCTURE
EXHIBIT G EXCEPTIONS TO INDEPENDENT UNIT REPRESENTATIONS IN
SECTION 2.1(z)
EXHIBIT H ALLOCABLE FACILITY AMOUNTS AS OF THE XXXXXX MAE
FACILITY CLOSING DATE
EXHIBIT I MANAGEMENT AGREEMENTS
(iii)
MASTER REIMBURSEMENT AGREEMENT
THIS MASTER REIMBURSEMENT AGREEMENT is made and entered into as of this
1st day of July, 1996, by and between FEDERAL NATIONAL MORTGAGE ASSOCIATION
("XXXXXX XXX"), a corporation duly organized and existing under the Federal
National Mortgage Association Charter Act, 12 U.S.C. Section 1716 ET. SEQ.,
and OTC APARTMENTS LIMITED PARTNERSHIP ("OWNER"), a limited partnership duly
organized and existing under the laws of Florida. The meanings of initially
capitalized terms used herein and not defined are set forth in section 1.2.
RECITALS
WHEREAS, Owner owns each of the five (5) multifamily housing projects
described in Exhibit A (the "BOND PROPERTIES"), which Bond Properties are
financed by two existing issues of tax-exempt housing bonds (each an
"EXISTING BOND ISSUE"; and collectively, the "EXISTING BOND ISSUES") in
accordance with two trust indentures (each an "EXISTING BOND INDENTURE"; and
collectively, the "EXISTING BOND INDENTURES");
WHEREAS, each of the Existing Bond Issues is supported by one or more
first priority mortgages (the "EXISTING SECURITY INSTRUMENT") and one or more
mortgage notes secured by the related Existing Security Instrument (such
note, the "EXISTING MORTGAGE NOTE");
WHEREAS, the Issuer with respect to the Existing Bond Issue relating to
the Bond Properties identified on Exhibit A as Sunchase East Apartments,
Orlando, Florida, Sunchase North Apartments, Orlando, Florida, Sunchase
Eastbay Apartments, Clearwater, Florida and Sunchase Tampa Apartments, Tampa,
Florida (the "FHFA BOND PROPERTIES") has received a request from Owner to
consent to (i) the replacement of the existing credit enhancement and (ii)
the current remarketing with respect to such Existing Bond Issue pursuant to
the terms of the Related Act and the Existing Indenture with respect to the
FHFA Bond Properties;
WHEREAS, on or immediately prior to the Xxxxxx Mae Facility Closing Date
(as defined below), the Existing Bond Issue with respect to the FHFA Bond
Properties will be purchased at the direction of the related Issuer and the
bonds with respect to such Existing Bond Issue (the "REMARKETED BONDS") shall
be remarketed pursuant to the Related Indenture (as defined below);
WHEREAS, the Issuer with respect to the Existing Bond Issue relating to
the Bond Property identified on Exhibit A as Boardwalk Apartments, Tamarac,
Florida (the "BOARDWALK BOND PROPERTY") has received a request from Owner to
issue new bonds under the Related Act in order to refinance the Boardwalk
Bond Property by the current refunding of the Existing Bond Issue with
respect thereto;
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WHEREAS, on or immediately prior to the Xxxxxx Xxx Facility Closing Date
(as defined below), the Existing Bond Issue with respect to the Boardwalk
Bond Property will be repaid and new bonds (the "NEW BONDS") will be issued
pursuant to the Related Indenture;
WHEREAS, the Existing Security Instruments and Existing Mortgage Notes
with respect to the Remarketed Bonds will be assigned by the holder hereof to
the Issuer of the Remarketed Bonds and amended and restated (as so amended
and restated, the "RESTATED SECURITY INSTRUMENTS" and the "RESTATED NOTES");
WHEREAS, the Existing Security Instrument and Existing Mortgage Note
with respect to New Bonds will be terminated and released by the holder
thereof and Owner will grant the Issuer with respect to the New Bonds a new
note (the "NEW NOTE") secured by a new mortgage (the "NEW SECURITY
INSTRUMENT") incumbering such Bond Property;
WHEREAS, the Restated Security Instruments, the Restated Notes, the New
Note and the New Security Instrument, together with certain other collateral,
will be assigned by each Issuer to the Servicer (as defined below) and
thereafter further assigned by the Servicer to Xxxxxx Xxx;
WHEREAS, each Issuer has determined that the remarketing or issuance, as
the case may be, of the Bonds and the application of the proceeds thereof to
fund the Mortgage Loans will promote and serve the intended purposes of, and
in all respects will conform to the provisions and requirements of, the
Related Acts;
WHEREAS, each Mortgage Loan will be (a) made in accordance with the
requirements of Xxxxxx Mae and the Issuer with respect to such Mortgage Loan,
(b) evidenced by the Related Mortgage Note, (c) secured by the one or more
Related Bond Mortgages, and (d) otherwise secured by the other Related Bond
Documents;
WHEREAS, Xxxxxx Xxx has agreed to provide credit enhancement for the
Bonds pursuant to and in accordance with the terms of the Related Xxxxxx Mae
Pass-Through Certificates issued to the Related Trustees;
WHEREAS, Owner owns each of the five (5) multifamily housing projects
described in Exhibit B (the "ADDITIONAL MORTGAGED PROPERTIES");
WHEREAS, in consideration of Xxxxxx Xxx agreeing to issue the Related
Xxxxxx Mae Pass-Through Certificates and in order to further evidence and
secure Owner's obligations to Xxxxxx Xxx, Owner has agreed, among other
things: (i) to xxxxx Xxxxxx Mae second priority Security Instruments on the
Bond Properties; (ii) to xxxxx Xxxxxx Xxx first priority Security
Instruments on the Additional Mortgaged Properties; (iii) to xxxxx Xxxxxx
Mae security interests in certain cash collateral; (iv) to pay certain fees
to Xxxxxx Xxx; and (v) to reimburse Xxxxxx Mae for amounts otherwise advanced
in accordance with this Agreement and the other Transaction Documents; and
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WHEREAS, it is a condition to the execution and delivery of the Related
Xxxxxx Xxx Pass-Through Certificates by Xxxxxx Mae that Owner enter into this
Agreement.
NOW THEREFORE, in consideration of the mutual covenants and undertakings
set forth herein, the payment of certain fees to Xxxxxx Xxx, and other good
and valuable consideration, the receipt and sufficiency of which are
acknowledged by Xxxxxx Mae and Owner, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1 GENERAL INTERPRETATIVE PRINCIPLES.
For purposes of this Agreement, except as otherwise provided or unless
the context otherwise requires:
(a) the terms defined in section 1.2 have the meanings assigned to them
in section 1.2 and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(c) references herein to "sections," "subsections," "paragraphs" and
other subdivisions without reference to a document are to designated
sections, subsections, paragraphs and other subdivisions of this Agreement;
(d) a reference to a subsection without further reference to a section
is a reference to such subsection as contained in the same section in which
the reference appears, and this rule shall also apply to paragraphs and other
subdivisions;
(e) a reference to an Exhibit or a Schedule without a further reference
to the document to which the Exhibit or Schedule is attached is a reference
to an Exhibit or Schedule to this Agreement;
(f) a reference to Xxxxxx Xxx forms, guides, memos, updates or
announcements shall mean such Xxxxxx Mae forms, guides, memos, updates or
announcements as the same may be amended, supplemented, otherwise modified,
superseded or replaced from time to time;
(g) the words "attorneys' fees and expenses," "legal fees and expenses,"
"attorneys' fees and costs," "attorneys' fees and court costs," and other
words of similar import are deemed to include any actual costs and expenses
incurred by Xxxxxx Mae's in-house counsel;
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(h) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(i) the word "including" means "including, but not limited to."
SECTION 1.2 DEFINED TERMS.
For all purposes of this Agreement, the following terms shall have
the respective meanings set forth below:
"ADDITIONAL MORTGAGED PROPERTIES" means the real properties, together
with the improvements and fixtures located thereon, described in Exhibit B.
"ADDITIONAL MORTGAGED PROPERTIES" shall also include each New Additional
Property from and after the date of its addition to the Xxxxxx Mae Credit
Facility, and shall exclude each Released Property (which prior to such
substitution or release, as applicable, was an Additional Mortgaged
Property), from and after the date of such substitution or release.
"ADDITIONAL MORTGAGED PROPERTY" means any one of the foregoing, individually.
"AFFILIATE", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of
voting securities, partnership interests or by contract or otherwise.
"AGGREGATE DEBT SERVICE COVERAGE RATIO" means, at any time, the ratio of
(a) the aggregate of the Net Operating Income for the applicable period for
all of the Properties, to (b) the aggregate scheduled debt service due on all
of the Mortgage Loans for the applicable period.
"AGGREGATE FACILITY AMOUNT" means at any time the total amount of all
Facility Amounts.
"AGREEMENT" means this Master Reimbursement Agreement, as amended,
supplemented,or otherwise modified or amended and restated from time to time
in accordance with its terms.
"ALLOCABLE FACILITY AMOUNT" means the portion of the Aggregate Facility
Amount allocated to a particular Property by Xxxxxx Xxx in accordance with
section 4.1.
"ALLOCATED FACILITY REDUCTION CASH COLLATERAL" means, with respect to
each Bond Property, the portion of the aggregate amount of all Facility
Reduction Cash Collateral allocable to such Bond Property on a pro rata
basis, as determined by Xxxxxx Mae in its discretion.
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"ALTERATIONS" shall mean the meaning given to such term in section
2.2(o).
"AIMCO OP" means AIMCO Properties, L.P., a Delaware limited
partnership.
"AIMCO OP PARTNERSHIP AGREEMENT" shall have the meaning given to that
term in section 2.1(a).
"AIMCO OP PARTNERSHIP CERTIFICATE" shall have the meaning given to that
term in section 2.1(a).
"AIMCO OP ORGANIZATIONAL DOCUMENTS" shall have the meaning given to that
term in section 2.1(a).
"AIMCO REIT" means Apartment Investment and Management Company, a
Maryland corporation.
"APPLICABLE LAW" means (a) all applicable provisions of all
constitutions, statutes, rules, regulations and orders of all governmental
bodies, all Governmental Approvals and all orders, judgments and decrees of
all courts and arbitrators, (b) all zoning, building, environmental and other
laws, ordinances, rules, regulations and restrictions of any Governmental
Authority affecting the ownership, management, use, operation, maintenance or
repair of any Property, including the Americans with Disabilities Act (if
applicable), the Fair Housing Amendment Act of 1988 and Hazardous Materials
Laws, (c) any building permits or any conditions, easements, rights-of-way,
covenants, restrictions of record or any recorded or unrecorded agreement
affecting or concerning any Property including planned development permits,
condominium declarations, and reciprocal easement and regulatory agreements
with any Governmental Authority, (d) all laws, ordinances, rules and
regulations, whether in the form of rent control, rent stabilization or
otherwise, that limit or impose conditions on the amount of rent that may be
collected from the units of any Property, and (e) all terms of any insurance
policy that Owner is required to maintain under the Mortgages, all
requirements of the issuers of any such policy, and all orders, rules,
regulations and other requirements of the National Board of Fire Underwriters
(or any body exercising similar functions) applicable to or affecting the
operation or use of any Property or the consummation of the transactions to
be effected by this Agreement or any of the other Transaction Documents.
"ASSIGNMENT" means, individually, any assignment of mortgage with
respect to a Bond Property by the related Issuer to the Servicer and any
subsequent assignment of mortgage by the Servicer to Xxxxxx Xxx, as each such
assignment may be amended, supplemented or, otherwise modified or amended and
restated from time to time in accordance with its terms. "ASSIGNMENTS" means
every such Assignment, collectively.
"ASSIGNMENT OF MANAGEMENT AGREEMENT" means, individually, any Assignment
of Management Agreement with respect to a Property by the Owner and AIMCO OP
for the benefit of Xxxxxx Mae, as such assignment may be amended,
supplemented or, otherwise modified or
5
amended and restated from time to time in accordance with its terms.
"ASSIGNMENTS OF MANAGEMENT AGREEMENTS" means every such Assignment of Management
Agreement, collectively.
"BOARDWALK BOND PROPERTY" shall have the meaning given that term in the
recitals to this Agreement.
"BOND DOCUMENTS" means, collectively, the Related Bond Documents for all
Bond Properties, together with all other documents, instruments and
agreements, that may evidence, secure or otherwise relate to this Agreement,
as each such document, agreement or instrument may be amended, supplemented,
otherwise modified or amended and restated from time to time in accordance
with its respective terms, and "BOND DOCUMENT" means any one of the
foregoing, individually.
"BOND FEES" shall have the meaning given that term in section 3.2(a).
"BONDHOLDERS" with respect to any Related Bonds shall have the meaning
given that term in the Related Indenture.
"BOND MORTGAGE" means the first priority Security Instrument on each
Bond Property securing the obligations of Owner under and with respect to the
Related Mortgage Note and the related Mortgage Loan, and "BOND MORTGAGES"
means every such Bond Mortgage, collectively.
"BOND PROPERTIES" means the real properties, together with the
improvements and fixtures located thereon, described in Exhibit A. "BOND
PROPERTIES" shall also include each New Bond Property from and after the date
of its addition to the Xxxxxx Xxx Credit Facility, and shall exclude each
Released Property (which prior to its substitution or release, as applicable,
was a Bond Property), from and after the date of such substitution or
release. "BOND PROPERTY" means any one of the foregoing, individually.
"BOND PROPERTY LOAN DOCUMENT" means, with respect to a Mortgage Loan,
any of the documents, agreements or instruments granting, evidencing or
securing such Mortgage Loan, including the Related Mortgage Note, the Related
Mortgages, the title policy, UCC fixture filings and UCC financing statements
(in each case relating to such Mortgage Loan) and the assignment, if any, of
such Mortgage Loan by the prior holder thereof to the related Issuer, the
Assignments of such Mortgage Loan to the Servicer and Xxxxxx Mae, as each
such document, agreement or instrument may be amended, supplemented,
otherwise modified or amended and restated from time to time in accordance
with its respective terms, and "BOND PROPERTY LOAN DOCUMENTS" means every
such Bond Property Loan Document with respect to such Mortgage Loan,
collectively.
"BONDS" means, collectively, the Related Bonds with respect to all
Mortgage Loans.
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"BOND TRANSACTION CLOSING DATE", with respect to each issue of Related
Bonds, shall mean the date the Related Bonds are issued and paid for.
"BUSINESS DAY" means any day other than a Saturday, Sunday, a day on
which the principal office of Xxxxxx Xxx is not open for business, a day on
which banks located in the city in which any Related Trustee is located are
authorized or obligated by law or executive order to close, or a day on which
the New York Stock Exchange is closed.
"CASH COLLATERAL" shall have the meaning given to the term "COLLATERAL"
in the Cash Management Agreement.
"CASH MANAGEMENT AGREEMENT" means, with respect to all Properties, that
certain Cash Management, Security, Pledge and Assignment Agreement of even
date herewith, among Owner, Xxxxxx Mae and Servicer, as such agreement may be
amended, supplemented, otherwise modified or amended and restated from time
to time in accordance with its terms.
"CASUALTY", with respect to any Property, means any damage to, or
destruction or loss of, all or any portion of the Property, whether by fire
or other cause.
"CENTRAL ACCOUNT" means, the Central Account identified in the Cash
Management Agreement.
"CODE" means the Internal Revenue Code of 1954, as amended (herein the
"1954 CODE" and the Internal Revenue Code of 1986), as amended (herein the
"1986 CODE"), in each case to the extent made applicable to matters relating
to the Bonds and the Project by Section 1313(a) of the Tax Reform Act of
1986, and with respect to a specific section thereof such reference shall be
deemed to include (a) the applicable regulations promulgated or proposed
under such section or any previous corresponding section, (b) any successor
provision of similar import hereafter enacted, (c) any corresponding
provision of any subsequent Internal Revenue Code and (d) the applicable
regulations promulgated or proposed under the provisions described in (b) and
(c).
"COLLATERAL" means all cash, Government Obligations, assets and
property, real and personal (including the Bond Properties, the Additional
Mortgaged Properties, the Property Accounts, the Central Account, the Cash
Collateral, Facility Reduction Cash Collateral, the Replacement Reserve
Accounts and all funds contained in such accounts), pledged by Owner pursuant
to any Bond Document or any Mortgage Document or any other Transaction
Document and the Proceeds thereof.
"CONDEMNATION", with respect to any Property, means (a) any action or
proceeding for the taking of the Property, or any part thereof or interest
therein, for public or quasi-public use under the power of eminent domain, by
reason of any public improvement or condemnation proceeding, or in any other
similar manner or (b) the conveyancing of any Property under the threat or
contemplation of any action or proceeding described in clause (a).
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"CONDEMNATION PROCEEDS" means the proceeds of any Condemnation.
"CONTINGENT OBLIGATION" as to any Person (the "GUARANTEEING PERSON"),
means any obligation (a) of the guaranteeing person or (b) of another Person
(including any bank under any letter of credit) and with respect to which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case, guaranteeing or in effect guaranteeing any
indebtedness, leases, dividends or other obligations (the "PRIMARY
OBLIGATIONS") of any other third person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly. By way of example the term
"Contingent Obligation" shall include (without duplication) any obligation of
the guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of
any such primary obligation or (2) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation, or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; PROVIDED,
HOWEVER, that the term Contingent Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of business.
The amount of any Contingent Obligation of any guaranteeing person shall be
deemed to be the lesser of (a) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent
Obligation is made and (b) the maximum amount for which such guaranteeing
person may be liable pursuant to the terms of the instrument embodying such
Contingent Obligation, unless such primary obligation and the maximum amount
for which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Contingent Obligation shall be
such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by Owner in good faith.
"CONTROLLED GROUP" means all members of a group of corporations and all
trades or businesses (whether or not incorporated) under common control
which, together with Owner, are treated as a single employer under Section
414 of the Code.
"DETERMINATION DATE" means the first (1st) day of October of each year
during the term of this Agreement.
"DUS GUIDE" means the Xxxxxx Xxx Multifamily Delegated Underwriting and
Servicing (DUS) Guide, as such DUS Guide may be amended, supplemented or
otherwise modified from time to time, including by Lender Memos, Guide
Updates and Guide Announcements (all references to Parts, Chapters, Sections
and other subdivisions of the DUS Guide shall be deemed references to (a) the
Parts, Chapters, Sections and other subdivisions in effect on the Xxxxxx Mae
Facility Closing Date and (b) any successor provisions to such Parts,
Chapters, Sections and other subdivision).
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"EDEN CROSSING BONDS" means an issue of tax exempt housing finance bonds
issued by the issuer with respect to the Eden Crossing Bond Transaction in
order to refinance (by repurchase and a subsequent remarketing pursuant to an
amended and restated trust indenture and related bond documents) or refund
(by the issuance of new refunding bonds) the existing bond financing with
respect to the Eden Crossing Project.
"EDEN CROSSING BOND TRANSACTION" shall have the meaning given to such
term in section 4.8.
"EDEN CROSSING CLOSING DATE" shall have the meaning given to such term
in section 4.8.
"EDEN CROSSING COMMITMENT TERMINATION DATE" shall have the meaning given
to such term in section 4.8.
"EDEN CROSSING CREDIT ENHANCEMENT" shall have the meaning given to such
term in section 4.8.
"EDEN CROSSING MORTGAGE LOAN" shall have the meaning given to such term
in section 4.8.
"EDEN CROSSING PROJECT" shall have the meaning given to such term in
section 4.8.
"EDEN CROSSING REFUNDING DOCUMENTS" shall have the meaning given to such
term in section 4.8.
"EDEN CROSSING SUBSTITUTION TRANSACTION" shall have the meaning given to
such term in section 4.8.
"EDEN CROSSING STAND-BY FEE" shall have the meaning given to such term
in section 3.3(c).
"ENVIRONMENTAL CLAIM" means any notice of violation, claim, demand,
abatement, order or other order or direction (conditional or otherwise) by
any person or entity for any damage, including personal injury (including
sickness, disease or death), tangible or intangible property damage,
contribution, indemnity, indirect or consequential damages, damage to the
environment, pollution, contamination or other adverse effects on the
environment, removal, cleanup or remedial action or for fines, penalties or
restrictions, resulting from or based upon (a) the existence or occurrence,
or the alleged existence or occurrence, of a Hazardous Substance Activity or
(b) the violation, or alleged violation, of any Hazardous Materials Laws in
connection with any Property.
"ENVIRONMENTAL REPORTS" means any Phase I environmental report meeting
the requirements of the DUS Guide, and any additional environmental report
delivered to Servicer or Xxxxxx Xxx with respect to any Property.
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"ERISA" means the Employee Retirement Income Security Act of 1974 as
amended from time to time.
"EVENT OF DEFAULT" shall have the meaning given that term in section 6.1.
"EXISTING BOND ISSUES" shall have the meaning given that term in the
recitals to this Agreement.
"EXISTING BOND INDENTURE" and "EXISTING BOND INDENTURES" shall have the
respective meanings given such terms in the recitals to this Agreement.
"EXISTING MORTGAGE NOTE" and "EXISTING MORTGAGE NOTES" shall have the
respective meanings given such terms in the recitals to this Agreement.
"EXISTING SECURITY INSTRUMENT" and "EXISTING SECURITY INSTRUMENTS" shall
have the respective meanings given such terms in the recitals to this
Agreement.
"FACILITY", with respect to particular Related Bonds, means the credit
enhancement of such Related Bonds by Xxxxxx Mae, subject and pursuant to the
Related Xxxxxx Xxx Pass-Through Certificate.
"FACILITY AMOUNT", with respect to particular Related Bonds, means the
aggregate principal amount of such Related Bonds then outstanding.
"FACILITY REDUCTION CASH COLLATERAL" shall have the meaning given that
term in section 4.3(a).
"FACILITY REDUCTION CREDIT" shall have the meaning given that term in
section 4.1(b).
"XXXXXX MAE CREDIT FACILITY" means the credit enhancement provided by
Xxxxxx Xxx subject and pursuant to the Related Xxxxxx Mae Pass-Through
Certificates.
"XXXXXX XXX FACILITY CLOSING DATE" means July 3, 1996.
"FHFA BOND PROPERTIES" shall have the meaning given that term in the
recitals to this Agreement.
"FINANCING AGREEMENT", with respect to an issue of Related Bonds, shall
have the meaning given that term in the Related Indenture and "FINANCING
AGREEMENTS" means every such Financing Agreement, collectively.
"FINANCING LEASE" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee or to be otherwise
disclosed as such in a note to such balance sheet.
10
"GAAP" means generally accepted accounting principles in effect in the
United States from time to time.
"GENERAL PARTNER" means AIMCO/OTC QRS, Inc., a Delaware corporation.
"GENERAL PARTNER ARTICLES OF INCORPORATION" shall have the meaning given
to that term in section 2.1(a).
"GENERAL PARTNER ORGANIZATIONAL DOCUMENTS" shall have the meaning given
to that term in section 2.1(a).
"GOVERNMENT OBLIGATIONS", with respect to an issue of Related Bonds,
shall have the meaning given that term in the Related Indenture.
"GOVERNMENTAL ACTION" means any pending or, to the actual knowledge of
Owner, threatened suit, proceeding, order, or governmental inquiry or opinion
involving any Property that alleges the violation of any Hazardous Materials
Law.
"GOVERNMENTAL APPROVAL" means an authorization, permit, consent,
approval, license, registration or exemption from registration or filing
with, or report to, any Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GROSS CASH FLOW" means, for any period, with respect to any of the
Properties, all gross rents collected from or on behalf of tenants at such
Property (other than unforfeited tenant security deposits), any other income,
receipts or reserves (but only to the extent such reserves were included as
Operating Expenses at the times they were set aside) derived from such
Property (including from the use or operation thereof) without regard to its
source, INCLUDING tenant reimbursements for utilities, services and supplies,
security deposit forfeitures, parking rents or fees, concessions and vending
fees and laundry income and proceeds from rental interruption insurance, BUT
EXCLUDING Insurance Proceeds (other than proceeds from rental interruption
insurance), Condemnation Proceeds, proceeds from the sale of the Related
Bonds, if any, unearned portion of prepaid rent, other refundable items,
interest on any account established for the deposit of refundable items, and
proceeds from the sale or other disposition of all or any portion of a
Property.
"GUARANTY" means each Payment Guaranty of even date herewith executed by
a Guarantor for the benefit of Xxxxxx Xxx, as it may be amended,
supplemented, otherwise modified or amended and restated from time to time in
accordance with its terms, and "GUARANTIES" means every such Guaranty,
collectively.
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"GUARANTOR" either AIMCO REIT or AIMCO OP individually, and "GUARANTORS"
means each such Guarantor, collectively.
"HAZARDOUS MATERIALS" means petroleum and petroleum products, flammable
explosives, radioactive materials (excluding radioactive materials in smoke
detectors), polychlorinated biphenyls, lead, asbestos in any form that is or
could become friable, hazardous waste, toxic or hazardous substances or other
related materials whether in the form of a chemical, element, compound,
solution, mixture or otherwise and shall also include those materials defined
as "hazardous substances," "extremely hazardous substances," "hazardous
chemicals," "hazardous materials," "toxic substances," "solid waste," "toxic
chemicals," "air pollutants," "toxic pollutants," "hazardous wastes,"
"extremely hazardous waste," or "restricted hazardous waste" by Hazardous
Materials Law or regulated by Hazardous Materials Law in any manner
whatsoever.
"HAZARDOUS MATERIALS LAW" means all federal, state, and local laws,
ordinances and regulations and standards, rules, policies and other binding
governmental requirements and any court judgments applicable to Owner or any
Property relating to industrial hygiene or to environmental or unsafe
conditions or to human health including, those relating to the generation,
manufacture, storage, handling, transportation, disposal, release, emission
or discharge of Hazardous Materials, those in connection with the
construction, fuel supply, power generation and transmission, waste disposal
or any other operations or processes relating to any Property, and those
relating to the atmosphere, soil, surface and ground water, wetlands. stream
sediments and vegetation on, under, in or about any Property.
"HAZARDOUS SUBSTANCE ACTIVITY" means any storage, holding, existence,
release, spill, leaking, pumping, pouring, injection, escaping, deposit,
disposal, dispersal, leaching, migration, use, treatment, emission, discharge,
generation, processing, abatement, removal, disposition, handling or
transportation of any Hazardous Materials from, under, into or on any
Property in violation of Hazardous Materials Laws, including the discharge of
any Hazardous Materials emanating from any Property in violation of Hazardous
Materials Laws through the air, soil, surface water, groundwater or property
and also including the abandonment or disposal of any barrels, containers
and other receptacles containing any Hazardous Materials from or on any
Property in violation of Hazardous Materials Laws, in each case whether
sudden or nonsudden, accidental or nonaccidental.
"IMPOSITIONS" means, with respect to any Property, all real estate and
personal property taxes, water, sewer and vault charges and all other taxes,
levies, assessments, common charges and other similar charges, general and
special, ordinary and extraordinary, foreseen and unforeseen, of every kind
and nature whatsoever, which at any time prior to, at or after the execution
of this Agreement may be assessed, levied or imposed by, in each case, a
Governmental Authority or any other Person upon such Property or the rents or
the ownership, use, occupancy or enjoyment thereof, and any interest, costs
or penalties with respect to any of the foregoing.
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"INDEBTEDNESS" of any Person at any date means, without duplication, (a)
all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices), (b) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument; (c) all
obligations of such Person under Financing Leases, (d) all obligations of
such person in respect of acceptances issued or created for the account of
such Person, (e) all liabilities secured by any Lien on any property owned by
such Person even though such Person has not assumed or otherwise become
liable for the payment thereof, and (f) all Contingent Obligations.
"INSURANCE PROCEEDS" means, with respect to any Property, all insurance
proceeds, damages, claims and rights of action and the right thereto under
any insurance policies with respect to a Casualty insuring and relating to
any portion of such Property.
"ISSUER" means the issuer with respect to an issue of Related Bonds, and
"ISSUERS" means every such Issuer, collectively. As of the date hereof, the
Issuer with respect to each issue of Related Bonds is listed on Exhibit A.
"LEASE" means any lease, any sublease or subsublease, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in any
Property, and every modification, amendment or other agreement relating to
such lease, sublease, subsublease or other agreement entered into in
connection with such lease, sublease, subsublease or other agreement, and
every guarantee of the performance and observance of the covenants,
conditions and agreements to be performed and observed by the other party
thereto.
"LIABILITIES" shall have the meaning set forth in section 3.4(a).
"LIEN" means any mortgage, deed of trust, deed to secure debt, charge
(whether fixed or floating), pledge, lien, encumbrance, assignment,
hypothecation, security interest, conditional sale, capital lease or other
title retention, preferential right, trust arrangement or any other
encumbrance, security agreement or arrangement securing any obligation of any
Person.
"LOAN TO VALUE RATIO" means, at any time, the ratio (expressed as a
percentage) of (a) the Aggregate Facility Amount to (b) the aggregate of the
Values for all of the Properties.
"MANAGEMENT AGREEMENTS" each of the Management Agreements identified on
Exhibit I, collectively.
"MATERIAL ADVERSE EFFECT" means any circumstance, act, condition or
event of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, or circumstance or circumstances, whether or not
related,
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that could reasonably be expected to have a material adverse change in or
a materially adverse effect upon any of (a) the business, operations,
property or condition (financial or otherwise) of Owner, General Partner
or AIMCO OP, (b) the present or future ability of Owner to perform the
Obligations, (c) the validity, priority, perfection or enforceability of
this Agreement or any other Transaction Document or the rights or
remedies of Xxxxxx Mae under any Transaction Document, or (d) the value
of, or Xxxxxx Mae's ability to have recourse against, any Property.
"MINIMUM SUBSTITUTE PROPERTY VALUE" means, with respect to each Released
Property, the Allocable Facility Amount for such Released Property divided by
.6940.
"XXXXX'X INVESTORS SERVICE" means Xxxxx'x Investors Service, Inc., a
corporation organized and existing under the laws of the State of Delaware,
and its successors and assigns, if such successors and assigns shall continue
to perform the functions of a securities rating agency.
"MORTGAGE" means any Bond Mortgage and any Reimbursement Mortgage,
individually, and "MORTGAGES" means every such Mortgage, collectively.
"MORTGAGE" shall include any Security Instrument in favor of Xxxxxx Mae or a
Related Trustee on any New Property from and after the date of its addition
to the Xxxxxx Xxx Credit Facility, and shall exclude any Mortgage on a
Released Property released from the lien of such Mortgage, from and after the
date of release.
"MORTGAGE DOCUMENTS" means, collectively, the Bond Property Loan
Documents for all of the Bond Properties and the Reimbursement Loan Documents.
"MORTGAGE LOAN" with respect to an issue of Related Bonds, shall have
the meaning given that term in the Related Indenture, and "MORTGAGE LOANS"
shall mean every such Mortgage Loan, collectively.
"MORTGAGE NOTES" means every Related Mortgage Note, collectively.
"MORTGAGE NOTE RATE", with respect to a Related Mortgage Note, shall be
the interest rate payable under such Related Mortgage Note.
"MULTIFAMILY RESIDENTIAL PROPERTY" means a residential property
containing five or more dwelling units in which not more than twenty percent
(20%) of the net rentable area is or will be rented to non-residential
tenants.
"NET OPERATING INCOME" means, for any period, with respect to any of the
Properties, the amount, if any, without duplication, by which the Gross Cash
Flow for such Property during such period exceeds the Operating Expenses for
such Property during such period.
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"NEW ADDITIONAL PROPERTY" means a Multifamily Residential Property
substituted for an Additional Mortgaged Property pursuant to section 4.2 or
otherwise added to the Xxxxxx Xxx Credit Facility by Owner as Collateral for
the Obligations.
"NEW BOND PROPERTY" means a Multifamily Residential Property substituted
for a Bond Property pursuit to section 4.2 or otherwise added to the Xxxxxx
Mae Credit Facility in connection with Xxxxxx Mae's issuance of a new Related
Xxxxxx Mae Pass-Through Certificate.
"NEW BONDS" shall have the meaning given that term in the recitals to
this Agreement.
"NEW NOTE" shall have the meaning given that term in the recitals to
this Agreement.
"NEW PROPERTY" means a New Additional Property or a New Bond Property.
"NEW PROPERTY CONFIRMATION" shall have the meaning given that term in
section 4.4.
"NEW SECURITY INSTRUMENT" shall have the meaning given that term in the
recitals to this Agreement.
"OBLIGATIONS" means the obligations of Owner (i) to pay principal,
interest and fees and any other amounts on the Mortgage Loans when due and
payable, (ii) to make all required deposits into the Replacement Reserve
Accounts, the Central Account, the Property Accounts and any and all other
loan funds, escrow funds, revenue funds, debt service funds, reserve funds,
redemption funds or other funds or accounts required to be maintained under
the Transaction Documents, (iii) to reimburse Xxxxxx Xxx and Servicer for all
Reimbursable Advances and for all other sums advanced and costs and expenses
incurred by Xxxxxx Mae and Servicer in accordance with the terms of this
Agreement or any other Transaction Document, (iv) to pay all other amounts
payable under the Transaction Documents, and (v) to observe and perform each
of the terms, conditions and provisions of the Transaction Documents.
"OFFICIAL STATEMENT" means the Official Statement or any reoffering,
remarketing circular or informational document approved by Owner and issued
in connection with the issuance or remarketing of an issue of Related Bonds,
as such statement may be amended, supplemented, otherwise modified or amended
and restated from time to time in accordance with its terms, and "OFFICIAL
STATEMENTS" means every such Official Statement, collectively.
"OLYMPIAD COMMITMENT TERMINATION DATE" shall have the meaning given to
such term in section 4.6.
"OLYMPIAD CREDIT ENHANCEMENT" shall have the meaning given to such term
in section 4.6.
"OLYMPIAD BOND TRANSACTION" shall have the meaning given to such term in
section 4.6.
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"OLYMPIAD MORTGAGE LOAN" shall have the meaning given to such term in
section 4.6.
"OLYMPIAD PROJECT" shall have the meaning given to such term in
section 4.6.
"OLYMPIAD REFUNDING BONDS" means an issue of tax exempt housing finance
bonds issued by the issuer with respect to the Olympiad Bond Transaction in
order to refinance (by repurchase and a subsequent remarketing pursuant to an
amended and restated trust indenture and related bond documents) or refund
(by the issuance of new refunding bonds) the existing bond financing with
respect to the Olympiad Project.
"OLYMPIAD REFUNDING CLOSING DATE" shall have the meaning given to such
term in section 4.6.
"OLYMPIAD REFUNDING DOCUMENTS" shall have the meaning given to such term
in section 4.6.
"OLYMPIAD STAND-BY FEE" shall have the meaning given to such term in
section 3.3(b).
"OPERATING EXPENSES" means, for any period, with respect to any of the
Properties, the aggregate of all direct, ordinary, normal, recurring and
necessary expenses thereof including, without duplication, (a) Impositions,
(b) property and liability insurance premiums, (c) wages, salaries and
benefits of personnel employed on site to manage, lease, maintain and operate
such Property, (d) costs or expenses of utility services to such Property and
tenant spaces to the extent payable by Owner, (e) costs or expenses of
providing security services to such Property, if any, (f) costs or expenses
of in-house or outside service arrangements for landscaping, janitorial,
window washing and cleaning, trash, debris, make ready units, cable and
satellite television and other services, (g) expenses of maintaining,
repairing and cleaning the grounds, parking, amenities, exterior and interior
spaces of such Property, (h) expenses of repairing and maintaining in good
operable condition the mechanical, structural, electrical, elevator, heating,
ventilating, air conditioning and plumbing systems, (i) property management
fees payable to parties other than Owner, (j) administrative expenses
including advertising incurred at the site of such Property, (k) legal fees
associated with lease documentation and tenant matters and legal, accounting
and other professional fees relating to the operation of the Properties, (l)
(for all purposes hereunder other than the calculation of Value) the
replacement and repair amount with respect to such Property, (m) costs for
water and sewage fees, and (n) any other items that are treated as noncapital
expenses under GAAP. All of the foregoing (including Impositions) shall be
computed on an accrual basis and in accordance with GAAP consistently
applied. For the purposes of calculating Value and/or Net Operating Income,
the management fees included in Operating Expenses with respect to each
Property shall be equal to the greater of four percent (4%) of the Gross Cash
Flow of such Property or the actual fees payable under the terms of the
Management Agreements approved by Xxxxxx Xxx. In addition, for all purposes
Operating Expenses shall exclude (i) payments on the Obligations and any
other interest payments or principal payments on any Indebtedness, (ii)
depreciation and amortization, (iii) all legal, accounting and professional
fees not included in clause (iv) above, and (v) items that would be
16
treated as capital expenses under GAAP consistently applied and calculated in
accordance with Xxxxxx Mae Form 4254.
"OWNER" means OTC APARTMENTS LIMITED PARTNERSHIP, a Florida limited
partnership.
"OWNER PARTNERSHIP AGREEMENT" shall have the meaning given to that term
in section 2.1(a).
"OWNER PARTNERSHIP CERTIFICATE" shall have the meaning given to that
term in section 2.1(a).
"OWNER'S DATE-DOWN CERTIFICATE" shall have the meaning given to that
term in section 4.6.
"OWNER'S ORGANIZATIONAL DOCUMENTS" shall have the meaning given that
term in section 2.1(a).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITS" means all permits, or similar licenses or approvals issued
and/or required by an applicable Governmental Authority or any Applicable Law
in connection with the ownership, use, occupancy, leasing, management,
operation, repair, maintenance or rehabilitation of any Property or Owner's
business.
"PERMITTED LIENS" means, with respect to each Property, (i) exceptions
to title contained in the marked-up title insurance commitments insuring the
lien of the Mortgage with respect to such Property (other than notes or other
informational items set forth therein) listed on Exhibit D; (ii) Liens
created by, or permitted by, the applicable Mortgage Documents and the Bond
Documents with respect to such Property; (iii) Liens created by the Leases
with respect to such Property; and (iv) Liens approved by Xxxxxx Xxx.
"PERMITTED TRANSFER" shall have the meaning given that term in section
4.5.
"PERSON" means an individual, an estate, a trust, a corporation, a
partnership, a limited liability company or any other organization or entity
(whether governmental or private).
"PLAN" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
agreement under which more than one employer makes contributions and to which
a member
17
of the Controlled Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions.
"POTENTIAL EVENT OF DEFAULT" means any of the events specified in
section 6.1 which with the passage of time or giving of notice or both would
constitute an Event of Default.
"PREPAYMENT PREMIUM", with respect to Mortgage Loan shall have the
meaning given the term "prepayment premium" in the Related Mortgage Note.
"PROCEEDS" mean all "proceeds" as such term is defined in Section
9-306(1) of the UCC and, in any event, shall include all interest, dividends
or other earnings, income or distributions from or in respect of, or from or
in respect of investments or reinvestments of, the Property Accounts, the
Central Account or the Cash Collateral, all collections and distributions
with respect to the Mortgage Loans and all other proceeds of Collateral.
"PROHIBITED ACTIVITIES OR CONDITIONS", with respect to a particular
Mortgage, shall have the meaning given that term in such Mortgage.
"PROPERTY" means any of the Bond Properties or any of the Additional
Mortgaged Properties, individually. "PROPERTIES" means every such Bond
Property and Additional Mortgaged Property, collectively.
"PROPERTY ACCOUNT" means, with respect to each Property, the Property
Account corresponding to such Property as identified in the Cash Management
Agreement, and "PROPERTY ACCOUNTS" means every such Property Account,
collectively.
"PROPOSED TRANSFER" shall have the meaning given that term in
section 4.5.
"PROPOSED TRANSFEREE" shall have the meaning given that term in
section 4.5.
"RATING AGENCIES" means Standard & Poor's and Xxxxx'x Investors
Services, their successors in interest, or any other nationally recognized
rating agency acceptable to Xxxxxx Xxx.
"REGULATORY AGREEMENT", with respect to each Bond Property, shall have
the meaning given such term in the Related Indenture, and "REGULATORY
AGREEMENTS" means every such Regulatory Agreement, collectively.
"REIMBURSABLE ADVANCE" shall have the meaning given that term in section
3.2.
"REIMBURSABLE ADVANCE RATE" means the prime rate of interest as reported
from day to day in THE WALL STREET JOURNAL as the base rate on corporate
loans posted by at least seventy-five percent (75%) of the nation's thirty
(30) largest banks plus two percent (2%) per annum. The Reimbursable Advance
Rate will be the rate reported on the applicable publication date as
18
determined above, notwithstanding the fact that such reported rate shall be
the prime rate for the preceding Business Day. If such rate is no longer
available, then the Reimbursable Advance Rate shall mean the base rate or
prime rate of interest of any "Money Center" bank designated by Xxxxxx Mae,
in its discretion, plus two percent (2%) per annum.
"REIMBURSEMENT LOAN DOCUMENTS" means, collectively, the Reimbursement
Mortgages and each of the other documents, agreements and instruments
granting, evidencing or perfecting security interests granted in connection
with the obligations secured by the Reimbursement Mortgages, including the
Cash Management Agreement, the Guaranties, the Replacement Reserve
Agreements, the Assignments of Management Agreement, title policies, UCC
fixture filings and UCC financing statements, and assignments of such
Mortgages by the prior holders thereof to Xxxxxx Xxx, as each such document,
agreement or instrument may be amended, supplemented, otherwise modified or
amended and restated from time to time in accordance with its respective
terms, and "REIMBURSEMENT LOAN DOCUMENT" means any one of the foregoing,
individually.
"REIMBURSEMENT MORTGAGES" means, collectively, the first priority
Security Instruments on each of the Additional Mortgaged Properties securing
the obligations of Owner under all of the Mortgaged Notes and under this
Agreement, and the second priority Security Instruments on each of the Bond
Properties securing the obligations of Owner under all of the Mortgage Notes,
other than the Related Mortgage Note evidencing the Mortgage Loan secured by
the first priority Mortgage on such Bond Property, and under this Agreement,
and "REIMBURSEMENT MORTGAGE" means any one of the foregoing, individually.
"RELATED ACT", with respect to an issue of Related Bonds, shall have the
meaning given to the term "Act" in the Related Indenture.
"RELATED BOND DOCUMENTS" means, with respect to particular Related
Bonds, the Related Bonds, the Related Indenture, the Related Xxxxxx Mae
Pass-Through Certificate, the Regulatory Agreement (and any other agreement
relating to rental restrictions on the applicable Bond Property), the
Financing Agreement, a Tax Certificate (or other applicable agreement
relating to arbitrage in connection with the proceeds of such Related Bonds)
and all other documents, instruments and agreements executed and delivered
in connection with the issuance, sale, delivery and/or remarketing of the
Related Bonds, as each such agreement or instrument may be amended,
supplemented, otherwise modified or amended and restated from time to time in
accordance with its terms.
"RELATED BOND MORTGAGE" with respect to a particular Bond Property,
means the first priority Bond Mortgage encumbering such Bond Property and
securing the Related Mortgage Note.
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"RELATED BONDS" means, with respect to a particular Bond Property, the
tax-exempt multifamily revenue bonds issued pursuant to Applicable Law and
the Related Indenture.
"RELATED XXXXXX XXX PASS-THROUGH CERTIFICATE" means, with respect to an
issue of Related Bonds, the Guaranteed Mortgage Pass-Through Certificate
issued to and registered in the name of the Related Trustee by Xxxxxx Mae or,
in the event a substitute Guaranteed Mortgage Pass-Through Certificate shall
be delivered to such Related Trustee pursuant to the Related Indenture, such
substitute Guaranteed Mortgage Pass-Through Certificate, and "RELATED XXXXXX
XXX PASS-THROUGH CERTIFICATES" means every such Related Xxxxxx Mae
Pass-Through Certificate, collectively.
"RELATED INDENTURE" means, with respect to an issue of Related Bonds,
the indenture of trust between an Issuer and a Related Trustee pursuant to
which such Related Bonds were issued, as such Related Indenture may be
amended, supplemented, otherwise modified or amended and restated from time
to time in accordance with its terms, and "RELATED INDENTURES" means every
such Related Indenture, collectively.
"RELATED MORTGAGE" means (a) with respect to a particular Bond Property,
the Related Bond Mortgage and the Related Second Mortgage, collectively,
encumbering such Bond Property, and (b) with respect to a particular
Additional Mortgaged Property, the Reimbursement Mortgage encumbering such
Additional Mortgaged Property.
"RELATED MORTGAGE NOTE" means, with respect to an issue of Related
Bonds, one or more Multifamily Notes or Amended and Restated Multifamily
Notes (in each instance, together with all addenda thereto) executed by Owner
in favor of an Issuer and secured by, among other things, one or more Related
Bond Mortgages, as such Related Mortgage Note may be amended, supplemented,
otherwise modified or amended and restated from time to time in accordance
with its terms, and "RELATED MORTGAGE NOTES" means every such Related
Mortgage Note, collectively.
"RELATED SECOND MORTGAGE", with respect to a particular Bond Property,
means the second priority Reimbursement Mortgage encumbering such Bond
Property.
"RELATED TRUSTEE" with respect to an issue of Related Bonds, means the
entity designated as the "Trustee" under the Related Indenture, and "RELATED
TRUSTEES" means every such Related Trustee, collectively.
"RELEASED PROPERTY" means a Property released or proposed to be released
from the lien of a Mortgage pursuant to section 4.2 or section 4.3.
"REMARKETED BONDS" shall have the meaning given that term in the
recitals to this Agreement.
"RENT ROLL" shall have the meaning given that term in section 2.1(s).
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"RENTS", (a) with respect to any Bond Property, shall have the meaning
given that term in the Related Second Mortgage, unless such Related Second
Mortgage is no longer in effect, in which case Rent shall have the meaning
given such term in the Related Bond Mortgage, and (b) with respect to any
Additional Mortgaged Property, shall have the meaning given that term in the
Related Mortgage.
"REPLACEMENT RESERVE ACCOUNT", with respect to a particular Property,
means the replacement reserve account established pursuant to the Replacement
Reserve Agreement relating to such Property, and "REPLACEMENT RESERVE
ACCOUNTS" means every such Replacement Reserve Account, collectively.
"REPLACEMENT RESERVE AGREEMENT" means each Replacement Reserve and
Security Agreement between Owner and Xxxxxx Xxx relating to a Property and
establishing Owner's obligation to fund certain replacement reserve accounts,
as such agreement may be amended, supplemented, otherwise modified or amended
and restated from time to time in accordance with its terms, and "REPLACEMENT
RESERVE AGREEMENTS" means every such Replacement Reserve Agreement,
collectively.
"REQUIRED FACILITY REDUCTION" shall have the meaning given that term in
section 4.3(a).
"RESTATED NOTES" shall have the meaning given that term in the recitals
to this Agreement.
"RESTATED SECURITY INSTRUMENTS" shall have the meaning given that term
in the recitals to this Agreement.
"SECURITY INSTRUMENT" means a written instrument creating a valid lien
on a Property either in favor of or held by Xxxxxx Mae and/or a Related
Trustee, as such instrument may be amended, supplemented, otherwise modified
or amended and restated from time to time in accordance with its terms. A
Security Instrument may be in the form of a mortgage, deed of trust, deed to
secure debt or security deed.
"SERVICER" means the independent contractor engaged to service the
Mortgage Loans, the Related Bond Documents, the Bond Property Loan Documents
and the Reimbursement Documents for Xxxxxx Xxx and any replacements or
successors engaged by Xxxxxx Mae. The initial Servicer pursuant to a written
contract with Xxxxxx Xxx is GMAC Commercial Mortgage Corporation.
"SERVICING AGREEMENT" means any agreement with respect to the servicing
of the Mortgage Loans, the Bond Property Loan Documents and the Reimbursement
Documents between Xxxxxx Mae and an independent contractor, if any,
designated from time to time by Xxxxxx Xxx as the Servicer of the Mortgage
Loans, the Bond Property Loan Documents and the Reimbursement Documents, as
each such agreement may be amended, supplemented, otherwise modified or
amended and restated from time to time in accordance with its terms; PROVIDED
that
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the Servicing Agreement may be a Xxxxxx Mae guide or announcement made
applicable to the Mortgage Loans by an agreement between Xxxxxx Xxx and the
Servicer.
"SINGLE-PURPOSE" means, with respect to a Person, that such Person at
all times since its formation: (i) has been a duly formed and existing limited
partnership or corporation, as the case may be; (ii) has been duly qualified
in each jurisdiction in which such qualification was at such time necessary
for the conduct of its business; (iii) has complied with the provisions of
its organizational documents and the laws of its jurisdiction of formation in
all respects; (iv) has observed all customary formalities regarding its
partnership or corporate existence, as the case may be; (v) has accurately
maintained its financial statements, accounting records and other partnership
or corporate documents separate from those of any other Person; (vi) has not
commingled its assets or funds with those of any other Person; (vii) has
accurately maintained its own bank accounts, payroll and books and accounts
separate from those of any other Person; (viii) has paid its own liabilities
from its own separate assets; (ix) has identified itself in all dealings with
the public, under its own name and as a separate and distinct entity; (x) has
not identified itself as being a division or a part of any other Person; (xi)
has not identified any other Person as being a division or a part of such
Person; (xii) has been adequately capitalized in light of its contemplated
business operations; (xiii) has not assumed, guaranteed or become obligated
for the liabilities of any other Person (except in connection with the
endorsement of negotiable instruments in the ordinary course of business) or
held out its credit as being available to satisfy the obligations of any
other Person; (xiv) has not acquired obligations or securities of any other
Person; (xv) has not made loans or advances to any other Person; (xvi) has
not entered into and was not a party to any transaction with any Affiliate of
such Person, except in the ordinary course of business and on terms which are
no less favorable to such Person than would be obtained in a comparable
arm's-length transaction with an unrelated third party; (xvii) has conducted
its own business in its own name; (xviii) has paid the salaries of its own
employees and maintained a sufficient number of employees in light of its
contemplated business operations; (xix) has allocated fairly and reasonably
any overhead for shared office space; (xx) has used stationery, invoices and
checks separate from those of any other Person; (xxi) has not pledged its
assets for the benefit of any other entity or made any loans or advances to
any Person; (xxii) has not engaged in a non-exempt prohibited transaction
described in Section 406 of ERISA or Section 4975 of the Code; (xxiii) has
not acquired obligations or securities of its partners or Affiliates; and
(xxiv) has corrected any known misunderstanding regarding its separate
identity.
"STANDARD & POOR'S" means Standard & Poor's Ratings Group, a division of
McGraw Hill, and its successors and assigns if such successors and assigns
shall continue to perform the functions of a securities rating agency.
"SUBSIDIARY" means, as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect
a majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which
is
22
otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person.
"SUBSTITUTION PERCENTAGE" shall have the meaning given that term in
section 4.2(a).
"TAX CERTIFICATE", with respect to a particular Related Bonds, means any
certificate, instrument, contract or other agreement executed and delivered
by Owner to assure continuation of the exclusion of interest on the Related
Bonds from gross income for federal income tax purposes, and "TAX
CERTIFICATES" means every such Tax Certificate, collectively.
"TAXES" shall have the meaning given that term in section 2.2(r).
"TRANSACTION DOCUMENTS" means, collectively, the Bond Documents, the
Mortgage Documents, this Agreement, the Guaranties and all other agreements,
instruments or documents executed by Owner in connection with the Bonds, the
Mortgage Loans, this Agreement or the transactions contemplated thereby or
hereby, including those listed in Exhibit C, and "TRANSACTION DOCUMENT" means
any one of the foregoing, individually.
"UCC" or "UNIFORM COMMERCIAL CODE", with respect to a Property, means
the Uniform Commercial Code as in effect in the state where such Property is
located.
"VALUE" means, as of any date of determination, the value attributed to
any Property by Xxxxxx Xxx in accordance with the standards and procedures
utilized for underwriting purposes for similar Multifamily Residential
Properties in accordance with the applicable provisions of the DUS Guide as
of such date of determination, it being acknowledged that in evaluating the
Value of a Property, Xxxxxx Mae may take into account all factors relevant to
the value of such Property including the current condition of the Property,
and in evaluating the Value of a Property without an extended operating
history, such Value shall be based on projections and pro formas satisfactory
to Xxxxxx Xxx.
"VILLAGE CREEK REGULATORY AGREEMENT" shall mean that certain Regulatory
Agreement and Declaration of Restrictive Covenants dated as of December 15,
1985, and recorded on December 31, 1985 in the real estate records of
Jefferson County, Colorado at Reception Number 85126922, as such agreement
has been (i) amended by that certain Amended and Restated Regulatory
Agreement dated as of December 1, 1988 recorded on December 14, 1988 in the
real estate records of Jefferson County, Colorado at Reception Number
88121206, (ii) further amended by that certain First Amendment to Regulatory
Agreement and Declaration of Restrictive Covenants dated as of January 1,
1989 recorded on April 21, 1989 in the real estate records of Jefferson
County, Colorado at Reception Number 89033727, (iii) further amended by that
certain Second Amendment to Regulatory Agreement and Declaration of
Restrictive Covenants dated as of December 29, 1992 recorded on January 4,
1993 in the real estate records of Jefferson County, Colorado at Reception
Number 93000837, (iv) further amended by that certain Third Amendment to
Regulatory Agreement and Declaration of Restrictive Covenants dated as of May
11, 1993 recorded on May 14, 1993 in the real estate records of Jefferson
23
County, Colorado at Reception Number 93067649, and as such agreement may be
amended, supplemented, otherwise modified or amended and restated from time
to time in accordance with its terms.
"VILLAGE CREEK PROJECT" means the Additional Property identified on
Exhibit B as Village Creek Apartments, Westminster, Jefferson County,
Colorado.
SECTION 1.3 INTERPRETATION.
The parties to this Agreement acknowledge that each party and their
respective counsel have participated in the drafting and revision of this
Agreement and the other Transaction Documents. Accordingly, the parties agree
that any rule of construction which disfavors the drafting party shall not
apply in the interpretation of this Agreement and the other Transaction
Documents or any statement or supplement or exhibit to this Agreement or to
the other Transaction Documents.
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 2.1 REPRESENTATIONS AND WARRANTIES OF OWNER.
To induce Xxxxxx Xxx to enter into this Agreement and to deliver the
Pass-Through Certificates, the Owner represents and warrants to Xxxxxx Mae as
follows:
(a) DUE ORGANIZATION; OWNERSHIP STRUCTURE.
(i) Owner is a Single-Purpose limited partnership duly
organized, validly existing and in good standing under the laws of the
State of Florida pursuant to (x) that certain Second Amended and
Restated Limited Partnership Agreement dated as of June 20, 1996
(together with all schedules, exhibits and annexes thereto, the "OWNER
PARTNERSHIP AGREEMENT"), and (y) that certain Certificate of Limited
Partnership duly filed in the office of the Secretary of State of
Florida on June 5, 1991, as amended by that certain Amendment to
Certificate of Limited Partnership dated as of December 21, 1994 and
duly filed in the office of the Secretary of State of Florida on April
11, 1995 (collectively, the "OWNER PARTNERSHIP CERTIFICATE"). Copies of
the Owner Partnership Agreement, the Owner Partnership Certificate and
all other organizational documents of Owner (collectively, the "OWNER
ORGANIZATIONAL DOCUMENTS"), certified as true, correct and complete by a
duly authorized officer of General Partner, have been delivered to
Xxxxxx Xxx. The Owner Organizational Documents are in full force and
effect and constitute the entire agreement of the partners thereof with
respect to Owner, and have not been supplemented, amended or modified.
24
(ii) General Partner is the sole general partner of Owner and is
the record and beneficial owner of, and has good title to, a one percent
(1%) partnership interest in Owner, free and clear of all liens,
security interests, options, rights of first refusal and adverse claims
of title of any kind or character, and such percentage interest is not
the subject of any agreement providing for the sale or transfer thereof.
(iii) AIMCO OP is a limited partner of Owner and is the record and
beneficial owner of, and has good title to, not less than a ninety-five
percent (95%) partnership interest in Owner, free and clear of all
liens, security interests, options, rights of first refusal and adverse
claims of title of any kind or character, and such percentage interest
is not the subject of any agreement providing for the sale or transfer
thereof.
(iv) General Partner is a newly formed, Single-Purpose corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware pursuant to that certain Certificate of
Incorporation dated June 19, 1996, and duly filed in the office of the
Secretary of State of Delaware on June 19, 1996 (the "GENERAL PARTNER
ARTICLES OF INCORPORATION"). Copies of the General Partner Articles of
Incorporation, By-Laws and all other organizational documents of General
Partner (collectively, the "GENERAL PARTNER ORGANIZATIONAL DOCUMENTS"),
certified as true, correct and complete by a duly authorized officer of
General Partner, have been delivered to Xxxxxx Mae. The General Partner
Organizational Documents are in full force and effect and have not been
supplemented, amended or modified.
(v) AIMCO OP is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware
pursuant to (x) that certain First Amended and Restated Agreement of
Limited Partnership dated as of July 29, 1994 (together with all
schedules, exhibits and annexes thereto, the "AIMCO OP PARTNERSHIP
AGREEMENT"), and (y) that certain Certificate of Limited Partnership
dated May 16, 1994 and duly filed in the office of the Secretary of
State of Delaware on May 16, 1994 as the same has been amended pursuant
to (a) that certain Certificate of Merger of Coral Garden Apartments
Limited Liability Company into AIMCO Properties, L.P. dated July 29,
1994 and duly filed in the office of the Secretary of State of Delaware
on July 29, 1994, (b) that certain Certificate of Amendment to the
Certificate of Limited Partnership of AIMCO Properties, L.P. dated March
10, 1995 and filed in the office of the Secretary of State of Delaware
on March 13, 1995, (c) that certain Certificate of Amendment of
Certificate of Limited Partnership of AIMCO Properties, L.P. dated
October 10, 1995 and filed in the office of the Secretary of State of
Delaware on October 18, 1995 (the "AIMCO OP PARTNERSHIP CERTIFICATE").
Copies of the AIMCO OP Partnership Agreement and the AIMCO OP
Partnership Certificate (the "AIMCO OP ORGANIZATIONAL DOCUMENTS"),
certified as true, correct and complete by a duly authorized officer of
the AIMCO REIT, have been delivered to Xxxxxx Xxx. The AIMCO OP
Organizational Documents are in full force and effect and constitute the
25
entire agreement of the partners thereof with respect to AIMCO OP, and have not
been supplemented, amended or modified.
(vi) AIMCO-GP, Inc., a Delaware corporation, is the sole general
partner of AIMCO 0P and is the record and beneficial owner of, and has
good title to not less than a 0.99% interest in AIMCO OP, free and clear
of all liens, security interests, options, rights of first refusal and
adverse claims of title of any kind or character (except for any
options' rights of first refusal and adverse claims arising under or
pursuant to the AIMCO OP Partnership Agreement), and such percentage
interest is not subject to any agreement providing for the sale or
transfer thereof.
(vii) AIMCO-LP, Inc., a Delaware corporation, is a limited partner
of AIMCO OP and is the record and beneficial owner of, and has good
title to not less than a 84.00% interest in AIMCO OP, free and clear of
all liens, security interests, options, rights of first refusal and
adverse claims of title of any kind or character (except for any
options' rights of first refusal and adverse claims arising under or
pursuant to the AIMCO OP Partnership Agreement), and such percentage
interest is not subject to any agreement providing for the sale or
transfer thereof.
(viii) AIMCO REIT is the sole shareholder and is the record and
beneficial owner of, and has good title to not less than a 100% interest
in each of General Partner, AIMCO-GP, Inc. and AIMCO-LP, Inc., free and
clear of all liens, security interests, options, rights of first refusal
and adverse claims of title of any kind or character.
(ix) Owner is qualified to transact business and in good standing
in the States of Florida, Arizona, Texas and Colorado and in each other
jurisdiction in which such qualification and/or standing is necessary to
the conduct of its business and where the failure to be so qualified
would adversely affect the validity of, the enforceability of, or the
ability of Owner to perform the Obligations under this Agreement and the
other Transaction Documents. General Partner is qualified to transact
business and in good standing in the States of Florida, Arizona, Texas,
Colorado and Delaware and in each other jurisdiction in which such
qualification and/or standing is necessary to the conduct of its
business and where the failure to be so qualified would adversely affect
the validity of, the enforceability of, or the ability of Owner to
perform the Obligations under this Agreement and the other Transaction
Documents. Each Guarantor is qualified to transact business and in good
standing in each jurisdiction in which such qualification and/or
standing is necessary to the conduct of its business.
(x) Owner's principal place of business, principal office and
office where it keeps its books and records as to the Collateral is
located at 0000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxx
00000-0000.
26
(b) POWER AND AUTHORITY. Each of Owner, General Partner and each
Guarantor has the requisite power and authority (i) to own its
properties and to carry on its business as now conducted and as
contemplated to be conducted in connection with the performance of the
Obligations hereunder and under the other Transaction Documents and (ii)
to execute and deliver this Agreement and the other Transaction
Documents and to carry out the transactions contemplated by this
Agreement and the other Transaction Documents.
(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement and the other Transaction Documents have been duly
authorized by all necessary action and proceedings by or on behalf of
each of Owner, General Partner and each Guarantor, and no further
approvals or filings of any kind, including any approval of or filing
with any Governmental Authority, are required by or on behalf of Owner,
General Partner or any Guarantor as a condition to the valid execution,
delivery and performance by Owner, General Partner or the Guarantors of
this Agreement or any of the other Transaction Documents.
(d) VALID AND BINDING OBLIGATIONS. This Agreement and the other
Transaction Documents have been duly authorized, executed and delivered
by Owner and General Partner and constitute the legal, valid and binding
obligations of Owner, enforceable against Owner in accordance with their
respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws or equitable principles affecting the enforcement of creditors'
rights generally or by equitable principles or by the exercise of
discretion by any Court. Each Guaranty has been duly authorized,
executed and delivered by the respective Guarantor and constitutes the
legal, valid and binding obligation of each such Guarantor, enforceable
against such Guarantor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles
affecting the enforcement of creditors' rights generally or by equitable
principles or by the exercise of discretion by any Court.
(e) NON-CONTRAVENTION: NO LIENS. Neither the execution and delivery
of this Agreement and the other Transaction Documents, nor the
fulfillment of or compliance with the terms and conditions of this
Agreement and the other Transaction Documents, the issuance of the Bonds
nor the payment of the Obligations:
(i) does or will conflict with or result in any breach or violation
of any Applicable Law, rule or regulation enacted or issued by any
Governmental Authority or other agency having jurisdiction over Owner,
General Partner or any Guarantor, any of the Properties or any other
portion of the Collateral or other assets of Owner, General Partner or
any Guarantor, or any judgment or order applicable to Owner, General
Partner or any Guarantor or to which Owner, General Partner or any
Guarantor, any of the Properties or other assets of either Owner,
General Partner or any Guarantor are subject;
27
(ii) does or will conflict with or result in any material breach or
violation of, or constitute a default under, any of the terms,
conditions or provisions of Owner's Organizational Documents, General
Partner's Organizational Documents, AIMCO OP's Organizational Documents,
any indenture, existing agreement or other instrument to which Owner,
General Partner or any Guarantor is a party or to which Owner, General
Partner or any Guarantor, any of the Properties or any other portion of
the Collateral or other assets of Owner, General Partner or any
Guarantor are subject;
(iii) does or will result in or require the creation of any Lien on
all or any portion of the Collateral or any of the Properties, except
for the Permitted Liens; or
(iv) does or will require the consent or approval of any creditor
of Owner, General Partner or any Guarantor, any Governmental Authority
or any other Person except such consents or approvals which have already
been obtained.
(f) PENDING LITIGATION OR OTHER PROCEEDINGS. There is no pending
or, to the best knowledge of Owner, threatened action, suit, proceeding
or investigation, at law or in equity, before any court, board, body or
official of any Governmental Authority or arbitrator against or
affecting any Property or any other portion of the Collateral or other
assets of Owner, General Partner or any Guarantor, which, if decided
adversely, (i) would have, or may reasonably be expected, to have, a
Material Adverse Effect or (ii) would adversely affect the exclusion of
interest on the Bonds from gross income for federal income tax purposes.
Owner is not in default with respect to any order of any Governmental
Authority.
(g) SOLVENCY. Neither Owner, General Partner or any Guarantor is
insolvent or will be rendered insolvent by the transactions contemplated
by this Agreement or the other Transaction Documents and after giving
effect to such transactions, neither Owner, General Partner or any
Guarantor will be left with an unreasonably small amount of capital with
which to engage in its business or undertakings, nor will either Owner,
General Partner or any Guarantor have incurred, have intended to incur,
or believe that it has incurred, debts beyond its ability to pay such
debts as they mature. Owner did not receive less than a reasonably
equivalent value in exchange for incurrence of the Obligations. There
(i) is no contemplated, pending or, to the best of Owner's knowledge,
threatened bankruptcy, reorganization, receivership, insolvency or like
proceeding, whether voluntary or involuntary, affecting either Owner,
General Partner or any Guarantor or any of the Properties and (ii) has
been no assertion or exercise of jurisdiction over either Owner, General
Partner or any Guarantor or any of the Properties by any court empowered
to exercise bankruptcy powers.
(h) RATIOS. As of the date hereof, the Aggregate Debt Service
Coverage Ratio for all Properties for the 12 month period ending on June
13, 1996 is not less than 1.32:1, and the Loan to Value Ratio is not
greater than sixty-nine and forty one hundredths percent (69.40%).
28
(i) TITLE. Owner has good, valid, marketable and indefeasible title
in fee to each Property, free and clear of all Liens whatsoever except
the Permitted Liens. Each Bond Mortgage, if and when properly recorded
in the appropriate records, together with any Uniform Commercial Code
financing statements required to be filed in connection therewith, will
create a valid, perfected first lien on the Bond Property intended to be
encumbered thereby (including the Leases of such Bond Property and the
Rents and all rights to collect Rents under such Leases), subject only
to Permitted Liens. Each Reimbursement Mortgage with respect to an
Additional Mortgaged Property, if and when properly recorded in the
appropriate records, together with any Uniform Commercial Code financing
statements required to be filed in connection therewith, will create a
valid, perfected first priority lien on the Additional Mortgaged
Property intended to be encumbered thereby (including the Leases of such
Additional Mortgaged Property and the Rents and all rights to collect
Rents under such Leases), subject only to Permitted Liens. Each
Reimbursement Mortgage with respect to a Bond Property, if and when
properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create a valid, perfected second priority lien on the
Bond Property intended to be encumbered thereby (including the Leases of
such Bond Property and the Rents and all rights to collect Rents under
such Leases), subject only to Permitted Liens. Except for any Permitted
Liens, there are no Liens or claims for work, labor or materials
affecting any Property which are or may be prior to, subordinate to, or
of equal priority with, the Liens created by the Mortgage Documents.
With the exception of any Regulatory Agreement, the Permitted Liens do
not have, and may not reasonably be expected to have, a Material Adverse
Effect.
(j) COMPLIANCE WITH EXISTING BOND ISSUES AND EXISTING SECURITY
INSTRUMENTS. No event has occurred since Owner acquired the Properties
and no condition currently exists with respect to Owner or any Bond
Property that would constitute an event of default or which, with the
lapse of time, if not cured, or with the giving of notice or both, would
become an event of default under any of the Regulatory Agreements, any
of the Existing Security Instruments or any other document executed in
connection with any of the Existing Bond Issues. Owner has complied in
all material respects with the requirements of each loan agreement
executed in connection with the Existing Bond Issues.
(k) COMPLIANCE WITH TAX CERTIFICATES. Owner has not taken and will
not take any action, or permit any action that is within Owner's control
to be taken, that would impair the exclusion from gross income for
federal income tax purposes of the interest payable on any of the
Existing Bond Issues or the Bonds. As of the Xxxxxx Xxx Facility Closing
Date, Owner is in compliance with all material requirements of all of
the Tax Certificates. Owner has complied and will comply with all the
terms and conditions of the Tax Certificates, including the terms and
conditions of the exhibits thereto, and the representations set forth in
the Tax Certificates pertaining to Owner are true and accurate in all
material respects.
(l) COMPLIANCE WITH REGULATORY AGREEMENTS. Each of the Bond
Properties is in compliance with all material requirements of the
applicable Regulatory Agreement. Owner intends to cause the residential
units in each Bond Property to be rented or available for rental
29
on a basis which satisfies the requirements of the Regulatory Agreement
with respect to such Bond Property. All Leases with respect to each Bond
Property will comply with all Applicable Laws and the Regulatory
Agreement with respect to such Bond Property.
(m) TAXES. Owner has filed all property and similar tax returns
required to have been filed by it with respect to each Property and has
paid and discharged, or caused to be paid and discharged, all
installments for the payment of real estate, property or similar taxes
due to date, and all other material Impositions imposed against,
affecting or relating to each Property other than those which have not
become due, together with any fine, penalty, interest or cost for
nonpayment pursuant to such returns or pursuant to any assessment
received by it. Owner has no knowledge of any new proposed tax, levy or
other governmental or private assessment or charge in respect of any
Property which has not been disclosed in writing to Xxxxxx Xxx.
(n) ZONING. Each Property complies in all material respects with
all Applicable Laws affecting such Property. Without limiting the
foregoing, all material Permits, including certificates of occupancy,
have been issued and are in full force and effect. Neither Owner nor, to
the knowledge of Owner, any former owner of any Property, has received
any written notification or threat of any actions or proceedings
regarding the noncompliance or nonconformity of any Property with any
Applicable Laws or Permits, nor is Owner otherwise aware of any such
pending actions or proceedings.
(o) LIABILITY FOR HAZARDOUS SUBSTANCES. Neither Owner, General
Partner nor any Guarantor has any liability, contingent or otherwise, in
connection with any Hazardous Substance Activity on or affecting any
Property in violation of Hazardous Materials Laws.
(p) PROHIBITED ACTIVITIES OR CONDITIONS. Except as disclosed in any
Environmental Report delivered to Xxxxxx Mae prior to the date of this
Agreement, or otherwise disclosed in writing by Owner to Xxxxxx Xxx
prior to the date of this Agreement, (i) to the best knowledge of Owner,
no Prohibited Activities or Conditions exist or have existed at, upon,
under or within any Property that have not been remedied and (ii)
neither Owner, General Partner nor any Guarantor has at any time caused
or permitted any Prohibited Activities or Conditions to exist at, upon,
under or within any Property.
(q) HAZARDOUS MATERIALS LAWS. Except as disclosed in an
Environmental Report delivered to Xxxxxx Mae prior to the date of this
Agreement, or otherwise disclosed in writing by Owner to Xxxxxx Xxx
prior to date of this Agreement, (i) neither Owner nor, to the knowledge
of Owner, any other party has been or is involved in operations at any
Property which operations could reasonably be expected to lead to (x)
the imposition of liability on Owner, General Partner or any Guarantor
under any Hazardous Materials Law in effect as of the date of this
Agreement, or on any subsequent or former owner of any Property, or (y)
the creation of a Lien with respect to a liability on any Property under
any Hazardous Materials Law in effect as of the date hereof; (ii)
neither Owner, General Partner nor any Guarantor nor to the best
knowledge of Owner, any predecessor-in-interest with respect to any
Property has permitted
30
any tenant or occupant of any Property to engage in any activity that
could reasonably be expected to impose a claim or liability under any
Hazardous Materials Law in effect as of the date hereof on such tenant
or occupant, on Owner or on any other subsequent or former owner of any
Property; and (iii) neither Owner, General Partner nor any Guarantor has
received, and Owner has no knowledge of the issuance of, any claim,
citation or notice of any Governmental Actions.
(r) LEASES. Owner has delivered to Servicer, on behalf of Xxxxxx
Mae, a true and correct copy of its form apartment lease for each
Property, and each Lease with respect to such Property is in the form
thereof, with no material modifications thereto, except as previously
disclosed in writing to Servicer or Xxxxxx Xxx. Except as set forth in a
Rent Roll, no Lease for any unit in any Property (i) is for a term in
excess of one year, including any renewal or extension period unless
such renewal or extension period is subject to termination by Owner upon
not more than 30 days' written notice, (ii) provides for prepayment of
more than one month's rent, or (iii) was entered into in other than the
ordinary course of business.
(s) RENT ROLL. Owner has executed and delivered to Servicer, on
behalf of Xxxxxx Mae, a Certification to Property Rent Roll (the "RENT
ROLL"), for each Property, each dated as of and delivered within thirty
(30) days prior to the Xxxxxx Xxx Facility Closing Date and otherwise in
the form promulgated by Xxxxxx Mae. Each Rent Roll sets forth each and
every unit subject to a Lease which is in full force and effect as of
the date of such Rent Roll. The information set forth on each Rent Roll
is true, correct and complete as of its date and there has occurred no
material adverse change in the information shown on any Rent Roll from
the date of each such Rent Roll to the Xxxxxx Xxx Facility Closing Date.
Except as disclosed in the Rent Roll with respect to each Property or
otherwise previously disclosed in writing to Servicer or Xxxxxx Mae, no
Lease is in effect as of the date of the Rent Roll with respect to such
Property.
(t) STATUS OF LANDLORD UNDER LEASES. Except for any assignment of
leases and rents which is a Permitted Lien or which is to be released in
connection with the consummation of the transactions contemplated by
this Agreement, Owner is the owner and holder of the landlord's interest
under each of the Leases of units in each Property and there are no
prior outstanding assignments of any such Lease, or any portion of the
Rents, additional rents, charges, issues or profits due and payable or
to become due and payable thereunder.
(u) ENFORCEABILITY OF LEASES. Each Lease constitutes the legal,
valid and binding obligation of Owner and, to the knowledge of Owner, of
each of the other parties thereto, enforceable in accordance with its
terms, subject only to bankruptcy, insolvency, reorganization or other
similar laws relating to creditors' rights generally, and equitable
principles, and except as disclosed in writing to Xxxxxx Xxx, no notice
of any default by Owner which remains uncured has been sent by any
tenant under any such Lease.
(v) NO LEASE OPTIONS. All premises demised to tenants under Leases
are occupied by such tenants as tenants only. No Lease contains any
option or right to purchase,
31
right of first refusal or any other similar provisions. No option or
right to purchase, right of first refusal, purchase contract or similar
right exists with respect to any Property.
(w) INSURANCE. Owner has delivered to Service or Xxxxxx Xxx true
and correct certified copies of all policies of insurance currently in
effect as of the date of this Agreement with respect to the Properties.
Each such insurance policy complies in all material respects with the
requirements set forth in the Mortgage Documents.
(x) TAX PARCELS. Each Property is on one or more separate tax
parcels, and each such parcel (or parcels) is (or are) separate and
apart from any other property.
(y) ENCROACHMENTS. Except as disclosed on the survey with respect
to each Property, none of the improvements located on any Property
encroaches upon the property of any other Person nor lies outside of the
boundaries and building restriction lines of such Property and no
improvement located on property adjoining such Property lies within the
boundaries of or in any way encroaches upon such Property.
(z) INDEPENDENT UNIT. Except for the Permitted Liens and as
disclosed on Exhibit G, each Property is an independent unit which does
not rely on any drainage, sewer, access, parking, structural or other
facilities located on any property not included in such Property or on
public or utility easements for the (i) fulfillment of any zoning,
building code or other requirement of any Governmental Authority that
has jurisdiction over such Property, (ii) structural support, or (iii)
the fulfillment of the requirements of any Lease or other agreement
affecting such Property. Owner, directly or indirectly, has the right to
use all amenities, easements, public or private utilities, parking,
access routes or other items necessary or currently used for the
operation of each Property. All public utilities are installed and
operating at each Property and all billed installation and connection
charges have been paid in full. Each Property is either (x) contiguous
to or (y) benefits from an irrevocable unsubordinated easement
permitting access from such Property to a physically open, dedicated
public street, and has all necessary permits for ingress and egress and
is adequately serviced by public water, sewer systems and utilities. No
building or other improvement not located on a Property relies on any
part of the Property to fulfill any zoning requirements, building code
or other requirement of any Governmental Authority that has jurisdiction
over the Property for structural support or to furnish to such building
or improvement any essential building systems or utilities.
(aa) CONDITION OF THE PROPERTIES. Each Property is in good
condition, order and repair, there exist no structural or other material
defects in such Property, whether latent or otherwise and Owner has not
received notice from any insurance company or bonding company of any
defects or inadequacies in such Property, or any part of it, which would
adversely affect the insurability of such Property or cause the
imposition of extraordinary premiums or charges for insurance or of any
termination or threatened termination of any policy of insurance or
bond. No claims have been made against any contractor, architect or
other party with respect to the condition of any Property or the
existence of any structural or other material defect therein. No
Property has been materially damaged by Casualty which has not been fully
32
repaired or for which Insurance Proceeds have not been received or are
not expected to be received except as previously disclosed in writing to
Xxxxxx Mae or Servicer. There are no proceedings pending for partial or
total Condemnation of any Property except as disclosed in writing to
Xxxxxx Xxx or Servicer. The average term of Related Bonds does not
exceed 120% of the average reasonably expected economic life of the
facilities of the Bond Property with respect to such issue of Related
Bonds financed with the original net proceeds.
(ab) NO CONTRACTUAL DEFAULTS. Other than any defaults that Owner is
required to cure pursuant to section 2.5, there are no defaults by
either Owner, General Partner or any Guarantor or, to the knowledge of
Owner, by any other Person under any contract to which either Owner,
General Partner or any Guarantor is a party relating to any Property,
including any management, rental, service, supply, security, maintenance
or similar contract. Neither Owner, General Partner or any Guarantor or
to the knowledge of Owner, any other person has received notice or has
any knowledge of any existing circumstances in respect of which it could
receive any notice of default or breach in respect of any contracts
affecting or concerning any Property.
(ac) COMPLIANCE WITH THE TRANSACTION DOCUMENTS. Owner is in
compliance with all provisions of the Transaction Documents to which it
is a party or by which it is bound. The representations and warranties
made by Owner in the Transaction Documents are true, complete and
correct as of the Xxxxxx Mae Facility Closing Date and do not contain
any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they
were made, not misleading.
(ad) ERISA. Each of Owner, General Partner and the Guarantors are in
compliance in all material respects with all applicable provisions of ERISA
and has not incurred any liability to the PBGC on a Plan under Title IV of
ERISA. None of the assets of either Owner, General Partner or any Guarantor
constitute plan assets (within the meaning of Department of Labor Regulation
Section 2510.3-101) of any employee benefit plan subject to Title I of ERISA.
(ae) OFFICIAL STATEMENT. The statements and information concerning
Owner and its Affiliates, and the Related Bond Property set forth in
each Official Statement (other than the information under the subheading
"Federal National Mortgage Association" of each such Official Statement)
are each complete and correct as of its date and, as of its date, do not
contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under
which they were made, not misleading.
(af) FINANCIAL INFORMATION. The financial projections relating to
Owner, General Partner and the Guarantors and delivered to Servicer, on
behalf of Xxxxxx Xxx, on or prior to the date hereof, if any, were
prepared on the basis of assumptions believed by Owner, in good faith at
the time of preparation, to be reasonable and Owner is not aware of any
fact or
33
information that would lead it to believe that such assumptions are
incorrect or misleading in any material respect; provided, however, that
no representation or warranty is made that any result set forth in such
financial projections shall be achieved. The financial statements of
Owner, General Partner and the Guarantors which have been furnished to
Servicer on behalf of Xxxxxx Mae are complete and accurate in all
material respects and present fairly the financial condition of Owner,
General Partner and each Guarantor, as of their respective dates in
accordance with GAAP, applied on a consistent basis, and since the date
of the most recent of such financial statements no event has occurred
which would have, or may reasonably be expected to have a Material
Adverse Effect, and there has not been any material transaction entered
into by Owner, General Partner or any Guarantor other than transactions
in the ordinary course of business. Neither Owner, General Partner or
any Guarantor has any material Contingent Obligation which are not
otherwise disclosed in its most recent financial statements.
(ag) ACCURACY OF INFORMATION. No information, statement or report
furnished in writing to Xxxxxx Xxx, any Issuer, Servicer or any Related
Trustee by Owner, General Partner or the Guarantors in connection with
this Agreement, the Bond Documents, the Mortgage Documents or any other
Transaction Document or in connection with the consummation of the
transactions contemplated hereby and thereby (including any information
furnished by Owner, General Partner or any Guarantor in connection with
the preparation of any materials related to the issuance delivery or
offering of any of the Bonds on the Bond Transaction Closing Date)
contains any material misstatement of fact or omits to state a material
fact necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading; and the
representations and warranties of Owner and the statements, information
and descriptions contained in Owner's closing certificates, as of the
Xxxxxx Mae Facility Closing Date, are true, correct and complete in all
material respects, do not contain any untrue statement or misleading
statement of a material fact, and do not omit to state a material fact
required to be stated therein or necessary to make the certifications,
representations, warranties, statements, information and descriptions
contained therein, in light of the circumstances under which they were
made, not misleading; and the estimates and the assumptions contained
herein and in any certificate of Owner delivered as of the Xxxxxx Xxx
Facility Closing Date are reasonable and based on the best information
available to Owner.
(ah) NO CONFLICTS OF INTEREST. To the best knowledge of Owner, no
member, officer, agent or employee of any Issuer has been or is in any
manner interested, directly or indirectly, in that Person's own name, or
in the name of any other Person, in the Related Bonds, the Related Bond
Documents, the Bond Property Loan Documents, Owner, General Partner or
any Guarantor or any Bond Property, in any contract for property or
materials to be furnished or used in connection with such Bond Property
or in any aspect of the transactions contemplated by the Bond Documents
or the Related Bond Property Loan Documents.
(ai) GOVERNMENTAL APPROVALS. No Governmental Approval not already
obtained or made is required for the execution and delivery or approval,
as the case may be, of this Agreement, the Bond Documents, the Mortgage
Documents or any other Transaction
34
Document or the performance of the terms and provisions hereof or
thereof by Owner, General Partner or any Guarantor.
(aj) GOVERNMENTAL ORDERS. Owner is not presently under any cease or
desist order or other orders of a similar nature, temporary or
permanent, of any Governmental Authority which would have the effect of
preventing or hindering performance of its duties hereunder, nor are
there any proceedings presently in progress or to its knowledge
contemplated which would, if successful, lead to the issuance of any
such order.
(ak) NO RELIANCE. Owner acknowledges, represents and warrants that
it understands the nature and structure of the transactions relating to
the refinancings of the Bond Properties, that it is familiar with the
provisions of all of the documents and instruments relating to such
refinancings to which it or any Issuer is a party or of which it is a
beneficiary; that it understands the risks inherent in such
transactions, including the risk of loss of all or any of the Bond
Properties and the Additional Mortgaged Properties; and that it has not
relied on any Issuer or Xxxxxx Xxx for any guidance or expertise in
analyzing the financial or other consequences of the transactions
contemplated by this Agreement, any Related Indenture or any other
Transaction Document or otherwise relied on any Issuer or Xxxxxx Mae in
any manner in connection with interpreting, entering into or otherwise
in connection with this Agreement, any other Transaction Document or any
of the matters contemplated hereby or thereby.
(al) ARBITRAGE BONDS. No money on deposit in any fund or account in
connection with the Existing Bond Issues, whether or not such money was
derived from other sources, has been used by or under the direction of
Owner, General Partner or any Guarantor in a manner which would cause
the Existing Bond Issues to be "arbitrage bonds" within the meaning of
Section 103(c) of the Code.
(am) COMPLIANCE WITH APPLICABLE LAW. Each of Owner, General Partner
and each Guarantor is in compliance with Applicable Law, including all
Governmental Approvals, if any, except for such items of noncompliance
that, singly or in the aggregate, have not had and are not reasonably
expected to cause, a Material Adverse Effect.
(an) CONTRACTS WITH AFFILIATES. Owner has not entered into and is
not a party to any contract, lease or other agreement with any Affiliate
of Owner for the provision of any service, materials or supplies to any
Property or Properties (including any contract, lease or agreement for
the provision of property management services, cable television services
or equipment, gas, electric or other utilities, security services or
equipment, laundry services or equipment or telephone services or
equipment) other than (i) the Management Agreements and (ii) that
certain Amended and Restated Cash Management Agreement, dated as of
January 1, 1995, among AIMCO OP, Owner and certain Affiliates of Owner.
35
SECTION 2.2 AFFIRMATIVE COVENANTS OF OWNER.
Owner agrees and covenants with Xxxxxx Xxx that, at all times
during the term of this Agreement:
(a) COMPLIANCE WITH AGREEMENTS; NO AMENDMENTS. Owner shall
comply with all the terms and conditions of each Transaction Document to
which it is a party or by which it is bound and shall use its best
efforts to cause each Related Trustee at all times to comply with the
terms of the Related Bond Documents to which each such Related Trustee
is a party; provided, however, that Owner's failure to comply with such
terms and conditions shall not be an Event of Default under section 6.1
of this Agreement until the expiration of applicable notice and cure
periods, if any, specified in the applicable Transaction Document.
(b) MAINTENANCE OF EXISTENCE. Owner shall maintain its
existence and continue to be a limited partnership organized under the
laws of the state of its organization, duly qualified to do business in
each jurisdiction in which such qualification is necessary to the
conduct of its business and where the failure to be so qualified would
adversely affect the validity of, the enforceability of or ability to
perform its obligations under this Agreement or any other Transaction
Document.
(c) MAINTENANCE OF REIT STATUS. At all times during which
Owner is bound by the terms of this Agreement: (i) AIMCO REIT shall
continue to qualify and be taxed as a real estate investment trust under
Subchapter M of the Code; and (ii) General Partner shall continue to
qualify as a "Qualified REIT Subsidiary" (as defined in Subchapter M of
the Code) of AIMCO REIT.
(d) FINANCIAL STATEMENTS: ACCOUNTANTS' REPORTS: OTHER
INFORMATION. Owner shall keep and maintain at all times complete and
accurate books of accounts and records in sufficient detail to correctly
reflect (x) all of Owner's financial transactions and assets and (y) the
results of the operation of each Property and copies of all written
contracts, Leases and other instruments which affect each Property
(including all bills, invoices and contracts for electrical service,
gas service, water and sewer service, waste management service,
telephone service and management services). In addition, Owner shall
furnish, or cause to be furnished, to Servicer, and upon Xxxxxx Mae's
request, to Xxxxxx Xxx:
(i) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in
any event within one hundred and twenty (120) days after the close of
each of Owner's fiscal years during the term of this Agreement, its
audited balance sheet as of the end of such fiscal year, its audited
statement of income, partners' equity and retained earnings for such
fiscal year and its audited statement of cash flows for such fiscal
year, all in reasonable detail and stating in comparative form the
respective figures for the corresponding date and period in the prior
fiscal year, prepared in accordance with GAAP, consistently applied, and
accompanied by a certificate of Owner's independent certified public
accountants to the effect that such financial statements have been
prepared
36
in accordance with GAAP, consistently applied, and that such financial
statements fairly present the results of its operations and financial
condition for the periods and dates indicated, with such certification
to be free of exceptions and qualifications as to the scope of the audit
or as to the going concern nature of the business.
(ii) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and in
any event within forty-five (45) days after each of the first three
fiscal quarters of each fiscal years during the term of this Agreement,
its unaudited balance sheet as of the end of such fiscal quarter and its
unaudited statement of income and retained earnings and its unaudited
statement of cash flows for the portion of the fiscal year ended with
the last day of such quarter, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date and
period in the previous fiscal year, accompanied by a certificate of
Owner's authorized representative to the effect that such financial
statements have been prepared in accordance with GAAP, consistently
applied, and that such financial statements fairly present the results
of its operations and financial condition for the periods and dates
indicated subject to year end adjustments in accordance with GAAP.
(iii) MONTHLY PROPERTY STATEMENTS. Upon Xxxxxx Mae's request (but
not more frequently than on a monthly basis) within thirty (30) days of
the last day of the prior month, a statement of income and expenses of
each Property accompanied by a certificate of Owner's authorized
representative to the effect that each such statement of income and
expenses fairly, accurately and completely presents the operations of
each such Property for the period indicated.
(iv) ANNUAL PROPERTY STATEMENTS. On an annual basis within thirty
(30) days of the end of the fiscal year, an annual statement of income
and expenses of each Property accompanied by a certificate of Owner's
authorized representative to the effect that each such statement of
income and expenses fairly, accurately and completely presents the
operations of each such Property for the period indicated.
(v) UPDATED RENT ROLLS. Upon Servicer's or Xxxxxx Mae's request, a
current Rent Roll for each Property, showing the name of each tenant,
and for each tenant, the space occupied, the lease expiration date, the
rent payable, the rent paid and any other information requested by
Servicer or Xxxxxx Mae and in the form required by Servicer or Xxxxxx
Xxx and accompanied by a certificate of Owner's authorized
representative to the effect that each such Rent Roll fairly, accurately
and completely presents the information required therein.
(vi) SECURITY DEPOSIT INFORMATION. Upon Servicer's or Xxxxxx Mae's
request, an accounting of all security deposits held in connection with
any lease of any part of any Property, including the name and
identification number of the accounts in which such security deposits
are held, the name and address of the financial institutions in which
such security deposits are held and the name of the person to contact at
such
37
financial institution, along with any authority or release necessary for
Servicer or Xxxxxx Xxx to access information regarding such accounts.
(vii) SECURITY LAW REPORTING INFORMATION. So long as AIMCO REIT or
any other Affiliate of Owner is a reporting company under the Securities
and Exchange Act of 1934, promptly upon their becoming available, copies
of (A) all financial statements, reports, notices and proxy statements
sent or made available generally by AIMCO REIT or any other Affiliate of
Owner to their respective security holders, (B) all regular and periodic
reports and all registration statements (other than on Form S-8 or a
similar form) and prospectuses, if any, filed by AIMCO REIT or any other
Affiliate of Owner with the United States Securities and Exchange
Commission or other Governmental Authorities, and (c) all press releases
and other statements made available generally by AIMCO REIT or any other
Affiliate of Owner to the public concerning material developments in the
business of AIMCO REIT or any other Affiliate of Owner.
(viii) ACCOUNTANTS' REPORTS. Promptly upon receipt thereof, copies
of any reports or management letters submitted to Owner by its
independent certified public accountants in connection with the
examination of its financial statements made by such accountants (except
for reports otherwise provided pursuant to clause (i) above); PROVIDED,
HOWEVER, that Owner shall only be required to deliver such reports and
management letters to the extent that they relate to Owner, General
Partner or any of the Properties.
(ix) OTHER REPORTS. Promptly upon receipt thereof, all schedules,
financial statements or other similar reports delivered by Owner
pursuant to the Transaction Documents or requested by Servicer or Xxxxxx
Mae with respect to Owner's business affairs or condition (financial or
otherwise) or any of the Properties.
(e) CERTIFICATE OF COMPLIANCE. Owner shall deliver to Servicer
concurrently with the delivery of the financial statements and/or
reports required to be delivered pursuant to paragraphs (d)(i) and
(d)(ii) above a certificate signed by the controller of General Partner
and AIMCO REIT stating that, to the best of the knowledge of such
controller following reasonable inquiry, no Event of Default or
Potential Event of Default has occurred, or if an Event of Default or
Potential Event of Default has occurred, specifying the nature thereof.
(f) MAINTAIN LICENSES. Owner shall procure and maintain in full
force and effect all licenses, Permits, charters and registrations which
are material to the conduct of its business and shall abide by and
satisfy all terms and conditions of all such licenses, Permits, charters
and registrations.
(g) ACCESS TO RECORDS; DISCUSSIONS WITH OFFICERS AND ACCOUNTANTS.
To the extent permitted by law and in addition to the applicable
requirements of the Mortgages, Owner shall permit Xxxxxx Xxx or Servicer:
38
(i) to inspect, make copies and abstracts of, and have
reviewed or audited, such of Owner's books and records as may relate to
the Obligations or any Property;
(ii) to discuss Owner's affairs, finances and accounts with
any of Owner's officers, partners and employees;
(iii) to discuss Owner's affairs, finances and accounts with
its independent public accountants, provided that the controller of
General Partner and AIMCO REIT has been given the opportunity by
Servicer or Xxxxxx Mae to be a party to such discussions; and
(iv) to receive any other information that Xxxxxx Xxx or
Servicer deems necessary or relevant in connection with any Mortgage
Loan, any Transaction Document or the Obligations.
Notwithstanding the foregoing, prior to an Event of Default or Potential
Event of Default, all inspections shall be conducted at reasonable times
during normal business hours.
(h) INFORM XXXXXX MAE AND SERVICER OF MATERIAL EVENTS. Owner
shall promptly inform Xxxxxx Xxx and Servicer in writing of any of the
following (and shall deliver to the Xxxxxx Mae and Servicer copies of any
related written communications, complaints, orders, judgments and other
documents relating to the following) of which Owner has or obtains acrual
knowledge:
(i) DEFAULTS. The occurrence of any Event of Default or any
Potential Event of Default under this Agreement or any other Transaction
Document;
(ii) REGULATORY PROCEEDINGS. The commencement of any
rulemaking or disciplinary proceeding or the promulgation of any
proposed or final rule which would have, or may reasonably be expected
to have, a Material Adverse Effect or adversely affect the tax-exempt
status of the interest payable on the Bonds;
(iii) LEGAL PROCEEDINGS. The commencement or threat of, or
amendment to, any proceedings by or against Owner, General Partner or
any Guarantor in any Federal, state or local court or before any
Governmental Authority, or before any arbitrator, which, if adversely
determined, would have, or at the time of determination may reasonably
be expected to have, a Material Adverse Effect or adversely affect the
tax-exempt status of the interest payable on the Bonds;
(iv) BANKRUPTCY PROCEEDINGS. The commencement of any
proceedings by or against Owner, General Partner or any Guarantor under
any applicable bankruptcy, reorganization, liquidation, insolvency or
other similar law now or hereafter in effect or
39
of any proceeding in which a receiver, liquidator, trustee or other
similar official is sought to be appointed for it;
(v) REGULATORY SUPERVISION OR PENALTY. The receipt of notice
from any Governmental Authority having jurisdiction over Owner, General
Partner or any Guarantor that (A) Owner, General Partner or any
Guarantor is being placed under regulatory supervision, (B) any license,
Permit, charter, membership or registration material to the conduct of
Owner's or any Guarantor's respective business or the Properties is to
be suspended or revoked or (C) Owner, General Partner or any Guarantor
is to cease and desist any practice, procedure or policy employed by
Owner, General Partner or such Guarantor, as the case may be, in the
conduct of its business, and such cessation would have, or may
reasonably be expected to have, a Material Adverse Effect or would
adversely affect the tax-exempt status of the interest on any Bonds; and
(vi) ENVIRONMENTAL CLAIM. The receipt of notice from any
Governmental Authority or other Person relating to any Environmental
Claim involving Owner, General Partner or any Guarantor or any of their
respective assets, including the Properties.
(i) SINGLE-PURPOSE ENTITIES. Owner and General Partner shall
at all times maintain and conduct themselves as Single-Purpose entities.
(j) INSPECTION. Owner shall permit any Person designated by
Xxxxxx Xxx (including Servicer): (i) to make entries upon and
inspections of the Properties; and (ii) to otherwise verify, examine and
inspect the amount, quantity, quality, value and/or condition of, or any
other matter relating to, any Property; PROVIDED, HOWEVER, that prior to
an Event of Default or Potential Event of Default, all such entries,
examinations and inspections shall be conducted at reasonable times
during normal business hours.
(k) COMPLIANCE WITH APPLICABLE LAWS. Owner shall comply in all
material respects with all Applicable Laws now or hereafter affecting
any Property or any part of any Property or requiring any alterations,
repairs or improvements to any Property. Owner shall procure and
continuously maintain in full force and effect, and shall abide by and
satisfy all material terms and conditions of all Permits.
(l) WARRANTY OF TITLE. Owner shall warrant and defend (a) the
title to each Property and every part of each Property, subject only to
Permitted Liens, and (b) the validity and priority of the lien of the
applicable Mortgage Documents, subject only to Permitted Liens, in each
case against the claims of all Persons whatsoever. Owner shall reimburse
Xxxxxx Mae and Servicer for any losses, costs, damages or expenses
(including reasonable attorneys' fees and court costs) incurred by
Xxxxxx Xxx or Servicer if an interest in any Property, other than with
respect to a Permitted Lien, is claimed by others.
40
(m) DEFENSE OF ACTIONS. Owner shall appear in and defend any
action or proceeding purporting to affect the security for this
Agreement or the rights or power of Xxxxxx Mae or Servicer hereunder,
and shall, pursuant to section 3.1, pay all costs and expenses,
including the cost of evidence of title and reasonable attorneys' fees,
in any such action or proceeding in which Xxxxxx Xxx may appear. If
Owner fails to perform any of the covenants or agreements contained in
this Agreement, or if any action or proceeding is commenced that is not
diligently defended by Owner which affects in any material respect
Xxxxxx Mae's or any Related Trustee's interest in any Property or any
part thereof, including eminent domain, code enforcement or proceedings
of any nature whatsoever under any Applicable Law, whether now existing
or hereafter enacted or amended, then Xxxxxx Xxx may, but without
obligation to do so and without notice to or demand upon Owner and
without releasing Owner from any Obligation, make such appearances,
disburse such sums and take such action as Xxxxxx Mae or Servicer deems
necessary or appropriate to protect Xxxxxx Mae's or such Related
Trustee's interest, including disbursement of attorney's fees, entry
upon such Property to make repairs or take other action to protect the
security of said Property, and payment, purchase, contest or compromise
of any encumbrance, charge or lien which in the judgment of Xxxxxx Mae
appears to be prior or superior to the Transaction Documents. In the
event (i) that any Mortgage is foreclosed in whole or in part or that
any Transaction Document is put into the hands of an attorney for
collection, suit, action or foreclosure, or (ii) of the foreclosure of
any mortgage, deed to secure debt, deed of trust or other security
instrument prior to or subsequent to any Mortgage or any Transaction
Document in which proceeding Xxxxxx Xxx is made a party or (iii) of the
bankruptcy of Owner, General Partner or any Guarantor or an assignment
by Owner, General Partner or any Guarantor for the benefit of their
respective creditors, Owner shall be chargeable with and agrees to pay
all costs of collection and defense, including actual attorneys' fees in
connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, which shall be due and payable
together with all required service or use taxes.
(n) PROPERTY MANAGEMENT; MAINTENANCE OF PROPERTIES. Owner
shall continue to operate each Property as a Multifamily Residential
Property, and shall manage or cause to be managed the operations of each
Property in accordance with the applicable provisions of the Mortgage
Documents and the other Transaction Documents. Owner (i) shall not
commit waste or permit impairment or deterioration of any Property, (ii)
shall not abandon any Property, (iii) shall restore or repair promptly
and in a good and workmanlike manner all or any part of any Property to
the equivalent of its condition existing immediately prior to such
Casualty, or such other lesser condition as Xxxxxx Mae may approve in
writing, in the event of any Casualty thereto, whether or not Insurance
Proceeds are available to cover in whole or in part the costs of such
restoration or repair, (iv) shall keep each Property, including
improvements, fixtures, equipment, machinery and appliances thereon in
good repair and shall replace fixtures, equipment, machinery and
appliances on each Property when necessary to keep such items in good
repair, (v) shall generally operate and maintain each Property in
accordance with the standards for "Class A" Multifamily Residential
Properties in the regional market in which each such Property is located
and (vi) shall give notice in writing to Xxxxxx Xxx of, and, unless
otherwise directed in writing by Xxxxxx Mae, appear in and defend, any
action or
41
proceeding purporting to affect any Property, the security of any
Mortgage or the rights or powers of Xxxxxx Xxx under any of the
Transaction Documents. Neither Owner nor any tenant or other person
shall remove, demolish or alter any improvement now existing or
hereafter erected on any Property or any fixture, equipment, machinery
or appliance in or on any Property except when incident to the
replacement of fixtures, equipment, machinery and appliances with items
of like kind.
(o) ADDITIONS TO THE PROPERTIES. Except as otherwise provided in
the Mortgage Documents, Owner shall have the right to undertake any
alteration, improvement, demolition, removal, or construction
(collectively, "ALTERATIONS") to the Properties without the prior
consent of Xxxxxx Mae; provided, however, that in any case, no such
Alterations shall be made to any Property without the prior written
consent of Xxxxxx Xxx if (i) such Improvement could reasonably be
expected to adversely affect the value of such Property or its operation
as a multifamily housing facility in substantially the same manner in
which it is being operated on the date of this Agreement, (ii) the
construction of such Improvement could reasonably be expected to result
in interference to the occupancy of tenants of such Property such that
tenants in occupancy with respect to 5% or more of the Leases would be
permitted to terminate their Leases or to xxxxx the payment of all or
any portion of their rent, or (iii) such Improvement will be completed
in more than 12 months from the date of commencement or in the last year
of the term of this Agreement. Notwithstanding the foregoing, Owner must
obtain Xxxxxx Mae's prior written consent to construct Alterations with
respect to the Property costing in excess of $125,000.00 and Owner must
give prior written notice to Xxxxxx Mae of its intent to construct
Alterations with respect to such Property costing in excess of
$50,000.00; PROVIDED, HOWEVER, that preceding requirements shall not be
applicable to Alterations made, conducted or undertaken by Owner as part
of Owner's routine maintenance and repair of the Properties pursuant to
section 2.2(n) or as otherwise required by the Mortgage Documents..
(p) ERISA. Owner shall at all times remain in compliance in all
material respects with all applicable provisions of ERISA and similar
requirements of the PBGC.
(q) NO AMENDMENTS TO TRANSACTION DOCUMENTS. Unless Xxxxxx Xxx shall
otherwise consent in writing, Owner shall not agree to any amendment of,
supplement to, waiver of, or modification of, the terms of any
Transaction Document.
(r) TAXES. If any tax, assessment or Imposition (other than a
franchise tax imposed on or measured by, the net income or capital
(including branch profits tax) of any Related Trustee or Xxxxxx Mae (or
any transferee or assignee thereof, including a participation holder))
("TAXES") is levied, assessed or charged by the United States or any
political subdivision or taxing authority thereof or therein upon any of
the Transaction Documents or the obligations secured thereby, the
interest of Xxxxxx Xxx or any Related Trustee in the Properties, or
Xxxxxx Mae or any Related Trustee by reason of or as holder of the
Transaction Documents, Owner shall pay all such Taxes to, for, or on
account of Xxxxxx Xxx or the applicable Related Trustee (or provide
funds to Xxxxxx Mae or such Related Trustee for such payment, as the
case may be) as they become due and payable and shall promptly furnish
proof of such payment to
42
Xxxxxx Xxx or such Related Trustee, as applicable. In the event of
passage of any law or regulation permitting, authorizing or requiring
such Taxes to be levied, assessed or charged, which law or regulation in
the opinion of counsel to Xxxxxx Mae or any Related Trustee may prohibit
Owner from paying the Taxes to or for Xxxxxx Xxx or such Related
Trustee, Owner shall enter into such further instruments as may be
permitted by law to obligate Owner to pay such Taxes.
(s) FURTHER ASSURANCES. Owner, at the request of Xxxxxx Mae,
shall execute and deliver and, if necessary, file or record such
statements, documents, agreements, UCC financing and continuation
statements and such other instruments and take such further action as
Xxxxxx Xxx from time to time may request as reasonably necessary,
desirable or proper to carry out more effectively the purposes of this
Agreement or any of the other Transaction Documents or to subject the
Collateral to the lien and security interests of the Mortgage Documents
or to evidence, perfect or otherwise implement, to assure the lien and
security interests intended by the terms of the Transaction Documents or
in order to exercise or enforce its rights under the Transaction
Documents. In addition, Owner shall cooperate with each of the Rating
Agencies in connection with any review of the transactions described in
the Transaction Documents which may be undertaken by either of the
Rating Agencies after the date of this Agreement.
(t) MONITORING COMPLIANCE. Upon the request of Servicer, from
time to time, and at any time certification of the matters set forth
below is provided to the Issuer, the Related Trustee or any other
Governmental Authority, Owner shall promptly provide to Servicer the
following:
(i) Owner's certification of each Bond Property's compliance
with the rules qualifying such Bond Property for federal tax exemption
pursuant to Section 103 of the Code and the regulations issued under
such Section 103 and the requirements of the Regulatory Agreement with
respect to such Bond Property;
(ii) If any Property has received or receives a tax credit
allocation, Owner's certification of such Property's compliance with the
requirements of Section 42 of the Code and the regulations issued under
Section 42 and if the tax credits have not yet been syndicated, Owner's
report regarding progress in syndicating the tax credit allocation until
the syndication is completed;
(iii) Owner's certification of the Village Creek Project's
compliance with the requirements of the Village Creek Regulatory
Agreement; and
(iv) Such other documents, certificates and other information
as may be deemed reasonably necessary to enable Servicer to perform the
functions under the Servicing Agreement.
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(u) CONTINUING DISCLOSURE. Owner shall cooperate with the
Issuers, the Related Trustees and Xxxxxx Mae in complying with all
federal securities laws relating to continuing disclosure that are
applicable to the Bonds including, Rule 15c2-12, promulgated by the
Securities and Exchange Commission under the Securities Exchange Related
Act of 1934, as such rule may be amended from time to time.
(v) LEASES. Each unit in each Property will be leased pursuant
to the form lease delivered to, and acceptable to, Xxxxxx Xxx and
Servicer, with no material modifications to such approved form lease,
except as disclosed in writing to Xxxxxx Mae and Servicer.
SECTION 2.3 NEGATIVE COVENANTS OF OWNER. Owner enters into the
covenants and agreements with Xxxxxx Xxx set forth in this section 2.3.
Each covenant and agreement shall apply continuously during the term of
this Agreement:
(a) OTHER ACTIVITIES. Neither Owner nor General Partner shall:
(i) either directly or indirectly sell, transfer,
exchange or otherwise dispose of any of its assets except as
permitted hereunder, by the Mortgages or the Cash Management
Agreement;
(ii) take any action or omit to take any action that, if
taken or omitted, would adversely affect the exclusion of interest
on the Bonds from gross income for Federal income tax purposes
pursuant to Section 103 of the Code;
(iii) engage in any business or activity other than in
connection with (x) with respect to Owner, the ownership,
management and operation of the Properties and (y) with respect to
General Partner, the ownership, management and operation of Owner;
(iv) amend the Owner Organizational Documents or the
General Partner Organizational Documents, as the case may be, in
any manner, without the prior written consent of Xxxxxx Xxx;
(v) dissolve or liquidate in whole or in part;
(vi) merge or consolidate with any Person; or
(vii) use, or permit to be used, any Property for any
uses or purposes other than as a Multifamily Residential Property.
(b) NO AMENDMENTS TO TRANSACTION DOCUMENTS. Unless Xxxxxx Mae
shall otherwise consent in writing, Owner shall not agree to any
amendment of, supplement to, or waiver, modification, or termination of,
any of the terms or provisions of any Transaction
44
Document. Owner shall promptly give written notice to Xxxxxx Xxx of any such
amendment, supplement, waiver, modification or termination.
(c) COMPLIANCE WITH THE TRANSACTION DOCUMENTS. Owner shall not fail
to comply with any provision of the Transaction Documents to which it is
a party or by which it is bound.
(d) VALUE OF SECURITY. Owner shall not take any action which could
reasonably be expected to have any Material Adverse Effect.
(e) ZONING. Owner shall not initiate or consent to any zoning
reclassification of any Property or seek any variance under any zoning
ordinance or use or permit the use of any Property in any manner that
could result in the use becoming a nonconforming use under any zoning
ordinance or any other applicable land use law, rule or regulation.
(f) LIENS. Owner shall not create, incur, assume or suffer to exist
any Lien on any Property or any part of any Property, except the
Permitted Liens;
(g) SALE. Owner shall not sell, convey, transfer, assign or
otherwise relinquish any Property or any part of any Property without
the prior written consent of Xxxxxx Mae (which consent may be granted or
withheld in Xxxxxx Mae's discretion), or any interest in any Property,
other than (i) as may be permitted by the Mortgage Documents with
respect to such Property, or (ii) in accordance with the provisions of
section 4.2 or section 4.3, or (iii) to enter into Leases for units in a
Property to any tenant in the ordinary course of business.
(h) USE OF PROCEEDS. The proceeds from the issuance and sale of the
Bonds shall not be used for any purpose other than the refinancing of
the Bond Properties through the refunding of the Existing Bond Issues.
(i) PREPAYMENT OF A MORTGAGE LOAN. Notwithstanding anything to the
contrary contained in the Transaction Documents, Owner shall not make a
voluntary prepayment of any Mortgage Loan unless (i) Owner has complied
with the terms and provisions of the Mortgage Note relating to
prepayment, (ii) Owner has received the prior written consent of Xxxxxx
Mae; PROVIDED that Xxxxxx Xxx shall not withhold its consent unless
Xxxxxx Mae determines that all or any part of such prepayment by Owner
is not permitted by the terms of any Related Mortgage Note or may be
subject to avoidance or any other recovery or disgorgement pursuant to
the Bankruptcy Code (including sections 544, 547, 549 or 550 thereof) or
any other applicable bankruptcy or insolvency law, and (iii) with
respect to the prepayment in part or in full of the Facility Amount
prior to the tenth anniversary of the Facility, Xxxxxx Xxx has received
a Prepayment Premium pursuant to the Related Mortgage Note.
(j) INDEBTEDNESS. Owner shall not incur or be obligated at any time
with respect to aggregate Indebtedness (other than the Mortgage Loans),
in excess of $100,000.00.
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(k) SINGLE-PURPOSE ENTITY. Neither Owner nor General Partner
shall cease at any time during the term hereof to be a Single-Purpose
entity.
(l) PRINCIPAL PLACE OF BUSINESS. Owner shall not change its
principal place of business or the location of its books and records,
each as set forth in section 2.1(a), without first giving thirty (30)
days' prior written notice to Xxxxxx Mae.
SECTION 2.4 CERTAIN COVENANTS WITH RESPECT TO BOND TRANSACTIONS.
Owner agrees and covenants with Xxxxxx Xxx that, at all times
during the term of this Agreement:
(a) DEBT SERVICE FUND REQUIREMENT WITH RESPECT TO FIXED RATE
BOND TRANSACTIONS. Owner shall deposit with the Related Trustee with
respect to each issue of Related Bonds, on or before the date the
Related Mortgage Note is executed and delivered, for deposit into the
debt service fund with respect to each issue of Related Bonds, the
initial funding requirement required by the Rating Agency for such issue
of Related Bonds, which requirement shall not be less than one (1)
month's payment of interest and principal on the Related Mortgage Note.
(b) ASSIGNMENT OF MORTGAGE LOANS TO XXXXXX MAE. With respect
to each issue of Related Bonds, Owner acknowledges and agrees that
Xxxxxx Xxx is the assignee of the all of the Issuer's right, title and
interest in and to the Bond Property Loan Documents with respect to such
issue of Related Bonds and as such, Xxxxxx Mae shall be entitled to
exercise all rights and receive all benefits available to the owner and
holder of such Bond Property Loan Documents. Owner further acknowledges
and agrees that Xxxxxx Xxx has delegated or may delegate certain matters
and functions related to or arising under such Bond Property Loan
Documents to Servicer, as an independent contractor, pursuant to the
Servicing Agreement.
SECTION 2.5 CERTAIN COVENANTS WITH RESPECT TO VILLAGE CREEK PROJECT.
Owner agrees and covenants with Xxxxxx Mae that, at all times
during the term of this Agreement:
(a) COMPLIANCE WITH REGULATORY AGREEMENT. Owner shall at all
times comply in all material respects with all provisions of the Village
Creek Regulatory Agreement, including, all applicable reporting
requirements, and all rental limitations and restrictions. In addition,
Owner shall immediately cure all past failures to comply with such
Village Creek Regulatory Agreement.
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(b) INDEMNIFICATION WITH RESPECT TO VILLAGE CREEK REGULATORY
AGREEMENT. Owner hereby agrees to indemnify, hold harmless and defend
Xxxxxx Xxx from and against, any and all claims, losses, liabilities
(including penalties), actions, suits, judgments, demands, damages,
costs, charges or expenses (including reasonable fees and expenses of
attorneys, consultants and auditors and costs of investigation) and
obligation whatsoever of any nature arising out of, relating to or in
connection with the Village Creek Regulatory Agreement, including, any
violation by Owner or any predecessor in interest to the Village Creek
Project of any of the terms, conditions, requirements or restrictions of
the Village Creek Regulatory Agreement. Notwithstanding any permitted
transfer of the Village Creek Project to another Person or the release
of the Village Creek Project from the lien of the Related Mortgage,
Owner shall remain obligated to indemnify Xxxxxx Mae pursuant to this
section 2.5(b) with respect to acts occurring prior or subsequent to the
date of permitted transfer of legal title to such Village Creek Project
or release of such Village Creek Project from the lien of the Related
Mortgage, as applicable (irrespective of when a claim is actually made).
The indemnity provisions of this section 2.5(b) shall survive the
termination of this Agreement and foreclosure or release of the Related
Mortgage or other disposition of the Village Creek Project to the
fullest extent permitted by law.
(c) TERMINATION OF VILLAGE CREEK REGULATORY AGREEMENT.
Notwithstanding anything herein to the contrary, on or before March 31,
1998 Owner shall cause the Village Creek Regulatory Agreement to be
fully satisfied and discharged of record by obtaining appropriate
release documentation from each party-in-interest to the Village Creek
Regulatory Agreement and causing such release documentation to be
recorded in the land records of Jefferson County, Colorado. Owner's
satisfaction of the requirements of this section 2.5(c) shall be
evidenced by Owner's delivery to Xxxxxx Xxx of an endorsement to Xxxxxx
Mae's title policy with respect to the Village Creek Project, in form
and substance acceptable to Xxxxxx Xxx, confirming that the Village
Creek Regulatory Agreement is no longer an exception to the title
insurance provided thereunder.
ARTICLE III.
FEES AND EXPENSES; INDEMNIFICATION
SECTION 3.1 FEES AND EXPENSES.
Owner hereby agrees absolutely and unconditionally to pay, or
cause to be paid, to Xxxxxx Mae or Servicer, as the case may be, the
following:
(a) any and all reasonable fees, costs, charges and expenses
(including the reasonable fees and expenses of attorneys, accountants
and other experts) which Xxxxxx Xxx or Servicer may pay or incur in
connection with any payment under any Related Xxxxxx Mae Pass-Through
Certificate, including payments of any fees and charges in connection
with any accounts established to facilitate payments under any Related
Xxxxxx Xxx Pass-Through Certificate, or
47
the performance of Xxxxxx Mae's obligations under any Related Xxxxxx Xxx
Pass-Through Certificate;
(b) the amount of any fees, costs, or charges or expenses
(including the reasonable fees and expenses of attorneys, accountants
and other experts) incurred by Xxxxxx Mae or Servicer in connection with
the administration or enforcement of, or preservation of rights or
remedies under, this Agreement or any of the other Transaction Documents
or in connection with the foreclosure upon, sale of or other disposition
of any security granted pursuant to the Transaction Documents;
(c) any and all reasonable fees, costs, charges and expenses
(including the reasonable fees and expenses of attorneys, accountants
and other experts) incurred by Xxxxxx Xxx or Servicer in connection with
the disbursement or application of insurance or condemnation awards,
proceeds, payments or damages to the costs of restoration and repair of
any Property;
(d) any payments or advances made by Xxxxxx Mae or Servicer on
behalf of Owner pursuant to any of the Transaction Documents;
(e) all reasonable expenses incurred in connection with or related
to the execution and delivery of the Related Xxxxxx Xxx Pass-Through
Certificates, the sale of the Bonds or the Obligations and the
preparation and review of this Agreement and the other Transaction
Documents and the consummation of the transactions contemplated hereby
and thereby, including fees payable to any agencies rating the Bonds or
the Obligations from which ratings were requested and received, any tax
or governmental charge imposed in connection with the execution and
delivery of the Related Xxxxxx Mae Pass-Through Certificates and the
reasonable fees and disbursements of Xxxxxx Mae's and Servicer's counsel
and accountants, including fees and expenses relating to any (i)
amendments, consents or waivers to this Agreement or any of the other
Transaction Documents (whether or not any such amendments, consents or
waivers are entered into), (ii) requests to evaluate any substitute or
additional collateral or (iii) proposed or actual release or
substitution of a Property; and
(f) all documentary stamp, recording, transfer, mortgage,
intangible or filing or other taxes or fees and any and all liabilities
with respect to, or resulting therefrom which may be payable or
determined to be payable in connection with the execution and delivery
of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of or filing of record,
recordation, release or discharge of, this Agreement, the Mortgages, or
any other Transaction Document.
All amounts to be paid pursuant to clauses (a) through (f) of this
section 3.1 shall be due and payable in accordance with section 3.2.
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SECTION 3.2 PAYMENT OF FEES AND EXPENSES.
(a) BOND FEES. Owner shall pay, or cause to be paid, when due,
the ONGOING fees and expenses of the Issuer, the Related Trustee and any
rebate analyst (collectively, the "BOND FEES") with respect to each
issue of Related Bonds to the extent that such fees or expenses have not
been included as part of the Mortgage Note Rate under the Related
Mortgage Note. Such Bond Fees shall be paid by Owner in accordance with
the terms of the Related Bond Documents.
(b) PAYMENT. All fees, costs and expenses incurred from time
to time in accordance with section 3.1 or section 3.2(a) above, in
connection with the Bonds or the Mortgage Loans (excluding those fees
which are included in the Mortgage Note Rate of each Related Mortgage
Note), or related to any other matter contemplated in this Agreement or
in any other Transaction Document, shall be paid when due by Owner
separate and apart from payments due under the Mortgage Loan and shall
not be included in the Mortgage Note Rate of each Related Mortgage Note.
Xxxxxx Mae shall not have (x) any liability, responsibility or
accountability for the payment, remittance or handling of any such fees,
costs or expenses, or (y) any obligation under any Related Xxxxxx Xxx
Pass-Through Certificate or otherwise to pay any such fees, costs or
expenses; PROVIDED, HOWEVER, that Xxxxxx Mae shall have the right, but
not the obligation, to pay any fees, costs or expenses on behalf of
Owner if Owner fails to pay any such fees, costs or expenses when due.
Any fees, costs or expenses paid by Xxxxxx Xxx (a "Reimbursable
Advance") shall be due and payable upon demand and shall accrue interest
at the Reimbursable Advance Rate until paid in full by Owner.
(c) PREPAYMENT PREMIUM. Owner agrees to pay the Prepayment
Premium pursuant to each Related Mortgage Note whether prepayment of the
Related Mortgage Note is voluntary or involuntary (in connection with
acceleration of the unpaid principal balance of a Related Mortgage Note)
or the Related Mortgage is satisfied or released by foreclosure (whether
by power of sale or judicial proceeding) and in lieu of foreclosure or
by any other means.
SECTION 3.3 GUARANTY FEE; OLYMPIAD PROJECT STAND-BY FEE: EDEN
CROSSING PROJECT STAND-BY FEE.
(a) GUARANTY FEE. In addition to any other fees and amounts
payable to Xxxxxx Mae under this Agreement or the other Transaction
Documents, Owner shall, in consideration of Xxxxxx Mae's providing the
Related Xxxxxx Mae Pass-Through Certificates with respect to each issue
of Related Bonds and so long as the Related Xxxxxx Xxx Pass-Through
Certificates shall remain in effect, be responsible for paying to
Servicer, for remittance to Xxxxxx Mae, a guaranty fee, which shall be
included in the actual fixed rate of interest set forth in and payable
under the Related Mortgage Note as set forth on Exhibit A.
(b) OLYMPIAD PROJECT STAND-BY FEE. In addition to any other
fees and amounts payable to Xxxxxx Xxx under this Agreement or the other
Transaction Documents, Owner shall, in consideration of Xxxxxx Mae's
agreement to provide the Olympiad Credit
49
Enhancement, pay to Servicer, for remittance to Xxxxxx Xxx, a stand-by
credit enhancement fee, which shall be equal to $446 per month (the
"OLYMPIAD STAND-BY FEE"). The Olympiad StandBy Fee shall be payable
monthly, on the first Business Day of each calendar month from and
including August 1, 1996 to the earlier to occur of (i) the Olympiad
Refunding Closing Date or (ii) the Olympiad Commitment Termination Date.
(c) EDEN CROSSING PROJECT STAND-BY FEE. In addition to any
other fees and amounts payable to Xxxxxx Mae under this Agreement or the
other Transaction Documents, Owner shall, in consideration of Xxxxxx
Mae's agreement to provide the Eden Crossing Credit Enhancement, pay to
Servicer, for remittance to Xxxxxx Mae, a stand-by credit enhancement
fee, which shall be equal to $500.00 per month (the "EDEN CROSSING
STAND-BY FEE"). The Eden Crossing Stand-By Fee shall be payable monthly
in arrears, on the first Business Day of each calendar month from and
including September 1, 1996 to the earlier to occur of (i) the Eden
Crossing Closing Date, (ii) closing of the Eden Closing Substitution
Transaction, or (iii) the Eden Crossing Commitment Termination Date.
SECTION 3.4 INDEMNIFICATION.
(a) INDEMNIFICATION. Owner hereby releases Xxxxxx Xxx,
Servicer and their respective officers, directors, members,
shareholders, officials, agents, independent contractors and employees
and each of them and each Person, if any, who controls Xxxxxx Mae or
Servicer within the meaning of either Section 15 of the Securities Act
of 1933, as amended, or Section 20 of the Securities Exchange Act of
1934, as amended (each an "INDEMNIFIED PARTY"), from, and covenants and
agrees to indemnify, hold harmless and defend each such indemnified
party from and against, any and all claims, losses, liabilities
(including penalties), actions, suits, judgments, demands, damages,
costs, charges or expenses (including reasonable fees and expenses of
attorneys, consultants and auditors and costs of investigation) and
obligations whatsoever (herein collectively referred to as
"LIABILITIES") of any nature arising out of, relating to or in
connection with: (i) the transactions provided for in this Agreement or
the other Transaction Documents or otherwise in connection with any
Property, the Bonds, the Mortgage Loans or the execution or amendment of
any document relating thereto; (ii) the approval of the refinancing of
the Bond Properties or the making of the Mortgage Loans; (iii) any act
or omission of Owner or any of its Affiliates, agents, servants,
employees or licensees, in connection with the Mortgage Loans, the
Properties, this Agreement or the other Transaction Documents; (iv) the
issuance and sale, resale or remarketing of any Bonds or any
certifications or representations made by any person (other than any
Issuer or the party seeking indemnification in connection therewith),
including, (A) any untrue statement or alleged untrue statement of a
material fact contained in any offering documents relating to any of the
Bonds or arising out of or based upon any omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (B) the
violation by Owner of any Federal, state or local securities or real
estate laws, rules or regulations in connection with the issuance, offer
and sale of any of the Bonds; (v) the operations of any Property, or the
conditions, occupancy, use, possession, conduct or management of work
done in or about, or from the planning, design, acquisition,
installation or
50
construction of any Property, or any part of any Property; (vi) the
exercise by Xxxxxx Xxx or Servicer of their respective powers or duties
under this Agreement or any other Transaction Document; (vii) any
Related Trustee's acceptance or administration of the trusts created by
the Related Indenture and the exercise of its powers or duties
thereunder, and under any Regulatory Agreement or any other agreements
in connection therewith to which it is a party; (viii) errors,
omissions, interruptions, losses or delays in transmission or delivery
of any messages by mail, cable, telegraph, telex, telephone or
otherwise; (ix) any other circumstances whatsoever in making or failing
to make payment under any Related Xxxxxx Xxx Pass-Through Certificate;
and (x) all reasonable costs, counsel fees, expenses or liabilities
incurred in connection with any such claim or proceeding referred to in
clauses (i) through (ix) above; PROVIDED, HOWEVER, that the foregoing
indemnification shall not be effective to the extent such Liabilities
are caused by the gross negligence or willful misconduct of an
indemnified party. Neither Xxxxxx Xxx nor Servicer shall have any
liability to Owner or to any other person as a result of any reduction
of the credit rating of any of the Bonds or any deterioration of Xxxxxx
Mae's financial condition, nor shall any such reduction or deterioration
reduce or diminish in any respect Owner's obligations under this
Agreement. In the event that any action or proceeding is brought against
any indemnified party with respect to which indemnity may be sought
hereunder, Owner, upon written notice from the indemnified party, shall
assume the investigation and defense thereof, including the employment
of counsel selected by Owner, but acceptable to the indemnified party,
and shall assume the payment of all expenses related thereto, with full
power to litigate, compromise or settle the same in its discretion,
PROVIDED that if such settlement or compromise shall contain or infer an
admission regarding, or relating in any way to, any indemnified party,
such indemnified party shall have the right to review and approve or
disapprove any such compromise or settlement. Each indemnified party
shall have the right, if such indemnified party shall conclude in good
faith that a conflict of interest exists, to employ separate counsel in
any such action or proceeding and participate in the investigation and
defense thereof, and Owner shall pay the reasonable fees and expenses of
such separate counsel. If separate counsel are employed as described
above, Owner and any such indemnified party agree to cooperate as may
reasonably be required in order to ensure the proper and adequate
defense of any such action, suit or proceeding, including making
available to each other, and their counsel and accountants, all books
and records relating to such action, suit or proceeding. If any such
counsel determines that the rendering of such assistance will adversely
affect the defense or interests of its client, such counsel shall not be
required to comply with the terms of the immediately preceding sentence.
Notwithstanding any permitted transfer of any Property to
another Person or the release of any Property from the lien of any
Mortgage, Owner shall remain obligated to indemnify each indemnified
party pursuant to this section 3.4 with respect to acts occurring prior
to the date of permitted transfer of legal title to such Property or
release of such Property from the lien of any Mortgage, as applicable
(irrespective of when a claim is actually made).
(b) SURVIVAL. The indemnity provisions of this section 3.4 shall
survive the termination of this Agreement and foreclosure or release of
the Mortgages or other disposition of the Properties to the fullest
extent permitted by law.
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SECTION 3.5 LIABILITY OF OWNER.
The obligations of Owner under this Agreement shall be
absolute, unconditional and irrevocable and shall be paid and performed
strictly in accordance with the terms of this Agreement under all
circumstances whatsoever, including the following circumstances: (a) any
invalidity or unenforceability of this Agreement or any of the other
Transaction Documents or any other agreement or instrument related to
the Transaction Documents; (b) any amendment or waiver of, or any
consent to or departure from, the terms of this Agreement, any Related
Xxxxxx Xxx Pass-Through Certificate, any of the other Transaction
Documents, or any other agreement or instrument related to the
Transaction Documents, any extensions of time or other modifications of
the terms and conditions for any act to be performed in connection with
this Agreement, any Related Xxxxxx Mae Pass-Through Certificate or any
of the other Transaction Documents, other than any amendment, waiver,
consent, extension or modification entered into in strict accordance
with the terms of this Agreement; (c) the existence of any claim,
set-off, defense or other right which Owner may have at any time against
any Issuer, any Related Trustee, Xxxxxx Xxx, Servicer or any other
Person, whether in connection with this Agreement, any of the other
Transaction Documents, any Property, or any unrelated transaction; (d)
the surrender or impairment of any security for the performance or
observance of any of the agreements or terms of this Agreement or the
other Transaction Documents; (e) defect in title to any Property, any
acts or circumstances that may constitute failure of consideration,
destruction of, damage to or condemnation of any Property, commercial
frustration of purpose, or any change in the tax or other laws of the
United States of America or of the State or any political subdivision of
either; (f) the breach by any Issuer, any Related Trustee, Servicer,
Xxxxxx Mae or any other Person of its obligations under any Transaction
Document or (g) any other circumstance, happening or omission whatsoever.
SECTION 3.6 XXXXXX XXX AND SERVICER NOT LIABLE.
Neither Xxxxxx Mae, Servicer nor any of their officials,
officers, directors, members, shareholders, agents, independent
contractors or employees shall be responsible for or liable to Owner,
its Affiliates or any of Owner's or its Affiliates' members, partners,
Affiliates, independent contractors or employees for (i) any act or
omission of Xxxxxx Xxx, Servicer or any other Person made in good faith
with respect to the validity, sufficiency, accuracy or genuineness of
documents, or of any endorsement(s) thereon (except for documents and
endorsements provided by Xxxxxx Mae or Servicer, as applicable), even if
such documents should in fact prove to be in any or all respects
invalid, insufficient, fraudulent or forged, (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Related Xxxxxx Xxx Pass-Through Certificate or
the rights or benefits under any Related Xxxxxx Mae Pass-Through
Certificate or proceeds under any Related Xxxxxx Xxx Pass-Through
Certificate, in whole or in part, that may prove to be invalid or
ineffective for any reason, (iii) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex, telecopier or otherwise; (iv) any consequences arising
from causes beyond the control of Xxxxxx Mae. In furtherance and not in
limitation of the foregoing, Xxxxxx Xxx or Servicer may accept documents
that appear on their face to be valid
52
and in order, without any responsibility for further investigation. None
of the above shall affect, impair, or prevent the vesting of rights or
powers of Xxxxxx Xxx or Servicer under this Agreement. In furtherance
and extension and not in limitation of the specific provision set forth
above, any action taken or omitted by Xxxxxx Mae under or in connection
with any Transaction Document or any related certificates or other
documents, if taken or omitted in good faith, shall be binding upon
Owner, the Related Trustee and the Issuer and shall not put Xxxxxx Xxx
under any resulting liability to any of them.
SECTION 3.7 WAIVERS AND CONSENTS.
OWNER AGREES TO BE BOUND BY THIS AGREEMENT AND TO THE EXTENT
PERMITTED BY LAW, (A) WAIVES AND RENOUNCES ANY AND ALL REDEMPTION AND
EXEMPTION RIGHTS AND THE BENEFIT OF ALL VALUATION AND APPRAISAL
PRIVILEGES AGAINST THE INDEBTEDNESS AND OBLIGATIONS EVIDENCED BY THIS
AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS OR BY ANY EXTENSION OR
RENEWAL OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS; (B)
WAIVES PRESENTMENT AND DEMAND FOR PAYMENT, NOTICES OF NONPAYMENT AND OF
DISHONOR, PROTEST OF DISHONOR AND NOTICE OF PROTEST; (C) WAIVES ALL
NOTICES IN CONNECTION WITH THE DELIVERY AND ACCEPTANCE OF THIS AGREEMENT
AND THE OTHER TRANSACTION DOCUMENTS AND ALL OTHER NOTICES IN CONNECTION
WITH THE PERFORMANCE, DEFAULT OR ENFORCEMENT OF THE PAYMENT OF ANY
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS
EXCEPT AS REQUIRED BY THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS;
(D) AGREES THAT ITS LIABILITIES UNDER THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS SHALL BE UNCONDITIONAL AND WITHOUT REGARD TO THE
LIABILITY OF ANY OTHER PERSON; AND (E) AGREES THAT ANY CONSENT, WAIVER
OR FORBEARANCE UNDER THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS
WITH RESPECT TO AN EVENT SHALL OPERATE ONLY FOR SUCH EVENT AND NOT FOR
ANY SUBSEQUENT EVENT.
SECTION 3.8 APPLICATION OF PAYMENTS.
Payments made by Owner in respect of the Obligations shall be
applied in the manner provided in the Mortgage Documents.
SECTION 3.9 PLEDGE OF RIGHTS TO CERTAIN FUNDS AND INVESTMENTS.
To secure Owner's obligations under this Agreement, to the
extent, if any, that Owner retains an interest in and to all funds and
accounts and investments of funds and accounts now or hereafter held by:
(a) the Related Trustees under the Related Indentures as security for
the payment of the Bonds, and any and all loan funds, escrow funds,
revenue funds, debt service funds, reserve funds, redemption funds and
other funds and securities and other instruments
53
comprising investments of any of the foregoing and interest and other
income derived from any of the foregoing held as security for the
payment of the Bonds, Owner hereby pledges and assigns to Xxxxxx Mae and
grants to Xxxxxx Xxx a security interest in such funds, accounts, and
investments (which pledge, assignment and grant shall be subject only to
the rights of each Related Trustee under the Related Indenture); and (b)
Servicer with respect to payments payable under any of the Transaction
Documents including the Replacement Reserve Accounts and any and all
escrow funds, completion repair funds and other funds, and my securities
and other instruments comprising investments of any of the foregoing and
interest income and other proceeds derived from any of the foregoing,
Owner hereby pledges and assigns to Xxxxxx Xxx and grants to Xxxxxx Mae
a security interest in such funds, accounts and instruments. Owner
covenants and agrees that it will defend Xxxxxx Mae's rights and
security interests created by this section 3.9 against the claims and
demands of all Persons. In addition to its other rights and remedies
under this Agreement and the other Transaction Documents, Xxxxxx Mae
shall have all the rights and remedies of a secured party under the
Uniform Commercial Code or other applicable law with respect to the
security interests created by this section 3.9, subject only to the
rights of the Related Trustees under the Related Indentures. Xxxxxx
Mae's rights under this section 3.9 are in addition to, and not in lieu
of, its rights and remedies described elsewhere in this Agreement.
Notwithstanding the foregoing, Owner and Xxxxxx Mae acknowledge and
agree that any cash collateral held as of the Xxxxxx Xxx Facility
Closing Date by or on behalf of Sumitomo Trust and Banking Company
Limited in connection with the Existing Bond Issues shall be excluded
from the grants, pledges and assignments provided in this section 3.9.
SECTION 3.10 CASH COLLATERAL.
In addition to the pledge and security interest granted to
Xxxxxx Mae by Owner pursuant to section 3.9, as separate and additional
security for Owner's obligations under this Agreement, Owner shall
pledge and assign to Xxxxxx Xxx, and xxxxx to Xxxxxx Xxx a first
priority security interest in, all of Owner's right, title and interest
in and to each Property Account, the Central Account and the Cash
Collateral by executing and delivering to Xxxxxx Mae the Cash Management
Agreement on the Xxxxxx Xxx Facility Closing Date. Owner covenants and
agrees that it will defend Xxxxxx Mae's rights and security interest
created by this section 3.10 and the Cash Management Agreement against
the claims and demands of all Persons. The Property Accounts, the
Central Account and the Cash Collateral shall be pledged, assigned,
secured, maintained, invested and disposed of pursuant to the Cash
Management Agreement.
SECTION 3.11 NONRECOURSE OBLIGATIONS.
(a) NON-RECOURSE LIABILITY. Subject to the provisions of
subsections 3.11(b) and 3.11(c) and notwithstanding any other provision
in the Related Mortgage Notes, the Mortgages or any other Transaction
Document, the personal liability of Owner, General Partner, each
Guarantor and their respective affiliates, shareholders, members,
partners, officers, director's and employees to pay the principal and
interest on the debt evidenced by the Related Mortgage Notes and to
perform the other Obligations shall be limited to (i) the real and
personal property described as "Property" in the Mortgages, (ii) the
personal property described in and
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pledged under any other Mortgage Document, (iii) the rents, profits,
issues, products and income of the Properties received or collected by
or on behalf of Owner (the "RENTS AND PROFITS") to the extent such
receipts are necessary, first, to pay the Operating Expenses then due
and payable as of the time of receipt of such Rents and Profits, and
then, to pay principal and interest due under the Related Mortgage
Notes, any other sums due under the Mortgages or any other Mortgage
Document and any other Obligations then due and owning to Xxxxxx Xxx
under this Agreement, except to the extent that Owner did not have the
legal right, because of a bankruptcy, receivership or similar judicial
proceeding, to direct the disbursement of such sums. Except as provided
in sections 3.11(b) and (c), Xxxxxx Mae shall not seek (A) any judgment
for a deficiency against Owner, General Partner or any Guarantor, or
Owner's, General Partner's or any Guarantor's heirs, legal
representatives, successors or assigns, in any action to enforce any
right or remedy under any of the Related Mortgage Notes, the Mortgages,
this Agreement or any other Transaction Document, or (B) any judgment on
any of the Related Mortgage Notes or the Obligations except as may be
necessary in any action brought under any of the Mortgages to enforce
the lien against the Property encumbered thereby or to exercise any
remedies under any other Mortgage Documents.
(b) EXCEPTIONS TO NON-RECOURSE LIABILITY. If, without obtaining
Xxxxxx Mae's prior written consent, (i) a "Transfer" shall occur which,
pursuant to Uniform Covenant 19 of the any of the Mortgages, gives
Xxxxxx Mae the right, at its option, to declare all sums secured by any
such Mortgage immediately due and payable, (ii) Owner shall voluntarily
encumber or permit the encumbrance of any Property with the lien of any
"Subordinate Instrument" (as defined in the Related Mortgage with
respect to such Property) in connection with any financing by Owner, or
(iii) Owner shall fail to remain a Single-Purpose entity or to comply
with any of the provisions of subsection 2.3(a)(iii) or 2.3(a)(iv), any
of such events shall constitute an Event of Default hereunder and under
the Mortgage Documents, and if such Event of Default shall continue for
thirty (30) days then, from and after the date that is thirty (30) days
after such event, (x) section 3.11(a) shall not apply, and (y) Owner,
General Partner and each Guarantor shall be personally liable on a joint
and several basis for full recourse liability under the Related Mortgage
Notes, this Agreement and the other Mortgage Documents. Notwithstanding
the foregoing, with respect to clause (iii) above, the thirty (30) day
period referenced in the preceding sentence shall commence upon Owner's
receipt of notice of Owner's failure to remain a Single-Purpose entity
or to comply with any of the provisions of such subsections 2.3(a)(iii)
or 2.3(a)(iv).
(c) EXCEPTIONS TO EXCULPATION. Notwithstanding section 3.11(a),
Owner, General Partner and each Guarantor shall be personally liable on
a joint and several basis in the amount of any loss, damage or cost
(including reasonable attorneys' fees and expenses) resulting from (1)
fraud or material misrepresentation by Owner, General Partner or any
Guarantor, or Owner's, General Partner's or any Guarantor's agents or
employees, in connection with obtaining the Mortgage Loans evidenced by
the Related Mortgage Notes, obtaining the credit enhancement evidenced
by the Related Xxxxxx Xxx Pass-Through Certificates, or in complying
with any of Owner's Obligations, (2) Insurance Proceeds, Condemnation
Proceeds, security deposits from tenants and other sums or payments
received by or on behalf of Owner in its
55
capacity as owner of the Properties and not applied in accordance with
the provisions of the Mortgages (except to the extent that Owner did not
have the legal right, because of a bankruptcy, receivership or similar
judicial proceeding, to direct disbursement of such sums or payments),
(3) all Rents and Profits (except to the extent that Owner did not have
the legal right, because of a bankruptcy, receivership or similar
judicial proceeding, to direct the disbursement of such sums) received
by or on behalf of Owner in its capacity as owner of the Properties and
not applied first (a) to the payment of the Operating Expenses as such
Operating Expenses become due and payable, and then (b) to the payment
of principal and interest due under the Related Mortgage Notes, any
other sums due under the Mortgages or any other Mortgage Document and
any other Obligations then due and owning to Xxxxxx Mae under this
Agreement, (4) Owner's failure to deposit all Gross Cash Flow into the
Property Accounts as required in accordance with the Cash Management
Agreement (except to the extent that Owner did not have the legal right
because of a bankruptcy, receivership or similar judicial proceeding to
deposit such sums), (5) Owner's failure following an Event of Default to
deliver to Xxxxxx Xxx on demand all Rents and Profits and security
deposits (except to the extent that Owner did not have the legal right
because of a bankruptcy, receivership or similar judicial proceeding to
direct disbursement of such sums), (6) Owner's failure following an
Event of Default to deliver to Xxxxxx Mae on demand all books and
records relating to the Properties, (7) Owner's indemnification
obligations set forth in section 3.4(a) and in section 2.5(b), or (8) or
relating to Hazardous Material or compliance with Hazardous Materials
Laws to the full extent of any losses or damages (including those
resulting from diminution in value of any Property) incurred by Xxxxxx
Xxx as a result of the existence of such Hazardous Material or failure
to comply with Hazardous Materials Laws or the obligations of Owner with
respect to Hazardous Materials as set forth in the Mortgages.
Notwithstanding the foregoing, Owner, General Partner and each
Guarantor shall have no liability for Rents and Profits which were
distributed in any fiscal year, provided that Owner paid all of the
Operating Expenses, all amounts due under the Related Mortgage Notes,
this Agreement, the Mortgages, and the other Transaction Documents and
all other debt service relating to the Properties and Owner for that
fiscal year.
(d) NO IMPAIRMENT OF CERTAIN RIGHTS. No provision of this section
3.11 shall (i) affect any guaranty or similar agreement executed in
connection with the debt evidenced by the Related Mortgage Notes or
otherwise in connection with the Obligations, (ii) release or reduce the
Obligations or the debt evidenced by the Related Mortgage Notes, (iii)
impair the right of Xxxxxx Mae to enforce the provisions of paragraph 6
of the portion of each Mortgage identified as the "Multifamily
Instrument", (iv) impair the lien of any Mortgage, (v) impair the right
of Xxxxxx Xxx to enforce the provisions of the Cash Management
Agreement, any Replacement Reserve Agreement, the Assignment of
Management Agreement, or any other agreement defined as an "Ancillary
Collateral Agreement" in any Mortgage or (vi) limit Owner's obligation
to pay documentary stamp, recording, transfer, mortgage, intangible,
filing or other taxes or fees and other liabilities payable by Owner
pursuant to section 3.1(f).
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ARTICLE IV.
ALLOCABLE FACILITY AMOUNTS; SUBSTITUTION, RELEASE, AND ADDITION
OF PROPERTIES
SECTION 4.1 ALLOCABLE FACILITY AMOUNT: FACILITY REDUCTION CREDITS.
(a) ALLOCABLE FACILITY AMOUNT. Xxxxxx Mae shall determine the
Allocable Facility Amount for each Property on or before each annual
Determination Date, commencing with the Determination Date in 1997. The
Allocable Facility Amount, once determined by Xxxxxx Xxx as aforesaid,
shall remain in effect until the next Determination Date, unless sooner
modified in connection with the addition of a New Property pursuant to
section 4.4. As of the Xxxxxx Mae Facility Closing Date, the Allocable
Facility Amount of each Property is as set forth on Exhibit H attached
hereto.
(b) FACILITY REDUCTION CREDITS. Upon a Release of any Bond Property
pursuant to section 4.3 or the Permitted Transfer of a Bond Property
pursuant to section 4.5, Owner shall receive a credit (a "FACILITY
REDUCTION CREDIT") equal to the amount, if any, by which (i) the
Facility Amount of such Bond Property at the time of such release or
Permitted Transfer, EXCEEDS (ii) the Required Facility Reduction. Such
Facility Reduction Credit may be used by Owner in satisfaction of the
Required Facility Reduction in connection with the subsequent release of
an Additional Property pursuant to section 4.3.
SECTION 4.2 SUBSTITUTION OF ADDITIONAL MORTGAGED PROPERTIES.
An Additional Mortgaged Property may be released from the lien
of a Mortgage and a New Additional Property substituted therefor if each
of the following conditions are met:
(a) The New Additional Property has a Value equal to or
greater than the product of 125% (the "SUBSTITUTION PERCENTAGE")
multiplied by the Minimum Substitute Property Value of the Released
Property;
(b) The New Additional Property has Net Operating Income (as
determined by Xxxxxx Xxx in its discretion) for the 12 month period
ending within 60 days of the date this test is applied, equal to or
greater than the Net Operating Income (as determined by Xxxxxx Mae in
its discretion) of the Additional Mortgaged Property being released from
the lien for the corresponding 12 month period multiplied by the
Substitution Percentage;
(c) No Event of Default or Potential Event of Default shall
have occurred and be continuing;
(d) Owner shall cause the Released Property to be immediately
conveyed by Owner to AIMCO OP, or such other purchaser as Owner may
otherwise determine;
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(e) The New Additional Property meets all of Xxxxxx Mae's then
applicable underwriting criteria for new loans secured by Multifamily
Residential Property;
(f) All documentation relating to the foregoing is acceptable
to Xxxxxx Mae in its discretion in all respects, including legal
opinions, title insurance, Security Instruments, Replacement Reserve
Agreements, assignments and any amendments to this Agreement or the
other Transaction Documents; and
(g) With respect to each proposed New Additional Property,
Owner shall pay Xxxxxx Xxx and Servicer a due diligence fee plus all
costs and expenses (including legal fees and expenses) reasonably
incurred by Xxxxxx Mae or Servicer in connection with the foregoing.
Such amounts shall be paid by Owner promptly upon receipt of invoices
therefor, and shall be payable regardless of whether the property
substitution does or does not (for any reason) ultimately occur.
SECTION 4.3 RELEASE OF PROPERTIES.
A Property may be released from the lien of a Mortgage without
another Multifamily Residential Property being substituted therefor if
each of the following conditions are met:
(a) Owner shall either redeem or otherwise remove Bonds from
the Xxxxxx Xxx Credit Facility and/or post cash collateral in a manner
acceptable to Xxxxxx Mae in its discretion, in either case in an amount
equal to 110% of the Allocable Facility Amount of the Released Property
(the "REQUIRED FACILITY REDUCTION"); the following shall be credited
toward such Required Facility Reduction: (i) if the Released Property is
a Bond Property, the amount of Bonds outstanding with respect to such
Bond Property immediately prior to such release (provided, that, the
requirements of section 4.3(c) have been satisfied), plus (ii) the
amount of any other Bonds redeemed by Owner to obtain such release, plus
(iii) the amount of any cash collateral ("FACILITY REDUCTION CASH
COLLATERAL") that has been deemed acceptable by Xxxxxx Xxx and posted by
Owner to obtain such release, plus (iv) if the Released Property is an
Additional Property, the amount of any Facility Reduction Credit that
Owner authorizes and instructs Xxxxxx Mae to apply to such Required
Facility Reduction;
(b) No Event of Default or Potential Event of Default shall
have occurred and be continuing;
(c) If the Released Property is a Bond Property, then the
Related Xxxxxx Xxx Pass-Through Certificate shall terminate on or before
the date the Released Property is released from the lien of any Related
Mortgage;
(d) Owner shall cause the Released Property to be immediately
conveyed by Owner to AIMCO OP or such other purchaser as Owner may
determine;
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(e) All documentation relating to the foregoing is acceptable
to Xxxxxx Mae in all respects, including legal opinions, release
documentation and any amendments to this Agreement or the other
Transaction Documents; and
(f) Owner shall pay, with respect to each Released Property,
to Xxxxxx Xxx and Servicer, a due diligence fee plus all costs and
expenses (including legal fees and expenses) reasonably incurred by
Xxxxxx Mae or Servicer in connection with the foregoing. Such amounts
shall be paid by Owner promptly upon receipt of invoices therefor, and
shall be payable regardless of whether the property is or is not (for
any reason) ultimately released from the lien of a Mortgage.
SECTION 4.4 ADDITION OF NEW PROPERTIES TO THE CREDIT FACILITY.
(a) At the request of Owner and Servicer, Xxxxxx Xxx may, from time
to time, consent to the addition of a New Bond Property (and to the
extent required to meet the underwriting requirements established by
Xxxxxx Mae with respect to the addition of a New Bond Property, a New
Additional Property) to the Xxxxxx Xxx Credit Facility; PROVIDED,
HOWEVER, that:
(i) such consent may be granted or withheld by Xxxxxx Mae in its
discretion;
(ii) the underwriting with respect to each such New Property shall
be conducted by Servicer and reviewed by Xxxxxx Xxx and shall take into
account all facts and circumstances deemed relevant by Servicer and
Xxxxxx Mae in their discretion;
(iii) the terms and conditions relating to the addition of such New
Property shall be determined by Servicer and Xxxxxx Xxx in their
discretion;
(iv) all documentation deemed necessary by Servicer or Xxxxxx Mae
for the addition of such New Property shall be fully executed and
delivered by each party thereto and shall be in form and substance
acceptable to Servicer and Xxxxxx Xxx in their discretion;
(v) any loan made in conjunction with the addition of a new Bond
Property or a New Additional Property must be originated by an
independent third-party lender or issuer and otherwise comply with the
other Xxxxxx Mae Charter Act requirements for multifamily loans; and
(vi) Owner shall pay or cause to be paid all fees, costs, charges
and expenses (including the fees and expenses of attorneys, accountants
and other experts) incurred by or on behalf of Xxxxxx Xxx or Servicer in
connection with the addition of such New Property in accordance with
section 3.1.
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(b) The addition of any New Bond Property and any New Additional
Property to the Credit Facility shall become effective only upon
satisfaction of all requirements in section 4.4(a) and Xxxxxx Mae's
execution and delivery to Owner of a Confirmation of Addition of New
Property, substantially in the form of Exhibit E attached hereto (a "NEW
PROPERTY CONFIRMATION"), which New Property Confirmation shall specify
whether such New Property is a New Bond Property or a New Additional
Property. Upon the execution and delivery of the New Property
Confirmation in accordance with this section 4.4, this Agreement shall
be automatically deemed amended and supplemented to incorporate the
terms and provisions of such New Property Confirmation including any
provisions, (i) specifying whether the New Property is a New Bond
Property or a New Additional Property is a New Bond Property or a New
Additional Property, (ii) specifying the amendment and restatement of
any of the Exhibits to this Agreement and (iii) modifying the Allocable
Facility Amount of all or any of the Properties.
SECTION 4.5 CERTAIN PERMITTED TRANSFERS OF PROPERTIES.
(a) CONDITIONS TO PERMITTED TRANSFERS. At the request of
Owner, Xxxxxx Xxx shall, from time to time, consent to Owner's sale and
transfer of a Bond Property subject to Xxxxxx Mae credit enhancement (a
"PROPOSED TRANSFER") to an independent third-party purchaser if Xxxxxx
Xxx determines that each of the following conditions have been satisfied
in full:
(i) no Event of Default or Potential Event of Default shall have
occurred and be continuing either immediately before or immediately
after giving effect to the Proposed Transfer;
(ii) at the time of such Proposed Transfer, Xxxxxx Mae continues to
provide credit enhancement with respect to new bond transactions similar
to the Related Bonds, pursuant to guaranteed mortgage pass-through
certificates similar to the Related Xxxxxx Xxx Pass-Through Certificate
and the provision of such credit enhancement continues to be permitted
under the Xxxxxx Mae Charter Act;
(iii) Owner shall either redeem or otherwise remove Bonds from the
Xxxxxx Xxx Credit Facility and/or post cash collateral in a manner
acceptable to Xxxxxx Mae, in either case in an amount equal to the
Required Facility Reduction with respect to the Bond Property that is
proposed to be transferred; the following shall be credited toward such
Required Facility Reduction: (1) the amount of the Related Bonds
outstanding immediately prior to the Proposed Transfer, PLUS (2) the
amount of any other Bonds redeemed by Owner to obtain approval of the
Proposed Transfer, PLUS (3) the amount of any Facility Reduction Cash
Collateral posted by Owner to obtain approval for the Proposed Transfer;
(iv) the proposed transferee shall be a Single-Purpose entity,
shall not be an Affiliate of Owner, General Partner or any Guarantor and
meets the eligibility, credit, management and otherwise satisfies the
then applicable underwriting standards
60
customarily applied by Xxxxxx Xxx for approval of new borrowers (the
"PROPOSED TRANSFEREE");
(v) Owner causes to be submitted to Xxxxxx Mae all information
required by Xxxxxx Xxx to evaluate the Proposed Transferee and the Bond
Property proposed to be transferred as if a new loan were being made to
the Proposed Transferee and secured by the Bond Property proposed to be
transferred;
(vi) at the time of such Proposed Transfer, the Bond Property
proposed to be transferred shall be subject to re-underwriting in
accordance with Xxxxxx Mae's then applicable standards (including
satisfaction of loan to value ratio requirements, debt service coverage
ratio requirements, physical maintenance requirements, replacement
reserve requirements and all other applicable conditions, requirements
and limitations) customarily applied by Xxxxxx Xxx for approval of new
loans secured by liens on new Multifamily Residential Properties and
such re-underwriting shall be conducted by or on behalf of Servicer and
Xxxxxx Mae taking into account all facts and circumstances deemed
relevant by Servicer and Xxxxxx Xxx;
(vii) the Proposed Transferee shall: (1) assume all of the
obligations of Owner under and with respect to the Related Bonds, the
other Related Bond Documents, the Bond Property Loan Documents with
respect to such Bond Property and the related Xxxxxx Mae credit
enhancement pursuant to documentation in form and substance acceptable
to Xxxxxx Xxx; (2) enter into a reimbursement agreement and such other
documentation deemed necessary by Xxxxxx Mae to evidence and secure its
reimbursement and other obligations to Xxxxxx Xxx; (3) agree to credit
enhancement pricing that shall be determined by Xxxxxx Mae; and (4)
amend, modify, supplement or amend and restate the Related Bond
Documents and the Bond Property Loan Documents with respect to such Bond
Property, all as deemed necessary by Xxxxxx Xxx;
(viii) Owner shall have obtained the consent of the Issuer with
respect to the Related Bonds, the Related Trustee and each other party
to the Related Bond Documents and the Bond Property Loan Documents that
is required under the terms of such documents to consent to a transfer
of the Bond Property;
(ix) all documentation relating to the foregoing shall be
acceptable to Xxxxxx Mae in all respects, including legal opinions,
release documentation and any amendments to this Agreement or the other
Transaction Documents;
(x) Owner or the Permitted Transferee shall have paid to Xxxxxx Xxx
it customary transfer and assumption fees consisting of a $3000
non-refundable application fee and, upon completion of the Proposed
Transfer transaction, a transfer fee equal to one percent (1%) of the
Allocable Facility Amount of the Bond Property that is proposed to be
transferred. In addition, Owner shall have paid to Xxxxxx Mae and
Servicer, customary due diligence fees plus all out-of-pocket costs and
expenses (including
61
reasonable legal fees and expenses) incurred by Xxxxxx Xxx or Servicer
in connection with the foregoing, to the extent such expenses exceed
$3000. Such additional amounts shall be paid by Owner on or prior to the
closing date of the Proposed Transfer, or if such Proposed Transfer
fails to close, within thirty (30) days of Owner's receipt of invoices
therefor, and shall be payable regardless. of whether the Bond Property
is or is not (for any reason) ultimately transferred; and
(xi) Owner or the Permitted Transferee shall have paid to the
appropriate parties all other fees, costs and expenses (including legal
fees and expenses) payable by Owner to each of the related Issuer, the
Related Trustee, the related Remarketing Agent, Xxxxxx Mae and Servicer
under the terms of the Bond Property Loan Documents and the Bond
Documents with respect to such Bond Property in connection with the
Proposed Transfer.
(b) PERMITTED TRANSFERS. Xxxxxx Mae's consent to a Proposed
Transfer shall become effective upon (i) Xxxxxx Mae's determination,
that each of the conditions set forth above have been satisfied in full,
and (ii) Xxxxxx Mae's execution and delivery to Owner of a written
instrument releasing (in whole or in part as applicable) Owner from its
obligations under and with respect to the Related Bonds, the other
Related Bond Documents, the Bond Property Loan Documents with respect to
such Bond Property, and the related Facility. Any transfer of a Bond
Property consented to by Xxxxxx Mae in accordance with the provisions
set forth above (a "PERMITTED TRANSFER") shall be made together with and
subject to (1) the Related Bonds, (2) the other Related Bond Documents
(subject to any amendments and modifications required by Xxxxxx Xxx in
accordance with subsection (a) above), (3) the Bond Property Loan
Documents with respect to such Bond Property (subject to any amendments
and modifications required by Xxxxxx Mae in accordance with subsection
(a) above), and (4) Xxxxxx Mae's credit enhancement with respect to such
Bond Property. Notwithstanding anything herein or in the Bond Property
Loan Documents with respect to such Bond Property to the contrary, Owner
shall not be required to pay the Prepayment Premium otherwise required
under any the Related Mortgage Note in connection with a Permitted
Transfer.
SECTION 4.6 CREDIT ENHANCEMENT OF OLYMPIAD PROJECT.
(a) CREDIT ENHANCEMENT OF THE OLYMPIAD PROJECT. On or before
August 1, 1997, Owner and Servicer may request that a new tax-exempt
housing bond transaction (the "OLYMPIAD BOND TRANSACTION") with respect
to that certain Multifamily Residential Property located in Montgomery,
Alabama and commonly known as Olympiad Apartments (the "OLYMPIAD
PROJECT") be added to the Xxxxxx Mae Credit Facility as a New Bond
Property. Subject to satisfaction in full of the conditions and
limitations set forth in this section 4.6, Xxxxxx Xxx shall xxxxx its
approval to the addition of the Olympiad Bond Transaction and Xxxxxx
Mae's credit enhancement with respect thereto (the "OLYMPIAD CREDIT
ENHANCEMENT") by issuing a Guaranteed Mortgage Pass-Through Certificate
substantially in the form of the Related Xxxxxx Xxx Pass-Through
Certificates for the benefit of the trustee with respect to the Olympiad
Bond Transaction. Xxxxxx Mae's agreement to provide the Olympiad
62
Credit Enhancement is subject to Xxxxxx Mae's determination in Xxxxxx Mae's
discretion that each of the following conditions have been satisfied in full:
(i) the Olympiad Bond Transaction shall close on or before December
1, 1997 (the "OLYMPIAD COMMITMENT TERMINATION DATE");
(ii) No Event of Default or Potential Event of Default shall have
occurred;
(iii) The mortgage loan with respect to the Olympiad Bond
Transaction (the "OLYMPIAD MORTGAGE LOAN") shall be originated by either
(A) Servicer and assigned to Xxxxxx Xxx or (B) an independent
third-party issuer and then assigned in succession to Servicer and then
to Xxxxxx Mae, and such mortgage loan shall otherwise comply with all
other Xxxxxx Xxx Charter Act requirements for multifamily loans;
(iv) The following underwriting tests shall be satisfied:
(A) the actual fixed interest rate (including the base interest
rate payable on the Olympiad Refunding Bonds plus all
issuer's fees, trustee's fees, credit enhancement fees
and other fees payable under the mortgage note) with
respect the Olympiad Mortgage Loan shall not exceed 8%;
(B) the ratio (expressed as a percentage) of the Facility Amount
of Olympiad Bond Transaction to the Value of the Olympiad
Project, will be equal to or less than ninety-three
percent (93%); and
(C) the ratio of (1) the Net Operating Income of the Olympiad
Project for the twelve (12) month period ending within
sixty (60) days of the proposed date for the addition of
the Olympiad Project, to (2) the anticipated scheduled
debt service due with respect to the Olympiad Project for
the twelve (12) months immediately following the Olympiad
Refunding Closing Date, each as determined by Xxxxxx Mae
in its discretion, will be equal to or exceed 103:1;
In addition, if the actual fixed interest rate (including the base
interest rate payable on the Olympiad Refunding Bonds plus all
issuer's fees, trustee's fees, credit enhancement fees and other
fees payable under the mortgage note) with respect the Olympiad
Mortgage Loan shall (I) be less than or equal to 7%, then Xxxxxx
Mae's credit enhancement fee with respect to such Olympiad Mortgage
Loan shall be .65% or 00 "xxxxx xxxxxx", or (II) exceed 7% but be
less than or equal to 8%, then Xxxxxx Mae's credit enhancement fee
with respect to such Olympiad Mortgage Loan shall be determined by
Xxxxxx Xxx in its discretion;
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(v) All documentation (including any amendments to this Agreement
and the other Transaction Documents) relating to the Olympiad Bond
Transaction shall be the same in all material respects as the
documentation relating to the existing Bonds, subject to such
modifications as may be necessary and which, in any event, are agreed to
by Owner and approved by Xxxxxx Mae in its discretion and the terms and
conditions of the Olympiad Refunding Bonds, the related bond documents,
mortgage loan documents and other documents delivered in connection with
the Olympiad Bond Transaction (the "OLYMPIAD REFUNDING DOCUMENTS"),
shall be satisfactory to Xxxxxx Xxx, including the following:
(A) such Olympiad Bond Transaction shall be incorporated into and be
governed by the terms of this Agreement;
(B) the principal amount of the Olympiad Mortgage Loan shall be
equal to or less than $5,350,000.00;
(C) the principal amortization schedule of the Olympiad Mortgage
Loan shall be sufficient to cause such Olympiad Mortgage Loan
to fully amortize by July 1, 2016;
(D) the Olympiad Refunding Bonds shall mature on August 1, 2016;
(E) the Olympiad Refunding Documents shall contain cross-default
and cross-collateralization provisions that conform to the
existing Transaction Documents;
Notwithstanding the foregoing, the Prepayment Premium with respect to
the Olympiad Refunding Transaction shall continue for not less than ten
(10) years from the closing date of the Olympiad Bond Transaction (the
"OLYMPIAD REFUNDING CLOSING DATE");
(vi) Owner shall execute and deliver to Xxxxxx Mae a certificate
(an "OWNER'S DATE-DOWN CERTIFICATE") confirming that all of the
representations and warranties set forth in this Agreement (including
those with respect to the Aggregate Debt Service Coverage Ratio and the
Aggregate Loan to Value Ratio as set forth in section 2.1(h)) are true,
correct and complete after giving effect to the Olympiad Bond
Transaction;
(vii) Each of Owner and each Guarantor, to the extent applicable,
shall have delivered to Xxxxxx Xxx appropriate evidence satisfactory to
Xxxxxx Mae of its authority to execute and deliver the Olympiad
Refunding Documents to which it is a party;
(viii) Xxxxxx Xxx shall have received from Servicer such
representations, warranties, undertakings and such other certificates as
Xxxxxx Mae shall customarily require relating to the Olympiad Bond
Transaction;
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(ix) Xxxxxx Xxx shall have received such opinions of bond counsel,
trustee's counsel and issuer's counsel, and such other opinions and
certificates as Xxxxxx Mae shall reasonably require relating to the Olympiad
Bond Transaction;
(x) Xxxxxx Xxx shall have received an opinion of counsel to Owner
concerning such matters as Xxxxxx Mae may reasonably require relating to the
Olympiad Bond Transaction and Xxxxxx Xxx shall otherwise have received
satisfactory evidence that all conditions to the effectiveness and
enforceability of the Olympiad Refunding Documents have been fully satisfied;
(xi) All legal opinions relating to the Olympiad Bond Transaction shall
be the same in all material respects as the opinions relating to the existing
Transaction Documents and otherwise in form and substance satisfactory to
Xxxxxx Mae;
(xii) Xxxxxx Xxx shall have received certified copies of all consents
and authorizations (including Governmental Approvals, if any), necessary for
the applicable issuer or Owner to execute, deliver and perform their
respective obligations under the Olympiad Refunding Documents;
(xiii) Xxxxxx Mae shall xxxx received certified copies of (A) such
issuer's charter or certificate of incorporation and by-laws, if any, (B) the
resolution or resolutions of such issuer authorizing the execution, delivery
and performance of its obligations under the Olympiad Refunding Documents to
which it is a party and (C) certified copies of all other documents
evidencing any other official action of such issuer taken with respect to the
Olympiad Bond Transaction, as each such item is then in full force and
effect;
(xiv) Xxxxxx Mae shall have received copies of all documents relating to
the closing of such Olympiad Bond Transaction, authenticated to Xxxxxx Mae's
reasonable satisfaction;
(xv) Xxxxxx Mae shall have received true and correct copies of rating
letters from the Rating Agency rating the Olympiad Refunding Bonds confirming
that such bonds have received the same rating afforded other debt instruments
of the character of the Olympiad Refunding Bonds and which are credit
enhanced by Xxxxxx Xxx;
(xvi) Owner shall have executed and delivered to Xxxxxx Mae such
amendments and modifications to this Agreement or the other Transaction
Documents and Xxxxxx Xxx shall have received such other documents,
certificates, filings, legal opinions, approvals or instruments, as Xxxxxx
Mae shall deem necessary in order to effectuate the Olympiad Bond Transaction;
(xvii) Xxxxxx Xxx shall have received payment in full of all fees and
expenses (including fees and disbursements of Xxxxxx Mae's and the Servicer's
counsel and accountants), incurred in connection with or related to the
Olympiad Bond Transaction
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and the preparation, review, execution and delivery of the Olympiad
Refunding Documents; and
(xviii) Subject to the qualifications set forth above, all
documentation relating to the foregoing shall be acceptable to Xxxxxx
Xxx in its discretion in all respects, including all legal opinions,
title insurance policies and endorsements, Security Instruments,
Replacement Reserve Agreements, indentures, collateral agreements,
assignments and any amendments necessary to this Agreement or the other
Transaction Documents.
(b) ADDITION OF OLYMPIAD PROJECT. Upon satisfaction in full of the
conditions and limitations set forth in this section 4.6 with respect to
the Olympiad Bond Transaction, the Olympiad Project shall be deemed a
New Bond Property and shall be added to the Xxxxxx Mae Credit Facility.
The addition of the Olympiad Project to the Xxxxxx Xxx Credit Facility
shall become effective only upon Xxxxxx Mae's execution and delivery to
Owner of a New Property Confirmation. Upon the execution and delivery of
any such New Property Confirmation in accordance with this section 4.6,
this Agreement shall be automatically deemed amended and supplemented to
incorporate the terms and provisions of such New Property Confirmation.
SECTION 4.7 CERTAIN PERMITTED TRANSFERS OF OWNERSHIP INTERESTS.
Notwithstanding anything to the contrary set forth in this Agreement or
in the Mortgages, in connection with the Olympiad Bond Transaction
and/or the Eden Crossing Bond Transaction a "Transfer" (as defined in
Uniform Covenant 19 of the Mortgages) of not more than five percent (5%)
in the aggregate with respect to both such bond transactions, of the
direct beneficial ownership interests in Owner may occur, provided that,
such "Transfer" (a) is made to an Affiliate of Owner, (b) occurs in
consideration of such Affiliates conveyance of the Olympiad Project to
Owner and (c) consists solely of limited partnership interests in Owner.
SECTION 4.8 CREDIT ENHANCEMENT OF EDEN CROSSING PROJECT.
(a) CREDIT ENHANCEMENT OF THE EDEN CROSSING PROJECT. On or
before November 1, 1997, Owner and Servicer may request that Xxxxxx Xxx
provide credit enhancement (the "EDEN CROSSING BOND TRANSACTION") with
respect to a new tax-exempt housing bond transaction relating to that
certain Multifamily Residential Property located in Escambia County,
Florida and commonly known as Eden Crossing Apartments (the "EDEN
CROSSING PROJECT"), and in connection therewith, that the Eden Crossing
Project be added to the Xxxxxx Mae Credit Facility as a New Bond
Property. Subject to satisfaction in full of the conditions and
limitations set forth in this section 4.8, Xxxxxx Xxx shall xxxxx its
approval to the Eden Crossing Bond Transaction, the addition of the Eden
Crossing Project to the Xxxxxx Mae Credit Facility and Xxxxxx Mae's
credit enhancement with respect thereto (the "EDEN CROSSING CREDIT
ENHANCEMENT") by issuing a Guaranteed Mortgage Pass-Through Certificate
substantially in the form of the Related Xxxxxx Mae Pass-Through
Certificates for the benefit of the trustee with respect to the Eden
Crossing Bond Transaction. Xxxxxx Mae's agreement to provide the
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Eden Crossing Credit Enhancement is subject to Xxxxxx Mae's
determination in Xxxxxx Mae's discretion that each of the following
conditions have been satisfied in full:
(i) the Eden Crossing Bond Transaction shall close on or before
December 1, 1997 (the "EDEN CROSSING COMMITMENT TERMINATION DATE");
(ii) No Event of Default or Potential Event of Default shall have
occurred;
(iii) The mortgage loan with respect to the Eden Crossing Bond
Transaction (the "EDEN CROSSING MORTGAGE LOAN") shall be originated by
either (A) Servicer and assigned to Xxxxxx Mae or (B) an independent
third-party issuer and then assigned in succession to Servicer and then
to Xxxxxx Xxx, and such mortgage loan shall otherwise comply with all
Xxxxxx Mae Charter Act requirements for multifamily loans;
(iv) The following underwriting tests shall be satisfied:
(A) the actual fixed interest rate (including the base
interest rate payable on the Eden Crossing Bonds plus all
issuer's fees, trustee's fees, credit enhancement fees
and other fees payable under the mortgage note) with
respect the Eden Crossing Mortgage Loan shall not exceed
8%;
(B) the ratio (expressed as a percentage) of the Facility Amount
of Eden Crossing Bond Transaction to the Value of the
Eden Crossing Project, will be equal to or less than
eighty-five and seventy-one hundredths percent (85.71%);
and
(C) the ratio of (1) the Net Operating Income of the Eden
Crossing Project for the twelve (12) month period ending
within sixty (60) days of the proposed date for the
addition of the Eden Crossing Project, to (2) the
anticipated scheduled debt service due with respect to
the Eden Crossing Project for the twelve (12) months
immediately following the closing date of the Eden
Crossing Bond Transaction (the "EDEN CROSSING CLOSING
DATE"), each as determined by Xxxxxx Xxx in its
discretion, will be equal to or exceed 1.10:1;
In addition, if the actual fixed interest rate (including
the base interest rate payable on the Eden Crossing Bonds
plus all issuer's fees, trustee's fees, credit
enhancement fees and other fees payable under the
mortgage note) with respect the Eden Crossing Mortgage
Loan shall (I) be less than or equal to 7%, then Xxxxxx
Mae's credit enhancement fee with respect to such Eden
Crossing Mortgage Loan shall be .65% or 00 "xxxxx
xxxxxx", or (II) exceed 7% but be less than or equal to
8%, then Xxxxxx Mae's
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credit enhancement fee with respect to such Eden Crossing Mortgage Loan
shall be determined by Xxxxxx Mae in its discretion;
(v) All documentation (including any amendments to this Agreement
and the other Transaction) relating to the Eden Crossing Bond
Transaction shall be the same in all material respects as the
documentation relating to the existing Bonds, subject to such
modifications as may be necessary and which, in any event, are agreed to
by Owner and approved by Xxxxxx Xxx in its discretion and the terms and
conditions of the Eden Crossing Bonds, the related bond documents,
mortgage loan documents and other documents delivered in connection with
the Eden Crossing Bond Transaction (the "EDEN CROSSING REFUNDING
DOCUMENTS"), shall be satisfactory to Xxxxxx Mae, and upon completion of
the Eden Crossing Bond Transaction include the following:
(A) such Eden Crossing Bond Transaction shall be incorporated
into and be governed by the terms of this Agreement;
(B) the principal amount of the Eden Crossing Mortgage Loan
shall be equal to or less than $6,000,000.00;
(C) the principal amortization schedule of the Eden Crossing
Mortgage Loan shall be sufficient to cause such Eden
Crossing Mortgage Loan to fully amortize by July 1, 2016;
(D) the Eden Crossing Bonds shall mature on August 1, 2016; and
(E) the Eden Crossing Refunding Documents shall contain
cross-default and cross-collateralization provisions that
conform to the existing Transaction Documents;
Notwithstanding the foregoing, the Prepayment Premium with respect to
the Eden Crossing Mortgage Loan shall continue for not less than ten
(10) years from the Eden Crossing Closing Date;
(vi) Owner shall execute and deliver to Xxxxxx Xxx an Owner's
Date-Down Certificate confirming that all of the representations and
warranties set forth in this Agreement (including those with respect to
the Aggregate Debt Service Coverage Ratio and the Aggregate Loan to
Value Ratio as set forth in section 2.1(h)) are true, correct and
complete after giving effect to the Eden Crossing Bond Transaction;
(vii) Each of Owner and each Guarantor, to the extent applicable,
shall have delivered to Xxxxxx Mae appropriate evidence satisfactory to
Xxxxxx Xxx of its authority to execute and deliver the Eden Crossing
Refunding Documents to which it is a party;
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(viii) Xxxxxx Mae shall have received from Servicer such
representations, warranties, undertakings and such other certificates as
Xxxxxx Xxx shall customarily require relating to the Eden Crossing Bond
Transaction;
(ix) Xxxxxx Mae shall have received such opinions of bond counsel,
trustee's counsel and issuer's counsel, and such other opinions and
certificates as Xxxxxx Xxx shall reasonably require relating to the Eden
Crossing Bond Transaction;
(x) Xxxxxx Mae shall have received an opinion of counsel to Owner
concerning such matters as Xxxxxx Xxx may reasonably require relating to
the Eden Crossing Bond Transaction and Xxxxxx Mae shall otherwise have
received satisfactory evidence that all conditions to the effectiveness
and enforceability of the Eden Crossing Remarketing Documents have been
fully satisfied;
(xi) All legal opinions relating to the Eden Crossing Bond
Transaction shall be the same in all material respects as the opinions
relating to the existing Transaction Documents and otherwise in form and
substance satisfactory to Xxxxxx Xxx;
(xii) Xxxxxx Mae shall have received certified copies of all
consents and authorizations (including Governmental Approvals, if any),
necessary for the applicable issuer or Owner to execute, deliver and
perform their respective obligations under the Eden Crossing Refunding
Documents;
(xiii) Xxxxxx Xxx shall have received certified copies of (A) such
issuer's charter or certificate of incorporation and by-laws, if any,
(B) the resolution or resolutions of such issuer authorizing the
execution, delivery and performance of its obligations under the Eden
Crossing Refunding Documents to which it is a party and (C) certified
copies of all other documents evidencing any other official action of
such issuer taken with respect to the Eden Crossing Bond Transaction, as
each such item is then in full force and effect;
(xiv) Xxxxxx Mae shall have received copies of all documents
relating to the closing of such Eden Crossing Bond Transaction,
authenticated to Xxxxxx Mae's reasonable satisfaction;
(xv) Xxxxxx Mae shall have received true and correct copies of
rating letters from the Rating Agency rating the Eden Crossing Bonds
confirming that such bonds have received the same rating afforded other
debt instruments of the character of the Eden Crossing Bonds and which
are credit enhanced by Xxxxxx Xxx;
(xvi) Owner shall have executed and delivered to Xxxxxx Mae such
amendments and modifications to this Agreement or the other Transaction
Documents and Xxxxxx Xxx shall have received such other documents,
certificates, filings, legal opinions, approvals
69
or instruments, as Xxxxxx Mae shall deem necessary in order to
effectuate the Eden Crossing Bond Transaction;
(xvii) Xxxxxx Xxx shall have received payment in full of all fees
and expenses (including fees and disbursements of Xxxxxx Mae's and the
Servicer's counsel and accountants), incurred in connection with or
related to the Eden Crossing Bond Transaction and the preparation,
review, execution and delivery of the Eden Crossing Refunding Documents;
and
(xviii) Subject to the qualifications set forth above, all
documentation relating to the foregoing shall be acceptable to Xxxxxx
Xxx in its discretion in all respects, including all legal opinions,
title insurance policies and endorsements, Security Instruments,
Replacement Reserve Agreements, indentures, collateral agreements,
assignments and any amendments necessary to this Agreement or the other
Transaction Documents.
(b) ADDITION OF EDEN CROSSING PROJECT. Upon satisfaction in
full of the conditions and limitations set forth in this section 4.8
with respect to the Eden Crossing Bond Transaction, the Eden Crossing
Project shall be deemed a New Bond Property and shall be added to the
Xxxxxx Mae Credit Facility. The addition of the Eden Crossing Project to
the Xxxxxx Xxx Credit Facility shall become effective only upon Xxxxxx
Mae's execution and delivery to Owner of a New Property Confirmation.
Upon the execution and delivery of any such New Property Confirmation in
accordance with this section 4.8, this Agreement shall be automatically
deemed amended and supplemented to incorporate the terms and provisions
of such New Property Confirmation.
(c) INTERIM SUBSTITUTION OF EDEN CROSSING PROJECT. If prior to
the completion of the Eden Crossing Bond Transaction, Xxxxxx Xxx in its
discretion agrees to provide substitute credit enhancement for the
existing bond financing with respect to the Eden Crossing Project (the
"EDEN CROSSING SUBSTITUTION TRANSACTION") then Xxxxxx Mae's agreement to
provide the Eden Crossing Credit Enhancement shall terminate and be of
no further force or effect.
ARTICLE V.
SERVICING; REPLACEMENT OF CREDIT ENHANCEMENT
SECTION 5.1 SERVICING.
Owner acknowledges that Xxxxxx Xxx has designated or may
designate an independent contractor to service the Mortgage Loans, the
Bond Property Loan Documents and the Reimbursement Loan Documents. Owner
agrees that to the extent that any provision in this Agreement or any
other Transaction Document requires, at stipulated dates or at the
request of Xxxxxx Mae, the delivery by Owner of certain notices,
documents, certificates, opinions, and
70
financial or other information to Xxxxxx Xxx or the Lender (as such term
is used and defined in the Mortgage Documents), all such items shall
instead be delivered to, or at the request of, Servicer, subject to the
provisions of this section. Owner acknowledges and agrees that Xxxxxx
Mae has delegated or may delegate certain functions to Servicer with
respect to the Transaction Documents, subject to and in accordance with
the Servicing Agreement. Owner further acknowledges and agrees that in
connection with any provision in this Agreement or in any other
Transaction Document requiring that any notices, documents or other
information shall be given to Servicer, or that Servicer shall have the
right to request any documents or other information from Owner, Xxxxxx
Xxx shall have the right to instruct Owner to instead (a) deliver such
items directly to Xxxxxx Mae or to such other Person as Xxxxxx Mae may,
from time to time, designate, and (b) act in accordance with the
instructions of Fannie Mae with respect to any such items or any other
rights Servicer may have under this Agreement or under any other
Transaction Document. In addition, Owner agrees that any right of Fannie
Mae to give or deliver to Owner any notice or other communications, or
to receive from Owner any document or other information, may be given,
delivered or received by Servicer, unless otherwise directed by Fannie
Mae. Owner shall act in accordance with any instructions received from
Fannie Mae pursuant to this section. Owner further acknowledges and
agrees that Fannie Mae reserves the unconditional right to replace
Servicer with or without cause, with a substitute Servicer chosen by
Fannie Mae in its discretion.
SECTION 5.2 REPLACEMENT OF FANNIE MAE CREDIT ENHANCEMENT.
Except as otherwise permitted upon a substitution or release
of a Property pursuant to section 4.2 or section 4.3, respectively,
Owner will not cause any Related Trustee to terminate any Related Fannie
Mae Pass-Through Certificate (except in connection with the repayment of
all of the outstanding Related Bonds) or replace any Related Fannie Mae
Pass-Through Certificate with alternate credit enhancement unless prior
to or simultaneously with the effectiveness of such termination or
replacement:
(a) the Related Fannie Mae Pass-Through Certificate is
replaced or terminated with respect to all of the outstanding Bonds;
(b) Owner shall have received a statement from Fannie Mae to
the effect that Owner has paid to Fannie Mae the amount of all
Reimbursable Advances and any other outstanding obligations of Owner to
Fannie Mae hereunder, whether or not such Reimbursable Advances or other
amounts are otherwise then due;
(c) Fannie Mae determines that no part of any payments made by
Owner prior to or concurrently with the credit enhancement termination
or replacement will likely result in an avoidance or any other recovery
or disgorgement pursuant to the Bankruptcy Code (including sections 544,
547, 549 or 550 thereof) or any other applicable bankruptcy or
insolvency law which would result in Fannie Mae having any liability
under any Related Fannie Mae Pass-Through Certificate, or Owner will
provide Cash Collateral or make other arrangements
71
acceptable to Fannie Mae in its discretion to ameliorate such risk of
avoidance, recovery or disgorgement; and
(d) Owner shall have paid the Prepayment Premium with respect to
the Mortgage Loans in accordance with the requirements of the Mortgage
Notes calculated based on the assumption that the Mortgage Loan is being
prepaid in full on the day immediately preceding the effective date of
the alternative credit enhancement.
ARTICLE VI.
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
Each of the following events shall constitute an "Event of
Default" under this Agreement, whatever the reason for such event and
whether it shall be voluntary or involuntary, or within or without the
control of Owner, or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority:
(a) the occurrence of a default under any Transaction Document
beyond any cure period set forth therein; or
(b) the failure by Owner to pay when due any amount payable by
Owner under any Related Mortgage Note, any Mortgage, this Agreement or
any other Transaction Document, including any fees, costs or expenses; or
(c) the failure by Owner to perform or observe any covenant
set forth in subsections 2.2(a), (b), (c), (g), (h), (j), (o) to (q)
inclusive, or (s) to (v) inclusive, in subsections 2.3 (a) to (e)
inclusive, or (g) to (j) inclusive or in section 2.5; or
(d) the failure by Owner to perform or observe any covenant
set forth in subsection 2.2(d) or (k) to (m) inclusive, or in section
2.3(l), within ten (10) days after receipt of notice from Servicer or
Fannie Mae; or
(e) the failure by Owner to perform or observe any covenant
set forth in subsections 2.2(i) or 2.3(k) hereunder, within twenty (20)
days after receipt of notice from Servicer or Fannie Mae; or
(f) any warranty, representation or other written statement
made by or on behalf of Owner contained in this Agreement, any other
Transaction Document or in any instrument furnished in compliance with
or in reference to any of the foregoing, is false or misleading in any
material respect on any date when made or deemed made; or
72
(g) any other Indebtedness in an aggregate amount in excess of
$75,000.00 of Owner or assumed by Owner (i) is not paid when due nor within
any applicable grace period in any agreement or instrument relating to such
Indebtedness or (ii) becomes due and payable before its normal maturity by
reason of a default or event of default, however described, or any other
event of default shall occur and continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such
Indebtedness; or
(h) (i) Owner, General Partner or any Guarantor shall (A) commence
a voluntary case under the Federal bankruptcy laws (as now or hereafter in
effect), (B) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, debt
adjustment, winding up or composition or adjustment of debts, (C) consent to
or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws,
(D) apply for or consent to, or fail to contest in a timely and appropriate
manner, the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of a substantial part of its
property, domestic or foreign, (E) admit in writing its inability to pay, or
generally not be paying, its debts as they become due, (F) make a general
assignment for the benefit of creditors, (G) assert that Owner, General
Partner or any Guarantor has no liability or obligations under this Agreement
or any other Transaction Document to which it is a party; or (H) take any
action for the purpose of effecting any of the foregoing; or (ii) a case or
other proceeding shall be commenced against Owner, General Partner or any
Guarantor in any court of competent jurisdiction seeking (A) relief under the
Federal bankruptcy laws (as now or hereafter in effect) or under any other
laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding upon or composition or adjustment of debts, or (B)
the appointment of a trustee, receiver, custodian, liquidator or the like of
Owner, General Partner or any Guarantor, or of all or a substantial part of
the property, domestic or foreign, of Owner, General Partner or any Guarantor
and any such case or proceeding shall continue undismissed or unstayed for a
period of 60 consecutive calendar days, or any order granting the relief
requested in any such case or proceeding against Owner, General Partner or
any Guarantor (including an order for relief under such Federal bankruptcy
laws) shall be entered; or
(i) if any provision of this Agreement or any other Transaction
Document or the lien and security interest purported to be created hereunder
or under any Transaction Document shall at any time for any reason cease to
be valid and binding in accordance with its terms on any Issuer or Owner, as
the case may be, or shall be declared to be null and void, or the validity or
enforceability hereof or thereof or the validity or priority of the lien and
security interest created hereunder or under any other Transaction Document
shall be contested by Owner seeking to establish the invalidity or
unenforceability hereof or thereof, or any Issuer or Owner, as the case may
be, shall deny that it has any further liability or obligation hereunder or
thereunder; or
(j) if a "Transfer" (as defined in any Related Mortgage) shall
occur in violation of Uniform Covenant 19 (as modified by the applicable
Special Rider to Multifamily Instrument) of any Related Mortgage or if any
Property or any part thereof is otherwise
73
conveyed, assigned, mortgaged, pledged, leased or encumbered in any way
other than as permitted under this Agreement or any Related Mortgage
without the prior written consent of Fannie Mae; or
(k) the execution by Owner of a chattel mortgage or other security
agreement on any materials, fixtures or articles used in the construction or
operation of the improvements located on any Property or on articles of
personal property located therein, or (y) if any such materials, fixtures or
articles are purchased pursuant to any conditional sales contract or other
security agreement or otherwise so that the ownership thereof will not vest
unconditionally in Owner free from encumbrances, or (z) if Owner does not
furnish to Fannie Mae upon request the contracts, bills of sale, statements,
receipted vouchers and agreements, or any of them, under which Owner claims
title to such materials, fixtures, or articles; or
(l) failure, upon request, to furnish to Fannie Mae the results of
official searches made by any Governmental Authority, or failure by Owner to
comply with any requirement of any Governmental Authority within 30 days
after written notice of such requirement shall have been given to Owner by
such Governmental Authority; provided that, if action is commenced and
diligently pursued by Owner within such 30 days, then Owner shall have an
additional 30 days to comply with such requirement; or
(m) a dissolution or liquidation for any reason (whether voluntary
or involuntary) of Owner or its Subsidiaries; or
(n) if General Partner shall fail to qualify as a "Qualified REIT
Subsidiary" or if AIMCO REIT shall fail to qualify as a real estate
investment trust under Subchapter M of the Code; or
(o) any judgment against Owner, any attachment or other levy
against any portion of Owner's assets with respect to a claim in an amount in
excess of $50,000.00 individually and/or $175,000.00 in the aggregate remains
unpaid, unstayed on appeal undischarged, unbonded, not fully insured or
undismissed for a period of sixty (60) days; or
(p) the failure by Owner to maintain insurance with respect to each
Property in accordance with the terms of the Related Mortgage with respect to
each such Property; or
(q) the failure by Owner to perform or observe the covenants with
respect to Hazardous Materials or Hazardous Materials Laws set forth in any
Mortgages or in any other Transaction Document including, the covenants set
forth in Paragraph D of the Rider to Multifamily Instrument constituting a
part of each Mortgage; or
(r) the failure by Owner to cause the Gross Cash Flow with respect
to any Property to be deposited into the applicable Property Account in
accordance with the requirements of the Cash Management Agreement; or
74
(s) the failure by Owner to perform or observe any term, covenant,
condition or agreement hereunder, other than as set forth in subsections (a)
through (r) above, or in any other Transaction Document, within thirty (30)
days after receipt of notice from Servicer or Fannie Mae identifying such
failure; PROVIDED, HOWEVER, that if in Fannie Mae's judgment, (i) the cure of
such failure requires a period in excess of thirty (30) days, (ii) such
failure will not result in a Material Adverse Effect, and (iii) corrective
action is instituted by Owner within such period and pursued diligently and
in good faith, then such failure shall not constitute an Event of Default
unless such failure is not cured by Owner within sixty (60) days after
receipt of notice from Servicer or Fannie Mae identifying such failure; or
(t) the failure by Owner to cause an amended certificate of
limited partnership to confirming the substitution of General Partner as
Owner's sole general partner to be duly filed with the Florida Secretary
of State on or before July 19, 1996, and to provide Fannie Mae with a
certified copy of such filing on or before July 31, 1996; or
(u) (a) Owner, General Partner, any Guarantor or any Issuer
shall have asserted that it has no liability or obligations under this
Agreement or under any Transaction Document to which it is a party or
that the liens and the security interests purported to be created by the
Mortgage Loan Documents shall not be a valid and perfected first
priority security interest subject to no Liens except Permitted Liens;
or (b) any Governmental Authority having jurisdiction over the Owner,
General Partner, any Guarantor or any Issuer shall find or rule that any
material provision of this Agreement or any Transaction Document to
which it is a party is not valid and binding on such person or that the
lien and the security interest purported to be created by any Mortgage
Loan Document shall not be a valid and perfected first priority security
interest subject to no Liens except Permitted Liens.
SECTION 6.2 REMEDIES.
Upon the occurrence of an Event of Default, Fannie Mae may in
its discretion, but shall not be obligated to, exercise any or all of
the following remedies:
(a) declare all amounts payable by Owner under this Agreement
or the other Transaction Documents to be forthwith due and payable, and
the same shall thereupon become due and payable without demand,
presentment, protest or notice of any kind, all of which are hereby
expressly waived; or
(b) exercise all or any of its rights and remedies as it may
otherwise have under Applicable Law and under this Agreement or the
other Transaction Documents or otherwise by such suits, actions, or
special proceedings in equity or at law, or by proceedings in the office
of any board or officer having jurisdiction, either for specific
performance of any covenant or agreement contained in this Agreement or
any other Transaction Document, or in aid or execution of any power
therein granted or for the enforcement of any proper legal or equitable
remedy; or
75
(c) demand and Owner shall provide cash collateral or Government
Obligations in the full amount of the outstanding obligations under all
of the Bonds whether or not due and payable; or
(d) apply all or any portion of the Collateral to any Obligations
or other obligation of Owner under this Agreement or any other
Transaction Document, in such amounts, at such times and in such order
as determined by Fannie Mae in its discretion. Owner acknowledges that
this may include, among other things, applying funds or directing
Servicer to apply funds on deposit in any Property Account or the
Central Account to prepay the applicable Related Bonds or to prepay any
other Related Bonds or reimbursement or other payment obligations under
this Agreement or any other Transaction Document. Such funds may be
applied to prepay or reduce amounts outstanding under one or more issues
of Related Bonds regardless of whether such amounts are then due and
owing; or
(e) deliver to the Related Trustees written notice that an Event of
Default has occurred under this Agreement and directing the Related
Trustees to take such action pursuant to the Transaction Documents as
Fannie Mae may determine, including a request that the Related Trustees
declare the principal of all or a portion of the Related Bonds then
outstanding and the interest accrued thereon to be immediately due and
payable in accordance with the terms and conditions of the Related
Indentures.
No failure or delay on the part of Fannie Mae to exercise any right
or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right or remedy hereunder preclude any
further exercise thereof or the exercise of any further right or remedy
hereunder or under any other Transaction Document. The remedies herein
provided are cumulative and not exclusive of any remedies provided by
law or under any Transaction Document. No exercise by Fannie Mae of any
remedy under any Transaction Document shall operate as a limitation on
any rights or remedies of Fannie Mae under this Agreement.
In order to entitle Fannie Mae to exercise any remedy reserved to
Fannie Mae in this Article, it shall not be necessary to give any
notice, other than such notice as may be required under the applicable
provisions of any of the Transaction Documents. The rights and remedies
of Fannie Mae specified in this Agreement are for the sole and exclusive
benefit, use and protection of Fannie Mae, and Fannie Mae is entitled,
but shall have no duty or obligation to Owner, any Issuer, any Related
Trustee, any Bondholder with respect to any of the Bonds, or otherwise,
(a) to exercise or to refrain from exercising any right or remedy
reserved to Fannie Mae hereunder, or (b) to cause any Related Trustee or
any other party to exercise or to refrain from exercising any right or
remedy available to it under any of the Transaction Documents.
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ARTICLE VII.
MISCELLANEOUS
SECTION 7.1 WAIVERS, AMENDMENTS.
This Agreement may be amended only by a written instrument
duly executed by each of the parties hereto. Owner may take any action
herein prohibited or omit to perform any act herein required to be
performed or omit to perform any act herein required to be performed by
it, only if Owner shall first obtain the written consent of Fannie Mae
thereto. No course of dealing between Owner and Fannie Mae, nor any
delay in exercising any rights hereunder, shall operate as a waiver of
any rights of Fannie Mae hereunder. Unless otherwise specified in such
waiver or consent, a waiver or consent given hereunder shall be
effective only in the specific instance and for the specific purpose for
which given.
SECTION 7.2 SURVIVAL OF REPRESENTATION AND WARRANTIES.
All statements contained in any Transaction Document or in any
certificate, financial statement or other instrument delivered by or on
behalf of Owner pursuant to or in connection with this Agreement
(including any such statement made in or in connection with any
amendment hereto or thereto) shall constitute representations and
warranties made under this Agreement. All representations and warranties
made under this Agreement (a) shall be made and shall be true at and as
of the date of this Agreement, the Fannie Mae Facility Closing Date and
(b) shall survive the execution and delivery of this Agreement,
regardless of any investigation made by Fannie Mae or on its behalf.
SECTION 7.3 NOTICES.
All notices, directions, certificates or other communications
hereunder shall be given by certified or registered mail, return receipt
requested, OR by overnight courier addressed to the appropriate notice
address set forth below. Any of the parties hereto may, by a notice to
the other party specifically captioned "Notice of Change of Address
pursuant to section 7.3 of the Master Reimbursement Agreement",
designate any further or different address to which subsequent notices,
certificates or other communications shall be sent without any
requirement of execution of any amendment to this Agreement. Any such
notice, certificate or communication shall be deemed to have been given
as of the date of actual delivery or the date of failure to deliver by
reason of refusal to accept delivery or changed address of which no
notice was given pursuant to this section 7.3. Unless otherwise directed
by Fannie Mae pursuant to section 7.19, all notices pursuant to this
Agreement shall also be given to Servicer in accordance with this
section 7.3. The notice addresses are as follows:
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(a) if to Owner:
OTC Apartments Limited Partnership
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222-4348
Attention: Vice Chairman
(b) if to Fannie Mae:
if by mail or overnight courier:
Fannie Mae
3900 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Attention: Senior Vice President -Multifamily Activities
if by messenger:
Fannie Mae
3939 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Attention: Senior Vice President -Multifamily Activities
in each case, with copies to:
Fannie Mae
Southwest Regional Office
Two Galleria Tower
13455 Noel Road, Suite 600
Dallas, Texas
Attention: Regional Vice President - Multifamily Activities
and to:
Fannie Mae
3900 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Attention: Multifamily Mortgage Operations - Manager
Multifamily Deliveries
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(c) if to Servicer:
GMAC Commercial Mortgage Corporation
650 Drescher Road
Horsham, Pennsylvania 19044-8015
Attention: Barry Moore
SECTION 7.4 PAYMENT PROCEDURE.
Owner agrees that, unless otherwise directed pursuant to
section 5.1, all amounts due to Fannie Mae under Article III of this
Agreement shall be paid to Servicer for remittance to Fannie Mae
pursuant to the Servicing Agreement. All payments to be made to
Servicer, for the account of Fannie Mae, pursuant to this Agreement
shall be paid in immediately available funds to Servicer in accordance
with the Related Mortgage Note or in accordance with instructions given
to Owner by Servicer. Except as otherwise provided above in this section
7.4, all payments to be made to Fannie Mae pursuant to this Agreement
shall be made before 2:00 p.m., Washington, D.C. time, on the date when
due, in lawful currency of the United States of America and in
immediately available funds by wire transfer to an account designated in
writing by Fannie Mae unless Owner is otherwise instructed in writing by
Fannie Mae.
SECTION 7.5 CONTINUING OBLIGATION.
This Agreement is a continuing obligation of Owner and shall,
until the later of the Termination Date under the last remaining Related
Fannie Mae Pass-Through Certificate or the date upon which all amounts
due and owing to Fannie Mae hereunder shall have been paid in full, (a)
be binding upon Owner and its successors and assigns and (b) inure to
the benefit of and be enforceable by Fannie Mae and its successors,
transferees and assigns; PROVIDED, that Owner may not assign all or any
part of this Agreement without the prior written consent of Fannie Mae.
SECTION 7.6 SATISFACTION REQUIREMENT.
If any agreement, certificate or other writing, or any action
taken or to be taken, is by the terms of this Agreement required to be
satisfactory to, or subject to the satisfaction of, Fannie Mae, then,
unless otherwise expressly specified herein, the determination of such
satisfaction shall be made by Fannie Mae in its sole and exclusive
judgment.
SECTION 7.7 CONSENT OF FANNIE MAE.
If any provision of this Agreement provides for the approval,
consent, election, determination, exercise of discretion, choice,
designation, judgment or waiver of or by Fannie Mae and if a basis for
Fannie Mae granting such approval, consent, determination, election,
exercise of discretion, choice, designation, judgment or waiver is not
otherwise stated (i.e., that such approval, consent, election,
determination, exercise of discretion, choice, designation,
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judgment or waiver will be "reasonable"), then in each case such
approval, consent, determination, election, exercise of discretion,
choice, designation, judgment or waiver will be given by Fannie Mae in
its sole and absolute discretion.
SECTION 7.8 GOVERNING LAW.
This Agreement shall be construed and enforced in accordance
with, and the rights and remedies of the parties hereto shall be
governed by, the laws of Florida without regard to conflicts of law,
principles, except to the extent that Federal laws may prevail;
provided, however, that matters respecting the creation, perfection,
priority and foreclosure of the Lien on each Property granted pursuant
to or in connection with the Transaction Documents shall be governed by,
and construed and enforced in accordance with, the internal law of the
state or commonwealth in which such Property is situated without giving
effect to the conflicts of law principles of such state or commonwealth.
SECTION 7.9 JURISDICTION CONSENT TO SERVICE.
(a) Owner hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any court
in the state of Florida or Federal court of the United States of America
sitting in the state of Florida, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, the Bond Documents, the Mortgage Documents and every other
Transaction Document, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may
be heard and determined in such Florida court or, to the extent
permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this
Agreement shall effect any right that Fannie Mae may otherwise have to
bring any action or proceeding relating to this Agreement, the Bond
Documents, the Mortgage Documents or the other Transaction Documents
against Owner or its properties in the courts of any jurisdiction.
(b) Owner hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection
which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement, the
Bond Documents, the Mortgage Documents or the other Transaction
Documents in any Federal court or any court in the State of Florida.
Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in section 7.3.
Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
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SECTION 7.10 WAIVERS OF JURY TRIAL.
OWNER AND FANNIE MAE HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT, ANY BOND DOCUMENT, ANY MORTGAGE DOCUMENT OR ANY OTHER
TRANSACTION DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 7.11 COUNTERPARTS.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument, and it
shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart.
SECTION 7.12 SEVERABILITY.
Any provision of this Agreement that is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality
of such provision in any other jurisdiction and the remaining portion of
such provision and all other remaining provisions will be construed to
render them enforceable to the fullest extent. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 7.13 BUSINESS DAYS.
If any payment under this Agreement shall be specified to be
made upon a day which is not a Business Day, it shall be made on the
next succeeding day which is a Business Day and such extension of time
shall in any case be included in computing interest, if any, in
connection with such payment.
SECTION 7.14 ENTIRE AGREEMENT.
This Agreement and the other Transaction Documents constitute
the entire contract between the parties relative to the subject matter
hereof. Any previous agreement among the parties with respect to the
subject matter hereof is superseded by this Agreement and the other
Transaction Documents. Nothing in this Agreement or the other
Transaction Documents, expressed or implied, is intended to confer upon
any party other than the respective parties hereto and thereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement or the other Transaction Documents; PROVIDED, HOWEVER, that as
to Persons other than Fannie Mae and Owner that are parties to any of
the Transaction Documents, such Persons
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shall not have any rights, remedies, obligations or liabilities under
this Agreement or any of the Transaction Documents except under such
Transaction Documents as to which such Persons are direct parties.
SECTION 7.15 HEADINGS.
Section, subsection and paragraph headings in this Agreement
are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purposes.
SECTION 7.16 FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS.
To the extent permitted by law, the parties to this Agreement
agree that they will, from time to time, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such
supplements to this Agreement and such further instruments as Fannie Mae
may request and as may be reasonably required in the opinion of Fannie
Mae or its counsel to effectuate the intention of or facilitate the
performance of this Agreement or any other Transaction Document.
SECTION 7.17 ASSIGNMENT: TRANSFERS: THIRD-PARTY RIGHTS.
Owner shall not assign this Agreement, or delegate any of the
Obligations hereunder, without the prior written consent of Fannie Mae.
This Agreement may not be transferred in any respect without the prior
written consent of Fannie Mae. Nothing in this Agreement shall confer
any right upon any holder of any Bond or any other Person other than the
parties hereto and their successors and permitted assigns; PROVIDED,
HOWEVER, that notwithstanding anything to the contrary herein, Servicer
shall be a third party beneficiary with respect to Owner's covenants and
obligations under section 3.4.
SECTION 7.18 WAIVER OF CLAIMS.
IN ORDER TO INDUCE FANNIE MAE TO EXECUTE AND DELIVER THE
AGREEMENTS, OWNER HEREBY REPRESENTS AND WARRANTS THAT IT HAS NO CLAIMS,
SET-OFFS OR DEFENSES AS OF THE FANNIE MAE FACILITY CLOSING DATE IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR IN
CONNECTION WITH ANY OF THE OTHER TRANSACTION DOCUMENTS. TO THE EXTENT
ANY SUCH CLAIMS, SET-OFFS OR DEFENSES MAY EXIST, WHETHER KNOWN OR
UNKNOWN, THEY ARE EACH HEREBY WAIVED AND RELINQUISHED IN THEIR ENTIRETY.
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SECTION 7.19 DISCLAIMER; ACKNOWLEDGEMENTS.
Approval by Fannie Mae of Owner, the Mortgage Loans, the Bonds
or otherwise shall not constitute a warranty or representation by Fannie
Mae as to any matter. Nothing set forth in this Agreement, in any of the
Transaction Documents or in the subsequent conduct of the parties shall
be deemed to constitute Fannie Mae as the partner or joint venturer of
any person for any purpose whatsoever.
SECTION 7.20 CONFLICTS BETWEEN AGREEMENTS.
Any terms and conditions contained in this Agreement that may
also be contained in any of the Related Mortgage Notes, any of the
Related Mortgages, any of the Reimbursement Loan Documents or any other
Transaction Document to which Owner and Fannie Mae are parties, shall
not, to the extent reasonably practicable, be construed to be in
conflict with each other but rather shall be construed as duplicative,
confirming, additional, or cumulative provisions. To the extent that any
ultimate conflict is determined to exist between the terms and
conditions of this Agreement and those set forth in any of the Related
Mortgage Notes, any of the Related Mortgages, any of the Reimbursement
Loan Documents or any of the other Transaction Document to which Owner
and Fannie Mae are parties, the terms and conditions of this Agreement
shall control.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective duly authorized
officers or representatives as of the date hereof.
OTC APARTMENTS LIMITED
PARTNERSHIP, a Florida limited partnership
By: AIMCO/OTC QRS, INC., a Delaware
corporation, its general partner
By: /s/ Harry Alcock
----------------------------
Name: Harry Alcock
Title: Vice President
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
By: /s/ Thomas W. White
-----------------------
Name: Thomas W. White
Title: Senior Vice President
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