MASTER CREDIT FACILITY AGREEMENT
by and among
APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
AIMCO PROPERTIES, L.P.,
AIMCO/BLUFFS, L.L.C., AIMCO CHESAPEAKE, L.P., AIMCO ELM CREEK, L.P., AIMCO
LAKEHAVEN, L.P. and AIMCO LOS ARBOLES, L.P.,
collectively, as AIMCO Parties,
and
WASHINGTON MORTGAGE FINANCIAL GROUP, LTD.,
as Lender
Dated as of
February 4, 1998
2
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II THE CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . 34
2.01. The Credit Facility . . . . . . . . . . . . . . . . . . . . . . . 34
2.01(a) Establishment of the Credit Facility. . . . . . . . . . 34
2.01(b) Establishment of the Base Facility. . . . . . . . . . . 34
2.01(c) Establishment of Revolving Facility . . . . . . . . . . 34
2.02. Limitations on Commitment to Make Advances. . . . . . . . . . . . 35
2.02(a) Limitations on Base Facility Credit Commitment. . . . . 35
2.02(b) Limitations on Revolving Facility Credit
Commitment. . . . . . . . . . . . . . . . . . . . . . . 36
2.02(c) Limitations on any Advance. . . . . . . . . . . . . . . 37
2.03. Determination and Confirmation of Interest Rate and Other
Terms of Each Advance . . . . . . . . . . . . . . . . . . . . . . 37
2.03(a) Quote . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.03(b) Rate Setting. . . . . . . . . . . . . . . . . . . . . . 38
2.03(c) Rate Confirmation . . . . . . . . . . . . . . . . . . . 38
2.03(d) Coupon Rate . . . . . . . . . . . . . . . . . . . . . . 39
2.03(e) Advance Confirmation Instrument . . . . . . . . . . . . 40
ARTICLE III INITIAL ADVANCE . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.01. Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.02. Conditions Precedent to Initial Advance . . . . . . . . . . . . . 41
ARTICLE IV FUTURE ADVANCES . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.01. Procedure for Obtaining Future Advances . . . . . . . . . . . . . 42
4.02. Conditions Precedent to Future Advances . . . . . . . . . . . . . 42
ARTICLE V CONVERSION OF REVOLVING FACILITY CREDIT COMMITMENT TO BASE
FACILITY CREDIT COMMITMENT. . . . . . . . . . . . . . . . . . . . 43
5.01. Right to Convert. . . . . . . . . . . . . . . . . . . . . . . . . 43
5.02. Procedure for Obtaining Conversion. . . . . . . . . . . . . . . . 43
5.03. Limitations on Right to Convert . . . . . . . . . . . . . . . . . 44
5.04. Conditions Precedent to Conversion. . . . . . . . . . . . . . . . 44
5.05. Interest Rate of Base Facility Advances After Conversion. . . . . 45
ARTICLE VI ADDITIONS OF COLLATERAL . . . . . . . . . . . . . . . . . . . . . 45
6.01. Right to Add Collateral . . . . . . . . . . . . . . . . . . . . . 45
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6.02. Procedure for Adding Collateral . . . . . . . . . . . . . . . . . 46
6.03. Conditions Precedent to Addition of an Additional
Mortgaged Property to the Collateral Pool . . . . . . . . . . . . 47
6.04. Other Types of Collateral . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VII RELEASES OF COLLATERAL. . . . . . . . . . . . . . . . . . . . . . 49
7.01. Right to Obtain Releases of Collateral. . . . . . . . . . . . . . 49
7.02. Procedure for Obtaining Releases of Collateral. . . . . . . . . . 49
7.03. Conditions Precedent to Release of Collateral Release
Property from the Collateral. . . . . . . . . . . . . . . . . . . 51
ARTICLE VIII EXPANSION OF CREDIT FACILITY. . . . . . . . . . . . . . . . . . . 53
8.01. Right to Increase Maximum Credit Commitment . . . . . . . . . . . 53
8.02. Procedure for Obtaining Increases in Maximum Credit
Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.03. Limitations on Right to Increase Maximum Credit Commitment. . . . 54
8.04. Conditions Precedent to Increase in Maximum Credit
Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.05. Interest Rate of Advances After Increase in Maximum Credit
Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE IX COMPLETE OR PARTIAL TERMINATION OF REVOLVING FACILITY . . . . . . 55
9.01. Right to Complete or Partial Termination of
Revolving Facility. . . . . . . . . . . . . . . . . . . . . . . . 55
9.02. Procedure for Complete or Partial Termination of
Revolving Facility. . . . . . . . . . . . . . . . . . . . . . . . 55
9.03. Conditions Precedent to Complete or Partial Termination
of Revolving Facility . . . . . . . . . . . . . . . . . . . . . . 56
9.04. Complete Termination of Revolving Facility Upon Expiration
of Revolving Facility . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE X TERMINATION OF CREDIT FACILITY. . . . . . . . . . . . . . . . . . 56
10.01. Right to Terminate Credit Facility. . . . . . . . . . . . . . . . 56
10.02. Procedure for Terminating Credit Facility . . . . . . . . . . . . 56
10.03. Conditions Precedent to Termination of Credit Facility. . . . . . 57
ARTICLE XI GENERAL CONDITIONS PRECEDENT TO ALL REQUESTS. . . . . . . . . . . 58
(a) Payment of Expenses. . . . . . . . . . . . . . . . . . . . . 58
(b) No Material Adverse Change . . . . . . . . . . . . . . . . . 58
(c) No Default . . . . . . . . . . . . . . . . . . . . . . . . . 58
(d) No Insolvency. . . . . . . . . . . . . . . . . . . . . . . . 58
(e) No Untrue Statements . . . . . . . . . . . . . . . . . . . . 59
(f) Representations and Warranties . . . . . . . . . . . . . . . 59
(g) No Condemnation or Casualty. . . . . . . . . . . . . . . . . 59
(h) Delivery of Closing Documents. . . . . . . . . . . . . . . . 59
(i) Delivery of Closing Documents Relating to Initial
Advance Request, Collateral Addition Request or
Credit Facility Expansion Request. . . . . . . . . . . . . . 59
(j) Delivery of Property-Related Documents . . . . . . . . . . . 60
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ARTICLE XII REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . 61
12.01. Representations and Warranties of the AIMCO Parties . . . . . . . 61
12.02. Representations and Warranties of the Owners. . . . . . . . . . . 67
12.03. Representations and Warranties of the Lender. . . . . . . . . . . 72
ARTICLE XIII COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
13.01. Affirmative Covenants of the AIMCO Parties. . . . . . . . . . . . 73
13.01(a) Compliance with Agreements; No Amendments . . . . . . . 73
13.01(b) Maintenance of Existence. . . . . . . . . . . . . . . . 73
13.01(c) Maintenance of REIT Status. . . . . . . . . . . . . . . 74
13.01(d) Financial Statements; Accountants' Reports; Other
Information . . . . . . . . . . . . . . . . . . . . . . 74
13.01(e) Certificate of Compliance . . . . . . . . . . . . . . . 77
13.01(f) Maintain Licenses . . . . . . . . . . . . . . . . . . . 77
13.01(g) Access to Records; Discussions With Officers and
Accountants . . . . . . . . . . . . . . . . . . . . . . 78
13.01(h) Inform the Lender of Material Events. . . . . . . . . . 78
13.01(i) Single-Purpose Entities . . . . . . . . . . . . . . . . 80
13.01(j) Inspection. . . . . . . . . . . . . . . . . . . . . . . 80
13.01(k) Compliance with Applicable Laws . . . . . . . . . . . . 80
13.01(l) Warranty of Title . . . . . . . . . . . . . . . . . . . 81
13.01(m) Defense of Actions. . . . . . . . . . . . . . . . . . . 81
13.01(n) Property Management; Maintenance of Properties. . . . . 82
13.01(o) Additions to the Mortgaged Properties . . . . . . . . . 82
13.01(p) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . 83
13.01(q) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 83
13.01(r) Further Assurances. . . . . . . . . . . . . . . . . . . 84
13.01(s) Monitoring Compliance . . . . . . . . . . . . . . . . . 84
13.01(t) Leases. . . . . . . . . . . . . . . . . . . . . . . . . 84
13.01(u) Appraisals. . . . . . . . . . . . . . . . . . . . . . . 84
13.01(v) Expenses. . . . . . . . . . . . . . . . . . . . . . . . 84
13.01(w) Ownership . . . . . . . . . . . . . . . . . . . . . . . 85
13.01(x) Publicly Held REIT. . . . . . . . . . . . . . . . . . . 86
13.01(y) Change in Senior Management . . . . . . . . . . . . . . 86
13.01(z) Date-Down Endorsements. . . . . . . . . . . . . . . . . 87
13.01(aa) Disposition of Lakehaven Notes. . . . . . . . . . . . . 87
13.01(bb) Strategic Plan. . . . . . . . . . . . . . . . . . . . . 88
13.01(cc) Increased Costs and Reduction of
Return . . . . . . . . . . . . . . . . . . . . . . . . 88
13.02 Negative Covenants of the AIMCO Parties . . . . . . . . . . . . . 89
13.02(a) Other Activities. . . . . . . . . . . . . . . . . . . . 89
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13.02(b) Compliance with the Loan Documents. . . . . . . . . . . 90
13.02(c) Value of Security . . . . . . . . . . . . . . . . . . . 90
13.02(d) Zoning. . . . . . . . . . . . . . . . . . . . . . . . . 90
13.02(e) Liens . . . . . . . . . . . . . . . . . . . . . . . . . 90
13.02(f) Sale. . . . . . . . . . . . . . . . . . . . . . . . . . 90
13.02(g) Indebtedness. . . . . . . . . . . . . . . . . . . . . . 90
13.02(h) Single-Purpose Entity . . . . . . . . . . . . . . . . . 90
13.02(i) Principal Place of Business . . . . . . . . . . . . . . 90
13.02(j) Frequency of Requests . . . . . . . . . . . . . . . . . 91
13.02(k) Change in Property Management . . . . . . . . . . . . . 91
13.02(l) Shelf Condominiums. . . . . . . . . . . . . . . . . . . 91
13.02(m) Restrictions on Ownership
Distributions . . . . . . . . . . . . . . . . . . . . . 91
13.02(n) Status as a Public Real Estate Investment Trust . . . . 91
13.02(o) Lines of Business . . . . . . . . . . . . . . . . . . . 92
13.02(p) Limitation on Unimproved Real
Property . . . . . . . . . . . . . . . . . . . . . . . 92
13.02(q) Limitation on Unimproved Real Property and New
Construction. . . . . . . . . . . . . . . . . . . . . . 92
13.02(r) No Encumbrance of Collateral Release Property . . . . . 92
13.02(s) No Further Pledge of Lakehaven Notes or Foreclosure
of Lakehaven Property . . . . . . . . . . . . . . . . . 92
13.03. Financial Covenants of the AIMCO Parties. . . . . . . . . . . . . 93
13.03(a) Financial Definitions . . . . . . . . . . . . . . . . . 93
13.03(b) Compliance with Debt Service Coverage Ratios. . . . . . 99
13.03(c) Compliance with Loan to Value Ratios. . . . . . . . . . 99
13.03(d) Compliance with Concentration Test. . . . . . . . . . . 99
13.03(e) Compliance with REIT's Net Worth Test . . . . . . . . . 99
13.04. Covenants of the Lender . . . . . . . . . . . . . . . . . . . . .100
13.04(a) Cap Rates . . . . . . . . . . . . . . . . . . . . . . .100
13.04(b) Valuations. . . . . . . . . . . . . . . . . . . . . . .100
13.04(c) Interest on Cash Collateral . . . . . . . . . . . . . .102
13.04(d) Confidentiality . . . . . . . . . . . . . . . . . . . .102
ARTICLE XIV FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
14.01. Fee Definitions . . . . . . . . . . . . . . . . . . . . . . . . .102
14.02. Standby Fee . . . . . . . . . . . . . . . . . . . . . . . . . . .102
14.03. Origination Fees. . . . . . . . . . . . . . . . . . . . . . . . .103
14.04. Due Diligence Fees. . . . . . . . . . . . . . . . . . . . . . . .103
14.05. Document Fees . . . . . . . . . . . . . . . . . . . . . . . . . .104
14.06. Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . .104
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14.07. MBS-Related Costs . . . . . . . . . . . . . . . . . . . . . . . .105
14.08. Other Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . .105
ARTICLE XV CASH MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . .105
ARTICLE XVI EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . .106
16.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . .106
ARTICLE XVII REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
17.01. Remedies; Waivers . . . . . . . . . . . . . . . . . . . . . . . .110
17.02. No Remedy Exclusive . . . . . . . . . . . . . . . . . . . . . . .111
17.03. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . .112
17.04. No Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . .112
17.05. Application of Payments . . . . . . . . . . . . . . . . . . . . .112
ARTICLE XVIII RIGHTS OF XXXXXX XXX. . . . . . . . . . . . . . . . . . . . . . .112
18.01. Special Pool Purchase Contract. . . . . . . . . . . . . . . . . .112
18.02. Assignment of Rights. . . . . . . . . . . . . . . . . . . . . . .112
18.03. Release of Collateral . . . . . . . . . . . . . . . . . . . . . .113
18.04. Replacement of Lender . . . . . . . . . . . . . . . . . . . . . .113
18.05. Xxxxxx Mae and Lender Fees and Expenses . . . . . . . . . . . . .113
18.06. Third-Party Beneficiary . . . . . . . . . . . . . . . . . . . . .114
ARTICLE XIX INSURANCE, REAL ESTATE TAXES. . . . . . . . . . . . . . . . . . .114
19.01. Insurance and Real Estate Taxes . . . . . . . . . . . . . . . . .114
19.02. Replacement Reserves. . . . . . . . . . . . . . . . . . . . . . .114
ARTICLE XX MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . .114
20.01. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . .114
20.02. Amendments, Changes and Modifications . . . . . . . . . . . . . .115
20.03. Payment of Costs, Fees and Expenses . . . . . . . . . . . . . . .115
20.04. Payment Procedure . . . . . . . . . . . . . . . . . . . . . . . .115
20.05. Payments on Business Days . . . . . . . . . . . . . . . . . . . .115
20.06. Choice of Law; Consent to Jurisdiction; Waiver of
Jury Trial. . . . . . . . . . . . . . . . . . . . . . . . . . . .116
20.07. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . .117
20.08. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . .117
20.09. Further Assurances and Corrective Instruments . . . . . . . . . .118
20.10. Term of this Agreement. . . . . . . . . . . . . . . . . . . . . .119
20.11. Assignments; Third-Party Rights . . . . . . . . . . . . . . . . .119
20.12. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . .119
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20.13. General Interpretive Principles . . . . . . . . . . . . . . . . .119
20.14. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . .119
20.15. Standards for Decisions, Etc. . . . . . . . . . . . . . . . . . .120
20.16. Decisions in Writing. . . . . . . . . . . . . . . . . . . . . . .120
20.17. Waiver of Conditions. . . . . . . . . . . . . . . . . . . . . . .120
20.18. Contribution Agreement. . . . . . . . . . . . . . . . . . . . . .120
20.19. References to Loan Documents. . . . . . . . . . . . . . . . . . .120
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EXHIBITS
EXHIBIT A - Schedule of Owners
EXHIBIT B - Schedule of Lakehaven Notes and Lakehaven Mortgages
EXHIBIT C - Assignment of Ownership Interests
EXHIBIT D - Base Facility Note
EXHIBIT E - Cash Management Agreement
EXHIBIT F - Compliance Certificate
EXHIBIT G - Sample Facility Debt Service
EXHIBIT H-1 - Lakehaven Note Pledge Agreement (Lakehaven One)
EXHIBIT H-2 - Lakehaven Note Pledge Agreement (Lakehaven Two)
EXHIBIT I - Organizational Certificate
EXHIBIT J - Organizational Chart
EXHIBIT K - Owner Guaranty
EXHIBIT L - REIT Guaranty
EXHIBIT M - Replacement Reserve Agreement
EXHIBIT N - Revolving Credit Endorsement
EXHIBIT O - Revolving Facility Note
EXHIBIT P - Security Instrument for Initial Mortgaged Property
EXHIBIT Q - Tie-In Endorsement
EXHIBIT R-1 - Rate Setting Form (Base Facility)
EXHIBIT R-2 - Rate Setting Form (Revolving Facility)
EXHIBIT S-1 - Rate Confirmation Form (Base Facility)
EXHIBIT S-2 - Rate Confirmation Form (Revolving Facility)
EXHIBIT T - Example of Imputed Interest Formula
EXHIBIT U - Advance Confirmation Instrument
EXHIBIT V-1 - Future Advance Request (Base Facility)
EXHIBIT V-2 - Future Advance Request (Revolving Facility)
EXHIBIT W - Conversion Request
EXHIBIT X - Master Credit Facility Agreement Conversion Amendment
EXHIBIT Y - Collateral Addition Request
EXHIBIT Z - Collateral Addition Description Package
EXHIBIT AA - Collateral Addition Request - Supporting Documents
EXHIBIT BB - Collateral Release Request
EXHIBIT CC - Collateral Release Request - Confirmation of Obligations
EXHIBIT DD - Credit Facility Expansion Request
EXHIBIT EE - Revolving Facility Termination Request
EXHIBIT FF - Revolving Facility Termination Amendment
EXHIBIT GG - Credit Facility Termination Request
EXHIBIT HH - Schedule of Property Management Agreements
vii
EXHIBIT II - Independent Unit Encumbrances
EXHIBIT JJ - Contribution Agreement
viii
MASTER CREDIT FACILITY AGREEMENT
THIS MASTER CREDIT FACILITY AGREEMENT is made as of the 4th day of
February, 1998, by and among (i)(a) APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
a Maryland corporation (the "REIT"), (b) AIMCO PROPERTIES, L.P., a Delaware
limited partnership (the "BORROWER"), (c) AIMCO/BLUFFS, L.L.C., a Delaware
limited liability company, AIMCO CHESAPEAKE, L.P., a Delaware limited
partnership, AIMCO ELM CREEK, L.P., a Delaware limited partnership, AIMCO
LAKEHAVEN, L.P., a Delaware limited partnership and AIMCO LOS ARBOLES, L.P., a
Delaware limited partnership(each of the parties set forth in clause (c) being
referred to as the "INITIAL OWNERS", and, together with such additional Persons
as may agree to be bound by this Agreement in the future as an Owner, being
collectively referred to as the "OWNERS")(the REIT, the Borrower and the Owners
being collectively referred to as the "AIMCO PARTIES" and individually referred
to as an "AIMCO PARTY") and (ii) WASHINGTON MORTGAGE FINANCIAL GROUP, LTD., a
Delaware corporation (the "LENDER").
RECITALS
A. The REIT is the sole shareholder of AIMCO-GP, Inc., a Delaware corporation,
and AIMCO-LP, Inc., a Delaware corporation.
B. AIMCO-GP, Inc. is a 1% general partner in, and AIMCO-LP, Inc. is an
87% limited partner in, the Borrower.
C. AIMCO Holdings QRS, Inc., a Delaware corporation, is a 2% general
partner in, and the Borrower is a 98% limited partner in, AIMCO Holdings, L.P.,
a Delaware limited partnership.
D. AIMCO Holdings is a 1% general partner in, and the Borrower is a 99%
limited partner in, each Initial Owner (other than AIMCO/Bluffs, L.L.C.). AIMCO
Holdings is a 1% managing member, the Borrower is a 98.42% member and Property
Asset Management Services, L.P., a Delaware limited partnership, is a 0.58%
member, in AIMCO/Bluffs, L.L.C.
E. Each of the Initial Owners (other than AIMCO Lakehaven, L.P.) is the
owner of a certain Multifamily Residential Property (capitalized terms used but
not defined shall have the meanings ascribed to such terms in Article I of this
Agreement), as more particularly described in EXHIBIT A to this Agreement
opposite the name of the Initial Owner.
F. AIMCO Lakehaven, L.P. is the holder of the Lakehaven Notes described
on EXHIBIT B to this Agreement.
1
G. The Borrower has requested that the Lender establish a $50,000,000
Credit Facility in favor of the Borrower, comprised initially of a $50,000,000
Revolving Facility, all or part of which can be converted to a Base Facility in
accordance with, and subject to, the terms and conditions of this Agreement.
Either or both of the Revolving Facility and the Base Facility may be reduced or
expanded in accordance with, and subject to, the terms, conditions and
limitations of this Agreement.
H. To secure the obligations of the AIMCO Parties under this Agreement
and the other Loan Documents issued in connection with the Credit Facility, the
Initial Owners shall create a Collateral Pool in favor of the Lender. The
Collateral Pool shall be comprised initially of (i) Security Instruments on the
Multifamily Residential Properties owned by the Owners and related Collateral
and (ii) a security interest, pursuant to the Lakehaven Note Pledge Agreements,
of the Lakehaven Notes and certain other related collateral owned by AIMCO
Lakehaven, L.P., as more particularly described in the Lakehaven Note Pledge
Agreements and (iii) certain other property interests, as more particularly
described in this Agreement and the Security Documents.
I. Each of the Security Documents shall be cross-defaulted (i.e., a
default under any Security Document, or under this Agreement, shall constitute a
default under each other Security Document, and this Agreement) and
cross-collateralized (i.e., each Security Document shall secure all of the AIMCO
Parties' obligations under this Agreement and the other Loan Documents issued in
connection with the Credit Facility).
J. Subject to the terms, conditions and limitations of this Agreement,
the Lender has agreed to establish the Credit Facility.
NOW, THEREFORE, the AIMCO Parties and the Lender, in consideration of the
mutual promises and agreements contained in this Agreement, hereby agree as
follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, the following terms shall have the
respective meanings set forth below:
"ADDITIONAL MORTGAGED PROPERTY" means each Multifamily Residential
Property owned by an Owner (either in fee simple or as tenant under a
ground lease meeting all of the requirements of the DUS Guide) and added to
the Collateral Pool after the Initial Closing Date pursuant to Article VI.
2
"ADVANCE" means a loan made by the Lender to the Borrower under the
Credit Facility pursuant to this Agreement.
"ADVANCE CONFIRMATION INSTRUMENT" shall have the meaning set forth in
Section 2.03(e).
"AFFILIATE" or "AFFILIATED" means, when used with reference to a
specified Person, (i) any Person which, directly or indirectly, is in
control of, is controlled by, or is under common control with, the
specified Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of the other
Person, whether through the ownership of voting securities, by contract or
otherwise. Without limitation, any director, executive officer or
beneficial owner of ten percent (10%) or more of the equity of a Person
shall be deemed to control such Person. In no event shall the Lender be
deemed an "Affiliate" of any AIMCO Party.
"AGGREGATE DEBT SERVICE COVERAGE RATIO FOR THE TRAILING 12 MONTH
PERIOD" means, for any specified date, the ratio (expressed as a
percentage) of--
(a) the sum of--
(1) the aggregate of the Net Operating Income for the Trailing
12 Month Period for the Mortgaged Properties as of the
specified date, and
(2) the aggregate of the Lakehaven Notes Debt Service for the
Trailing 12 Month Period as of the specified date,
TO
(b) the Facility Debt Service on the specified date.
"AGGREGATE DEBT SERVICE COVERAGE RATIO FOR THE TRAILING THREE MONTH
PERIOD" means, for any specified date, the ratio (expressed as a
percentage) of--
(a) the product obtained by multiplying--
(1) the sum of--
3
(A) the aggregate of the Net Operating Income for the
Trailing Three Month Period for the Mortgaged
Properties as of the specified date, and
(B) the aggregate of the Lakehaven Notes Debt Service for
the Trailing Three Month Period as of the specified
date,
by
(2) four,
TO
(b) the Facility Debt Service on the specified date.
"AGGREGATE DEBT SERVICE COVERAGE RATIOS" means, as of any specified
date, the Aggregate Debt Service Coverage Ratio for the Trailing Three
Month Period as of the specified date and the Aggregate Debt Service
Coverage Ratio for the Trailing 12 Month Period as of the specified date.
"AGGREGATE DEBT SERVICE COVERAGE RATIO" means, as of any specified date,
either the Aggregate Debt Service Coverage Ratio for the Trailing Three
Month Period as of the specified date or the Aggregate Debt Service
Coverage Ratio for the Trailing 12 Month Period as of the specified date.
"AGGREGATE LOAN TO VALUE RATIO FOR THE TRAILING 12 MONTH PERIOD"
means, for any specified date, the ratio (expressed as a percentage) of--
(a) the Advances Outstanding on the specified date,
TO
(b) the aggregate of the Valuations most recently obtained prior to
the specified date for all of the Mortgaged Properties and the
Lakehaven Notes.
"AGREEMENT" means this Master Credit Facility Agreement, as it may be
amended, supplemented or otherwise modified from time to time, including
all Recitals and Exhibits to this Agreement, each of which is hereby
incorporated into this Agreement by this reference.
4
"AIMCO HOLDINGS" means AIMCO Holdings, L.P., a Delaware limited
partnership, the sole general partner or managing member, as applicable, of
each of the Owners.
"AIMCO PARTIES" means the REIT, the Borrower and the Owners.
"AIMCO-RELATED MANAGEMENT AGENT" means a management agent that the
REIT controls, or one or more members of Senior Management controls,
directly or indirectly.
"ALTERATION" shall have the meaning set forth in Section 13.01(o).
"AMORTIZATION PERIOD" means, with respect to each Base Facility
Advance, the period of not less than 20 and not more than 30 years selected
by the Borrower pursuant to the Request for the applicable Base Facility
Advance.
"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 Mortgaged 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 Mortgaged
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 Mortgaged Property, and (e) requirements of insurance companies or
similar organizations, affecting the operation or use of any Mortgaged
Property or the consummation of the transactions to be effected by this
Agreement or any of the other Loan Documents.
"APPRAISAL" means an appraisal of a Multifamily Residential Property
conforming to the requirements of Chapter 5 of Part III of the DUS Guide
and performed by an appraiser selected by the Borrower from a list,
furnished by the Lender, of Lender-approved appraisers for the local market
in which the Multifamily Residential Property is located.
"APPRAISED VALUE" means the value set forth in an Appraisal.
"ASSIGNMENT OF OWNERSHIP INTERESTS" means each Collateral Assignment
of Ownership Interests executed by AIMCO Holdings and the Borrower, in the
form attached
5
as EXHIBIT C to this Agreement, pursuant to which the Lender is
collaterally assigned all of the Ownership Interests in each of the Owners.
"BANK OF AMERICA" Bank of America National Trust and Savings
Association.
"BANK OF AMERICA FACILITY" means a credit facility established by the
Borrower with Bank of America in an amount up to $100,000,000 pursuant to
the Bank of America Facility Documents.
"BANK OF AMERICA FACILITY DOCUMENTS" means that certain Credit
Agreement dated as of January 26, 1998 by and among the Borrower, Bank of
America and certain other parties, any other documents executed by the
Borrower in connection therewith, and all amendments, extensions and
renewals of any of the foregoing.
"BASE FACILITY" means the agreement of the Lender to make Advances to
the Borrower pursuant to Section 2.01(b)(2).
"BASE FACILITY ADVANCE" shall have the meaning set forth in Section
2.01(b)(2).
"BASE FACILITY AVAILABILITY PERIOD" means the period beginning on the
Initial Closing Date and ending on the 180th day before the last day of the
fifth Loan Year.
"BASE FACILITY CREDIT COMMITMENT" means an amount equal to the
aggregate amount of Revolving Facility Credit Commitment which is converted
to Base Facility Credit Commitment in accordance with, and subject to, the
provisions of Article V, or such greater amount, as the Borrower may elect
in accordance with, and subject to, the provisions of Article VIII, which
amount shall not, in any event, be greater than the amount by which the
Maximum Credit Commitment exceeds the Revolving Facility Credit Commitment.
"BASE FACILITY NOTE" means a promissory note, in the form attached as
EXHIBIT D to this Agreement, which will be issued by the Borrower to the
Lender, concurrently with the funding of each Base Facility Advance, to
evidence the Borrower's obligation to repay such Base Facility Advance.
"BASE FACILITY TERMINATION DATE" means, at any time during which Base
Facility Advances are Outstanding, the latest maturity date for any Base
Facility Advance Outstanding, and, at any time during which Base Facility
Advances are not Outstanding, the Revolving Facility Termination Date.
6
"BASE FACILITY TERMINATION FEE" means, with respect to any Credit
Facility Termination Request, the aggregate of all Guarantee Fee and
Servicing Fee Yield Maintenance Amounts (as defined in such Base Facility
Notes) calculated under the Base Facility Notes.
"BORROWER" means AIMCO Properties, L.P., a Delaware limited
partnership.
"BUSINESS DAY" means a day on which Xxxxxx Xxx is open for business.
"CAP RATE" means, for each Mortgaged Property, a capitalization rate
selected by the Lender in accordance with Section 13.04 for use in
determining the Valuations.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central lender or other Governmental Authority having
jurisdiction, or any other law, rule or regulation, whether or not having
the force of law, regarding capital adequacy of any lender, including the
Lender, or Xxxxxx Mae.
"CARRYING VALUE" means, with respect to any asset or liability of any
Person, the amount at which such asset or liability has been recorded or,
in accordance with GAAP, should have been recorded, in the books of account
of such Person, as reduced by any reserves or write-downs which have been
announced, set aside or taken or, in accordance with GAAP, should have been
set aside or taken, with respect thereto; PROVIDED, HOWEVER, that, if more
than one method of recording the amount of any asset or liability, or the
setting aside or taking of any reserves or write-downs with respect
thereto, is permitted under GAAP, the permitted method actually used shall
be controlling for purposes of determining Carrying Value, provided that
such method is used in a manner consistent with prior periods.
"CASH COLLATERAL" means (a) cash, (b) Permitted Investments and (c)
letters of credit complying with the requirements of the DUS Guide for
letters of credit.
"CASH MANAGEMENT AGREEMENT" means that certain Cash Management
Security, Pledge and Assignment Agreement between the Borrower, the Initial
Owners and the Lender in the form attached as EXHIBIT E to this Agreement.
"CLOSING DATE" means the Initial Closing Date and each date after the
Initial Closing Date on which the funding or other transaction requested in
a Request is required to occur.
"COLLATERAL" means the Mortgaged Properties and other collateral from
time to time or at any time encumbered by the Security Documents, the
Lakehaven Collateral, the Ownership Interests in the Owners encumbered by
the Assignment of Ownership Interests
7
or any other property in which the Lender has been granted a security
interest to secure any of the AIMCO Parties' obligations under the Loan
Documents.
"COLLATERAL ADDITION FEE" means, with respect to an Additional
Mortgaged Property added to the Collateral Pool in accordance with Article
VI, a fee equal to the product obtained by multiplying--
(i) 51 basis points, by
(ii) the increase in the amount of Advances Outstanding which the
Borrower can borrow as a result of the addition of the Additional
Mortgaged Property to the Collateral Pool, as determined by the Lender
in accordance with Section 6.02(c).
"COLLATERAL ADDITION LOAN DOCUMENTS" means an Owner Guaranty from the
Owner of the Additional Mortgaged Property, a Security Instrument covering
an Additional Mortgaged Property and any other documents, instruments or
certificates required by the Lender in connection with the addition of the
Additional Mortgaged Property to the Collateral Pool pursuant to Article
VI.
"COLLATERAL ADDITION REQUEST" shall have the meaning set forth in
Section 6.02(a).
"COLLATERAL POOL" means the aggregate total of the Collateral.
"COLLATERAL RELEASE REQUEST" shall have the meaning set forth in
Section 7.02(a).
"COLLATERAL RELEASE PROPERTY" shall have the meaning set forth in
Section 7.02(a).
"COMPLIANCE CERTIFICATE" means a certificate of the AIMCO Parties in
the form attached as EXHIBIT F to this Agreement.
"CONTINGENT OBLIGATION" means, as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another
Person (including any bank under any letter of credit) to induce the
creation of a primary obligation (as defined below) 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, lease, dividend or other obligation (the "PRIMARY
OBLIGATIONS") of any third person (the "PRIMARY OBLIGOR") in any manner,
whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, to (1) purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (2) advance or supply funds for the purchase or payment of any
such primary obligation or to maintain working capital
8
or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (3) 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 (4) otherwise assure or hold harmless the owner
of any such primary obligation against loss in respect of the primary
obligation, 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 or (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 the guaranteeing person in good faith.
"COUPON RATE" shall have the meaning set forth in Section 2.03.
"CREDIT FACILITY" means the Base Facility and the Revolving Facility.
"CREDIT FACILITY EXPANSION LOAN DOCUMENTS" means amendments to the
Revolving Facility Note (if the Revolving Facility Credit Commitment is
increasing) and Security Documents, duly executed and delivered by the
parties thereto (other than the Lender), increasing the amount evidenced or
secured, as applicable, to the amount of the Maximum Credit Commitment, as
expanded in accordance with Article VIII.
"CREDIT FACILITY EXPANSION REQUEST" shall have the meaning set forth
in Section 8.02(a).
"CREDIT FACILITY TERMINATION DATE" means the Base Facility Termination
Date.
"CREDIT FACILITY TERMINATION FEE" means an amount equal to the sum
of--
(i) the Base Facility Termination Fee, if any; and
(ii) the Revolving Facility Termination Fee, if any.
"CREDIT FACILITY TERMINATION REQUEST" shall have the meaning set forth
in Section 10.02.
9
"DISCOUNT" means, with respect to any Revolving Facility Advance, an
amount equal to the excess of --
(i) the face amount of the MBS backed by the Revolving Facility
Advance, over
(ii) the gross proceeds to the Lender of the sale of the MBS
backed by the Revolving Facility Advance.
"DISPOSITION" means the sale, lease, conveyance, transfer or other
disposition of (whether in one or a series of transactions) any Property,
including accounts and notes receivable (with or without recourse) and
sale-leaseback transactions, but otherwise excluding Permitted Liens.
"DUS GUIDE" means the Xxxxxx Xxx Multifamily Delegated Underwriting
and Servicing (DUS) Guide in effect as of the date hereof, as such Guide
may be amended from time to time, including amendments in the form of
Lender Memos, Guide Updates and Guide Announcements (and, if such Guide is
superseded by a Negotiated Transactions Guide, the term "DUS Guide" as used
in this Agreement means the Negotiated Transactions Guide, as such Guide
may be amended from time to time, including amendments in the form of
Lender Memos, Guide Updates and Guide Announcements). All references to
specific articles and sections of the DUS Guide shall be deemed references
to such articles and sections as they may be amended, modified, updated,
superseded, supplemented or replaced from time to time.
"DUS UNDERWRITING REQUIREMENTS" means the overall underwriting
requirements for Multifamily Residential Properties as set forth in the DUS
Guide.
"ELM CREEK PROPERTY" means the Mortgaged Property described as such on
Exhibit A to this Agreement.
"ENVIRONMENTAL ASSESSMENT" means, with respect to a Multifamily
Residential Property, an assessment and report on environmental conditions
performed in accordance with Section 204 of Part III of the DUS Guide and
Part X of the DUS Guide.
"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,
10
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 Multifamily Residential Property.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EVENT OF DEFAULT" means any event defined to be an "Event of Default"
under Article XVI.
"EVIDENCE OF COMPLIANCE WITH PROPERTY LAWS" means evidence
satisfactory to the Lender of compliance with Section 205 and 206 of Part
III of the DUS Guide.
"FACILITY DEBT SERVICE" means, as of any specified date, the sum of--
(a) the amount of interest and principal amortization, during the 12
month period immediately succeeding the specified date, with
respect to the Advances Outstanding on the specified date, which
shall, for these purposes, be calculated in accordance with
subparagraph (i) or (ii), as applicable:
(i) the interest and principal amortization for each Revolving
Facility Advance shall be determined as if each Revolving
Facility Advance required level monthly payments of
principal and interest (at the Coupon Rate for the Revolving
Facility Advance) in an amount necessary to fully amortize
the original principal amount of the Revolving Facility
Advance over a 30-year period, with such amortization deemed
to commence on the first day of the 12 month period, and
(ii) the interest and principal amortization for each Base
Facility Advance shall be determined on the basis of the
actual interest and principal amortization due under the
Base Facility Note evidencing the Base Facility Advance
(which Base Facility Note shall require level monthly
payments of principal and interest (at the Coupon Rate for
the Base Facility Advance) in an amount necessary to fully
amortize the original principal amount of the Base Facility
Advance over the Amortization Period for the Base Facility
Advance selected by the Borrower in accordance with Section
2.02(a)(4)); and
11
(b) the amount of the Standby Fees payable to the Lender pursuant to
Section 14.02 during such 12 month period (assuming, for these
purposes, that the Unused Capacity throughout the 12 month period
is always equal to the amount of Unused Capacity on the specified
date).
EXHIBIT G to this Agreement contains an example of the determination of the
Facility Debt Service.
"XXXXXX MAE" means the federally-chartered and stockholder-owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, 12 U.S.C. Section 1716 ET SEQ.
"FEE PORTION" means, as to any month, with respect to an Advance, an
amount per month equal to the product obtained by multiplying --
(a) the Fee Spread, by
(b) the amount of the Advance on the first day of such month; by
(c) 1/12.
"FEE SPREAD" means, with respect to an Advance, the number of basis
points for the Advance determined in accordance with Sections
2.03(d)(1)(ii), 2.03(d)(2)(ii) or 2.03(d)(3)(ii), as the case may be.
"FINANCIAL COVENANTS" means the covenants set forth in Section 13.03.
"FINANCING LEASE" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required by 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.
"FUTURE ADVANCE" means an Advance made after the Initial Closing Date.
"FUTURE ADVANCE REQUEST" shall have the meaning set forth in Section
4.01(a).
"GAAP" means generally accepted accounting principles in the United
States in effect from time to time, consistently applied.
"GENERAL CONDITIONS" shall have the meaning set forth in Article XI.
12
"GEOGRAPHICAL DIVERSIFICATION REQUIREMENTS" means, prior to the
occurrence of an increase in the Maximum Credit Commitment pursuant to
Article VIII, a requirement that the Collateral Pool consist of at least
five Mortgaged Properties (and, for these purposes, the Lakehaven
Properties shall be considered as one Mortgaged Property) located in at
least three states and, upon the occurrence of any increase in the Maximum
Credit Commitment pursuant to Article VIII, such requirements as to the
geographical diversity of the Collateral Pool as the Lender may determine
and notify Borrower of at the time of the increase.
"GOVERNMENT OBLIGATIONS" means direct obligations of, and obligations
on which the full and timely payment of principal and interest is
unconditionally guaranteed by, the full faith and credit of the United
States of America.
"GOVERNMENTAL ACTION" means any pending or, to the actual knowledge of
an AIMCO Party, threatened suit, proceeding, order, or governmental inquiry
or opinion involving any Mortgaged 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 court, board, agency, commission,
office or authority of any nature whatsoever for any governmental xxxx
(xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or otherwise) whether
now or hereafter in existence.
"GROSS REVENUES" means, for any specified period, with respect to any
Multifamily Residential Property, all income in respect of the Multifamily
Residential Property, as determined by the Lender in accordance with the
method described in paragraph 3 of Section 302.02 of Part V of the DUS
Guide, except that for these purposes the financial statements to be used
need not be audited and paragraph (b) of such paragraph 3 shall be taken
into account in the Lender's discretion.
"HAZARDOUS MATERIALS", with respect to any Mortgaged Property, shall
have the meaning given that term in the Security Instrument encumbering the
Mortgaged Property.
"HAZARDOUS MATERIALS LAW", with respect to any Mortgaged Property,
shall have the meaning given that term in the Security Instrument
encumbering the Mortgaged 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,
13
disposition, handling or transportation of any Hazardous Materials from,
under, into or on any Mortgaged Property in violation of Hazardous
Materials Laws, including the discharge of any Hazardous Materials
emanating from any Mortgaged 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 Mortgaged
Property in violation of Hazardous Materials Laws, in each case whether
sudden or nonsudden, accidental or nonaccidental.
"HIGHEST RATING CATEGORY" means an S&P rating category of "A-1+" for
instruments having a term of one year or less and "AAA" for instruments
having a term greater than one year, and a Xxxxx'x rating category of "P-1"
for instruments having a term of one year or less and "Aaa" for instruments
having a term greater than one year.
"IMPOSITIONS" means, with respect to any Mortgaged 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
Mortgaged 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.
"INDEBTEDNESS" means, with respect to any Person, as of any specified
date, without duplication, all (a) 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) other indebtedness
of such Person which is evidenced by a note, bond, debenture or similar
instrument, (c) obligations of such Person under Financing Leases, (d)
obligations of such Person in respect of acceptances (as defined in Article
3 of the Uniform Commercial Code of the Commonwealth of Virginia) issued or
created for the account of such Person, (e) 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 of such liabilities and
(f) Contingent Obligations.
"INITIAL ADVANCE" means the Revolving Facility Advance made on the
Initial Closing Date in the amount of $36,900,000.
"INITIAL ADVANCE REQUEST" shall have the meaning set forth in Section
3.01.
14
"INITIAL CLOSING DATE" means the date of this Agreement.
"INITIAL MORTGAGED PROPERTIES" means the Multifamily Residential
Properties described on Exhibit A to this Agreement (but shall exclude the
Lakehaven Properties).
"INITIAL OWNERS" shall have the meaning set forth in the first
paragraph of this Agreement.
"INITIAL SECURITY INSTRUMENTS" means the Security Instruments covering
the Initial Mortgaged Properties.
"INITIAL VALUATION" means, when used with reference to specified
Collateral, the Valuation initially performed for the Collateral as of the
date on which the Collateral was added to the Collateral Pool. The Initial
Valuation for each of the Initial Mortgaged Properties and the Lakehaven
Notes is as set forth in Exhibit A to this Agreement.
"INSURANCE POLICIES" means the insurance coverage and insurance
certificates evidencing such insurance required to be maintained pursuant
to the Security Instruments.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended.
"INVESTMENT" means (a) any purchase or acquisition of any capital
stock, equity interest, asset, obligation or other security of or any
interest in, any Person, (b) any advance, loan, extension of credit or
capital contribution to any Person, (c) any purchase, lease, or other
acquisition of Property for investment purposes or for the purpose of
resale or leasing to another Person, and (d) any contingent or other
agreement to do any of the foregoing.
"LAKEHAVEN COLLATERAL" means the Lakehaven Notes and all other
collateral granted to the Lender under the Lakehaven Note Pledge
Agreements, but excluding each Lakehaven Note and other collateral
constituting a Collateral Release Property from and after the date of the
release of the Collateral Release Property from the Collateral Pool.
"LAKEHAVEN I MORTGAGE" means the aggregate of those certain
instruments described as the Lakehaven I Mortgage on Exhibit B to this
Agreement.
"LAKEHAVEN II MORTGAGE" means the aggregate of those certain
instruments described as the Lakehaven II Mortgage on Exhibit B to this
Agreement.
"LAKEHAVEN I NOTE" means that certain promissory note described as the
Lakehaven I Note in Exhibit B to this Agreement.
15
"LAKEHAVEN II NOTE" means that certain promissory note described as
the Lakehaven II Note in Exhibit B to this Agreement.
"LAKEHAVEN I PROPERTY" means that real property encumbered by the
Lakehaven I Mortgage.
"LAKEHAVEN II PROPERTY" means that real property encumbered by the
Lakehaven II Mortgage.
"LAKEHAVEN LOAN DOCUMENTS" means the Lakehaven Notes and each of the
other documents or instruments evidencing, governing, securing or executed
in connection with the loans evidenced by the Lakehaven Notes.
"LAKEHAVEN NOTE PLEDGE AGREEMENT" means each Note Pledge Agreement, in
the form attached as EXHIBIT H-1 AND H-2 to this Agreement, by and between
AIMCO Lakehaven, L.P. and the Lender, pursuant to which AIMCO Lakehaven,
L.P. pledges the Lakehaven Notes and certain related collateral to the
Lender.
"LAKEHAVEN NOTES" means the Lakehaven I Note and the Lakehaven II
Note.
"LAKEHAVEN NOTES DEBT SERVICE" means, for any specified period, the
excess of--
(i) the aggregate of the amount of interest (including deferred,
accrued or additional interest, if any) and principal paid
by the Lakehaven Obligors during the specified period with
respect to the Lakehaven Notes Outstanding during the
period,
over
(ii) the amount, if any, of payments paid during the specified
period (excluding any deferred, accrued or additional
interest, if any) which are not scheduled to recur during
the 12 months immediately succeeding the specified period.
"LAKEHAVEN OBLIGOR" means Lakehaven Associates One Limited
Partnership, an Illinois limited partnership, the obligor of the Lakehaven
I Note, or Lakehaven Associates Two Limited Partnership, an Illinois
limited partnership, the obligor of the Lakehaven II Note.
"LAKEHAVEN PROPERTY" means the Lakehaven I Property or the Lakehaven
II Property.
16
"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 an exclusive
possessory interest in, or exclusive right to use or occupy all or any
portion of any space in any Mortgaged 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. The term "Lease" shall not include
any easement or other encumbrance in which the grantee is not granted an
exclusive right to occupy space in a Mortgaged Property.
"LENDER" shall have the meaning set forth in the first paragraph of
this Agreement.
"LIEN" means any mortgage, deed of trust, 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 DOCUMENTS" means this Agreement, the Notes, the Advance
Confirmation Instruments for the Revolving Facility Advances, each Owner
Guaranty, the REIT Guaranty, the Security Documents, all documents executed
by the AIMCO Parties pursuant to the General Conditions set forth in
Article XI of this Agreement and any other documents executed by an AIMCO
Party from time to time in connection with this Agreement or the
transactions contemplated by this Agreement.
"LOAN YEAR" means the 12-month period from the Initial Closing Date to
and including the last day before the first anniversary of the Initial
Closing Date, and each 12-month period thereafter.
"MAJOR CREDIT FACILITY" means any credit facility in favor of the
Borrower or the REIT in an amount of up to $100,000,000 or more, including
the Bank of America Facility.
"MAJOR CREDIT FACILITY DOCUMENT" means any document evidencing a Major
Credit Facility or otherwise executed by the Borrower or the REIT in
connection with the establishment or maintenance of a Major Credit
Facility, including the Bank of America Facility Documents, and all
amendments, extensions and renewals of any of the foregoing.
"MATERIAL ADVERSE EFFECT" means, with respect to 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
17
with any other event or events, act or acts, condition or conditions, or
circumstance or circumstances, whether or not related, and with respect to
any specified Person or Persons, a material adverse change in or a
materially adverse effect upon any of (a) the business, operations,
property or condition (financial or otherwise) of the specified Person or
Persons, (b) the present or future ability of the specified Person or
Persons to perform the Obligations for which it is liable, (c) the
validity, priority, perfection or enforceability of this Agreement or any
other Loan Document or the rights or remedies of the Lender under any Loan
Document, or (d) the value of, or the Lender's ability to have recourse
against, any Mortgaged Property.
"MAXIMUM AGGREGATE LOAN TO VALUE RATIO FOR THE TRAILING 12 MONTH
PERIOD" means an Aggregate Loan to Value Ratio for the Trailing 12 Month
Period equal to 60%.
"MAXIMUM CREDIT COMMITMENT" means, at any time, $50,000,000, or such
greater amount, not to exceed $250,000,000, as the Borrowers may elect in
accordance with, and subject to, the provisions of Article VIII, or such
lesser amount as the Borrowers may elect in accordance with, and subject
to, the provisions of Article IX.
"MBS" means mortgage-backed securities. An MBS which is "backed" by
an Advance means that the MBS is secured by an interest in the Notes and
the Collateral Pool securing the Notes, which interest permits the holder
of the MBS to participate in the Notes and the Collateral Pool to the
extent of the Advance.
"MBS IMPUTED INTEREST RATE" shall have the meaning set forth in
Section 2.03(c).
"MBS ISSUE DATE" is the date on which a Xxxxxx Xxx MBS is issued by
Xxxxxx Mae.
"MBS DELIVERY DATE" is the date on which a Xxxxxx Xxx MBS is delivered
by Xxxxxx Mae.
"MBS PASS-THROUGH RATE" shall have the meaning set forth in Section
2.03(c).
"MINIMUM AGGREGATE DEBT SERVICE COVERAGE RATIO FOR THE TRAILING 12
MONTH PERIOD" means an Aggregate Debt Service Coverage Ratio for the
Trailing 12 Month Period of 145%.
"MINIMUM AGGREGATE DEBT SERVICE COVERAGE RATIO FOR THE TRAILING THREE
MONTH PERIOD" means an Aggregate Debt Service Coverage Ratio for the
Trailing Three Month Period of 135%.
18
"MORTGAGED PROPERTIES" means, collectively, the Initial Mortgaged
Properties and the Additional Mortgaged Properties, but excluding each
Collateral Release Property from and after the date of the release of the
Collateral Release Property from the Collateral Pool.
"MULTIFAMILY RESIDENTIAL PROPERTY" means a residential property,
located in the United States, 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, and conforming to the
requirements of Sections 201 and 203 of Part III of the DUS Guide.
"NET OPERATING INCOME" means, for any specified period, with respect
to any Multifamily Residential Property, the aggregate net income during
such period equal to Gross Revenues during such period less the Operating
Expenses during such period. If a Mortgaged Property is not a part of the
Collateral Pool for the entire specified period, the Net Operating Income
for the Mortgaged Property for the time within the specified period during
which the Mortgaged Property is not a part of the Collateral Pool shall be
the Mortgaged Property's pro forma net operating income determined by the
Lender in accordance with the underwriting procedures set forth in Part III
of the DUS Guide.
"NOTE" means a Base Facility Note or the Revolving Facility Note, as
the context requires.
"NOTICE ADDRESS" means
(a) as to each of the AIMCO Parties:
c/o AIMCO
0000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxxx Xxxxx
Title: Chief Accounting Officer
Telecopy No.: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
19
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) as to the Lender:
Washington Mortgage Financial Group
0000 Xxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Ms. Xxxxxx Xxxxx-Xxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
(c) as to Xxxxxx Mae:
Xxxxxx Xxx
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Vice President for
Multifamily Asset Management
Telecopy No.: (000) 000-0000
20
with a copy to:
Arent Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
"OBLIGATIONS" means the aggregate of the obligations of each of the
AIMCO Parties under this Agreement and the other Loan Documents.
"OPERATING EXPENSES" means, for any period, with respect to any
Multifamily Residential Property, all expenses in respect of the
Multifamily Residential Property, as determined by the Lender in accordance
with the method described in paragraph 3 of Section 302.02 of Part V of the
DUS Guide, including replacement reserves (i) if the Multifamily
Residential Property is a Mortgaged Property, in an amount equal to the
"Monthly Deposits" applicable from time to time to the Multifamily
Residential Property as set forth in the Replacement Reserve Agreement for
the Multifamily Residential Property and (ii) if the Multifamily
Residential Property is not a Mortgaged Property, the amount of "Monthly
Deposits", as reasonably determined by the Lender, which would be required
if the Multifamily Residential Property were a Mortgaged Property. For the
purposes of this definition, (i) any waiver of Monthly Deposits under a
Replacement Reserve Agreement shall be disregarded, and the full amount of
the Monthly Deposit shall be applicable as if the waiver did not exist and
(ii) there shall be no double counting any expenses, including the cost of
any replacements.
"ORGANIZATIONAL CERTIFICATE" means a certificate of the AIMCO Parties
in the form attached as EXHIBIT I to this Agreement.
"ORGANIZATIONAL CHART" means the list of Subsidiaries and Affiliates
of the REIT and other Persons in which the REIT holds, directly or
indirectly, Ownership Interests, attached as EXHIBIT J to this Agreement.
"ORGANIZATIONAL DOCUMENTS" means all certificates, instruments and
other documents pursuant to which an organization is organized or operates,
including, (i) with respect to a corporation, its articles of incorporation
and bylaws, (ii) with respect to a limited partnership, its limited
partnership certificate and partnership agreement, (iii) with respect to a
general partnership or joint venture, its partnership or joint venture
agreement and (iv) with respect to a limited liability company, its
articles of organization and operating agreement.
21
"OUTSTANDING" means, when used in connection with promissory notes,
other debt instruments or Advances, for a specified date, promissory notes
or other debt instruments which have been issued, or Advances which have
been made, to the extent the same have not been repaid as of the specified
date. A Lakehaven Note will only be deemed Outstanding as of any specified
date if it is part of the Collateral Pool as of the specified date.
"OWNER" means the owner (either in fee simple or as tenant under a
ground lease meeting all of the requirements of the DUS Guide) of a
Mortgaged Property or the Lakehaven Notes or any other Collateral approved
by the Lender and for which a Valuation is performed.
"OWNER GUARANTY" means that certain Guaranty executed by each Owner
and attached as EXHIBIT K to this Agreement.
"OWNERSHIP INTERESTS" means, with respect to any entity, any ownership
interests in the entity and any economic rights (such as a right to
distributions, net cash flow or net income) to which the owner of such
ownership interests is entitled.
"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 Mortgaged Property
or any AIMCO Party's business.
"PERMITTED INVESTMENTS" means:
(i) Government Obligations;
(ii) direct obligations of, and obligations on which the full and
timely payment of principal and interest is unconditionally guaranteed by,
any agency or instrumentality of the United States of America (other than
the Federal Home Loan Mortgage Corporation) or direct obligations of the
World Bank, provided that such obligations are assigned a credit rating by
S&P and Moody's in the Highest Rating Category of S&P and of Moody's;
(iii) obligations of any state or territory of the United States
of America, or obligations of any agency, instrumentality, authority or
political subdivision of such state or territory, or obligations of any
public benefit or municipal corporation the principal of and interest on
which are guaranteed by such state or political subdivision and the
interest on
22
which is payable on a current basis, and which obligations are rated in the
Highest Rating Category of S&P and of Moody's;
(iv) any written repurchase agreement entered into with a
Qualified Financial Institution whose unsecured short-term obligations are
rated in the Highest Rating Category of S&P and of Moody's;
(v) commercial paper rated in the Highest Rating Category of S&P
and of Moody's;
(vi) (a) interest-bearing negotiable certificates of deposit,
interest-bearing time deposits, interest-bearing savings accounts or
bankers' acceptances, issued by a Qualified Financial Institution whose
unsecured short-term obligations are rated in the Highest Rating Category
of S&P and of Moody's, or (b) interest-bearing negotiable certificates of
deposit, interest-bearing time deposits or interest-bearing savings
accounts, issued by a Qualified Financial Institution, if such deposits or
accounts are fully insured by the Federal Deposit Insurance Corporation;
(vii) money market mutual funds registered under the Investment
Company Act of 1940 that have been rated "AAAm-G" or "AAAm" by S&P and
"Aaa" by Moody's, provided that the portfolio of such money market mutual
fund is limited to obligations described in (x) paragraph (i) above and to
agreements to repurchase such obligations or (y) paragraphs (ii) or (iii)
above and approved in writing by Xxxxxx Mae; and
(viii) any other investment authorized by the laws of any state if
such investments are approved in writing by Xxxxxx Xxx;
provided that Permitted Investments shall not include the following:
(1) any investments with a final maturity or any agreements with a term
greater than 365 days from the date of the investment (except
(a) obligations that provide for the optional or mandatory tender, at par,
by the holder of such obligations at least once within 365 days of the date
of purchase and (b) agreements or investments listed in paragraphs (vii)
and (viii) above), (2) any obligation (other than obligations described in
paragraphs (i) and (ii) above) with a purchase price greater or less than
the par value of such obligation, (3) mortgage-backed securities, real
estate mortgage investment conduits or collateralized mortgage obligations,
(4) interest-only or principal-only stripped securities, (5) obligations
bearing interest at inverse floating rates, (6) any investment which may be
prepaid or called at a price less than their purchase price prior to stated
maturity, (7) any investment described in paragraph (iv) above with a
Qualified Financial Institution (as defined in clause (d) of the definition
of "Qualified Financial Institution") if the Qualified Financial
Institution does not agree to submit to
23
jurisdiction, venue and service of process in the United States of America
in the repurchase agreement and (8) any investment the interest rate on
which is variable, and is established other than by reference to a single
interest rate index plus a single fixed spread, if any, and which interest
rate moves proportionately with that index; provided further that if any
such investment described in paragraphs (i) through (viii) above is
required to be rated, such rating requirement will not be satisfied if an
"r" highlighter or a "t" highlighter is affixed to its rating or is
otherwise applicable.
"PERMITTED LIENS" means, with respect to a Mortgaged Property, (i) the
Liens shown as exceptions to title to the Mortgaged Property set forth in
the Title Insurance Policy for the Mortgaged Property and approved by the
Lender, (ii) the Security Instrument encumbering the Mortgaged Property and
any other Lien in favor of the Lender, (iii) Liens for taxes, fees,
assessments or other governmental charges which are not delinquent or
remain payable without penalty, (iv) Liens arising solely by virtue of any
statutory or common-law provision relating to banker's liens, rights of
setoff or similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution, provided that such
deposit account is not intended by the depository to provide collateral to
the depository institution, (v) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other similar Liens which are not
delinquent or remain payable without penalty or which are being contested
in good faith and by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the Property subject
thereto, (vi) Liens (other than any Lien imposed by ERISA consisting of
pledges or deposits required in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation, (vii) Liens consisting of judgment or judicial
attachment Liens, provided that the enforcement of such Liens is
effectively stayed or bonded and the existence of the Lien does not
constitute an Event of Default under Section 16.01(n), and (viii) any other
Liens approved by the Lender.
"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).
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of
notice or the passage of time, or both, would constitute an Event of
Default.
"PROHIBITED ACTIVITIES OR CONDITIONS", with respect to a Mortgaged
Property, shall have the meaning given that term in the Security Instrument
encumbering the Mortgaged Property.
"PROPERTY" means any estate or interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or intangible.
24
"QUALIFIED FINANCIAL INSTITUTION" means any of the following having a
senior unsecured debt rating in the Highest Rating Category of S&P and
Moody's, and approved by Xxxxxx Xxx: a (a) bank or trust company organized
under the laws of any state of the United States of America, (b) national
banking association, (c) savings bank, a savings and loan association, or
an insurance company or association chartered or organized under the laws
of any state of the United States of America, (d) federal branch or agency
pursuant to the International Banking Act of 1978 or any successor
provisions of law or a domestic branch or agency of a foreign bank which
branch or agency is duly licensed or authorized to do business under the
laws of any state or territory of the United States of America, (e)
government bond dealer reporting to, trading with, and recognized as a
primary dealer by the Federal Reserve Bank of New York, and (f) securities
dealer approved in writing by Xxxxxx Mae the liquidation of which is
subject to the Securities Investors Protection Corporation or other similar
corporation.
"REAL ESTATE ASSETS" shall have the meaning set forth in Section
856(c)(6)(B) of the Internal Revenue Code and the regulations thereunder.
"REIT" means Apartment Investment and Management Company, a Maryland
corporation.
"REIT GUARANTY" means that certain Guaranty executed by the REIT and
attached as EXHIBIT L to this Agreement.
"REIT SUB" means AIMCO-GP, Inc., a Delaware corporation, AIMCO-LP,
Inc., a Delaware corporation or AIMCO Holdings QRS, Inc., a Delaware
corporation.
"RELEASE FEE" means, with respect to each Mortgaged Property or
Lakehaven Note released from the Collateral Pool pursuant to Article VII, a
fee equal to $15,000.
"RELEASE PRICE" shall have the meaning set forth in Section 7.02(c).
"RENT ROLL" means, with respect to any Multifamily Residential
Property, a rent roll prepared and certified by the owner of the
Multifamily Residential Property, on Xxxxxx Xxx Form 4243, as set forth in
Exhibit III-3 of the DUS Guide, or on another form approved by the Lender
and containing substantially the same information as Form 4243 requires.
"REPLACEMENT RESERVE AGREEMENT" means a Replacement Reserve and
Security Agreement, in the form attached as EXHIBIT M to this Agreement,
and completed in accordance with the requirements of the DUS Guide.
25
"REQUEST" means a Collateral Addition Request, a Collateral Release
Request, a Conversion Request, a Credit Facility Expansion Request, a
Credit Facility Termination Request, a Future Advance Request, an Initial
Advance Request or a Revolving Facility Termination Request, as the context
requires.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the
Person or any of its Property or to which the Person or any of its Property
is subject.
"REVOLVING CREDIT ENDORSEMENT" means an endorsement to a Title
Insurance Policy which contains substantially the same coverages, and is
subject to substantially the same or fewer exceptions (or such other
exceptions as the Lender may approve), as the form attached as EXHIBIT N to
this Agreement.
"REVOLVING FACILITY" means the agreement of the Lender to make
Advances to the Borrower pursuant to Section 2.01(c)(2).
"REVOLVING FACILITY ADVANCE" shall have the meaning set forth in
Section 2.01(c)(2).
"REVOLVING FACILITY AVAILABILITY PERIOD" means the period beginning on
the Revolving Facility Commencement Date and ending on the 90th day before
the Revolving Facility Termination Date.
"REVOLVING FACILITY COMMENCEMENT DATE" means the Initial Closing Date.
"REVOLVING FACILITY CREDIT COMMITMENT" means an amount equal to
$50,000,000, or such greater amount as the Borrower may elect in accordance
with, and subject to, the provisions of Article VIII, or such lesser amount
as the Borrower may elect in accordance with, and subject to, the
provisions of Articles V or IX.
"REVOLVING FACILITY NOTE" means the promissory note, in the form
attached as EXHIBIT O to this Agreement, which has been issued by the
Borrower to the Lender as of the date of this Agreement to evidence the
Borrower's obligation to repay Revolving Facility Advances.
"REVOLVING FACILITY TERMINATION DATE" means the last day of the fifth
Loan Year.
"REVOLVING FACILITY TERMINATION FEE" means, with respect to a
reduction in the Revolving Facility Credit Commitment pursuant to Articles
IX or X which occurs more than
26
180 days before the Revolving Facility Termination Date, an amount equal to
the product obtained by multiplying--
(1) the amount of the reduction in the Revolving Facility Credit
Commitment, by
(2) 22 basis points, by
(3) the present value factor calculated using the following formula:
-n
1 - (1 + r)
-----------
r
[r = Yield Rate
n = the number of years,
and any fraction thereof, remaining between
the date on which the reduction in the
Revolving Facility Credit Commitment actually
closes and the Revolving Facility Termination
Date]
The "Yield Rate" means the yield rate on the 5.50% U.S. Treasury Security
due on January 31, 2003 (the "SPECIFIED U.S. TREASURY SECURITY"), as the
Yield Rate is reported in the WALL STREET JOURNAL on the fifth Business Day
preceding, as applicable,(x) the date of the reduction in the Revolving
Facility Credit Commitment, (y) the date of the Complete Revolving Facility
Termination or (z) the date of Lender's acceleration of the unpaid
principal balance of the Revolving Facility Note. In the event that no
Yield Rate is published for the Specified U.S. Treasury Security, then the
nearest equivalent U.S. Treasury Security shall be selected at Lender's
reasonable discretion. If the publication of such Yield Rates in the WALL
STREET JOURNAL is discontinued, Lender shall determine such Yield Rates
from another source selected by Lender. If the reduction in the Revolving
Facility Credit Commitment occurs on or after the 180th day before the
Revolving Facility Termination Date, the Revolving Facility Termination Fee
shall equal $0.
"SECURITY DOCUMENTS" means the Security Instruments, the Assignment of
Ownership Interests, the Cash Management Agreement, the Lakehaven Note
Pledge Agreements, the Replacement Reserve Agreement and any other
documents executed by an AIMCO Party from time to time to secure any of the
AIMCO Parties' obligations under the Loan Documents.
27
"SECURITY INSTRUMENT" means, for each Mortgaged Property, a separate
Multifamily Mortgage, Deed of Trust or Deed to Secure Debt, Assignment of
Leases and Rents and Security Agreement given by an Owner to or for the
benefit of the Lender to secure the obligations of the Owner under its
Owner Guaranty and under the Loan Documents. With respect to each Initial
Mortgaged Property, the Security Instrument shall be in the form attached
as EXHIBIT P to this Agreement, with changes, to the extent applicable, to
conform the Exhibit to the form Security Instrument prescribed by Xxxxxx
Mae and in effect on December 31, 1997 for use in the State in which the
applicable Mortgaged Property is located. With respect to each Additional
Mortgaged Property, the Security Instrument shall be in a form approved by
the Lender.
"SENIOR MANAGEMENT" means (i) the Chief Executive Officer, Chairman of
the Board, Chief Financial Officer, Chief Operating Officer and President
of the REIT, and (ii) in the event an office described in clause (i) is
vacant or does not exist, any other individuals with responsibility for any
of the functions typically performed in a corporation by the Person
occupying the vacant or non-existent office.
"SINGLE-PURPOSE" means, with respect to a Person which is any form of
partnership or corporation or limited liability company, that such Person
at all times since its formation:
(i) has been a duly formed and existing partnership, corporation
or limited liability company, 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 material respects;
(iv) has observed all customary formalities regarding its
partnership, corporate or limited liability company
existence, as the case may be;
(v) has accurately maintained its financial statements,
accounting records and other partnership, corporate or
limited liability company documents separate from those of
any other Person;
(vi) except with respect to funds in any common account for
Affiliates of the Borrower, has not commingled its assets or
funds with those of any other Person;
28
(vii) has accurately maintained its own bank accounts, payroll (if
applicable), and books and accounts separate from those of
any other Person;
(viii) except with respect to funds in any common account for
Affiliates of the Borrower, has paid its own liabilities
from its own separate assets;
(ix) except through any management agent which manages its
properties, has identified itself in all dealings with the
public under its own name and as a separate and distinct
entity;
(x) except through any management agent which manages its
properties, has not identified itself as being a division or
a part of any other Person;
(xi) except through any management agent which manages its
properties, 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 Credit Facility or 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, including any partner or Affiliate;
(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;
29
(xvii) except through any management agent which manages its
properties, has conducted its own business in its own name;
(xviii) has paid the salaries of its own employees (if any) and
maintained a sufficient number of employees in light of its
contemplated business operations or engaged a management
agent which has maintained a sufficient number of employees
to carry out its contemplated business operations;
(xix) has allocated fairly and reasonably any overhead for shared
office space;
(xx) except for payment of amounts from any common account for
Affiliates of the Borrower, has used separate stationery,
invoices and checks;
(xxi) has not pledged its assets for the benefit of any other
entity or made any loans or advances to any person or
entity;
(xxii) has not engaged in a non-exempt prohibited transaction
described in Section 406 of ERISA or Section 4975 of the
Internal Revenue Code; and
(xxiii) has corrected any known misunderstanding regarding its
separate identity.
"SPECIAL POOL PURCHASE CONTRACT" shall have the meaning set forth in
Section 18.01.
"STANDBY FEE" shall have the meaning set forth in Section 14.01.
"STRATEGIC PLAN" means a written narrative discussing the REIT's and
the Borrower's short and long range plans, including their plans for
operations, mergers, acquisitions and management, and accompanied by
supporting financial projections and schedules.
"SUBSIDIARY" shall have the meaning set forth in Section 13.03(a).
"SURVEYS" means the as-built surveys of the Mortgaged Properties
prepared in accordance with the requirements of Section 113 of the DUS
Guide, or otherwise approved by the Lender.
30
"TERM OF THIS AGREEMENT" shall be determined as provided in Section
20.10 to this Agreement.
"TIE-IN ENDORSEMENT" means an endorsement to a Title Insurance Policy
which contains substantially the same coverages, and is subject to
substantially the same or fewer exceptions (or such other exceptions as the
Lender may approve), as the form attached as EXHIBIT Q to this Agreement.
"TITLE COMPANY" means Xxxxxxx Title Guaranty Company, 0000 Xxxx Xxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
"TITLE INSURANCE POLICIES" means the mortgagee's policies of title
insurance issued by the Title Company from time to time relating to each of
the Security Instruments, conforming to the requirements of Section 111 of
the DUS Guide, together with such endorsements, coinsurance, reinsurance
and direct access agreements with respect to such policies as the Lender
may, from time to time, consider necessary or appropriate, whether or not
required by the DUS Guide, including Revolving Credit Endorsements, if
available, and Tie-In Endorsements, if available, and with a limit of
liability under the policy (subject to the limitations contained in
Sections 6(a)(i) and 6(a)(iii) of the Stipulations and Conditions of the
policy) equal to the following:
(1) For all policies for which a Tie-In Endorsement is
available, an amount equal to 100% of the aggregate Initial Valuations
of all Mortgaged Properties tied-in by the Tie-In Endorsement, except
that if, from time to time, an amount equal to 60% of the then-current
aggregate Valuations of all Mortgaged Properties tied-in by the Tie-In
Endorsement exceeds the limit of liability of the Tie-In Endorsement,
the limit of liability of the Tie-In Endorsement shall be increased to
an amount equal to 75% of the then-current aggregate Valuations of all
Mortgaged Properties tied-in by the Tie-In Endorsement.
(2) For all policies for which a Tie-In Endorsement is not
available, an amount equal to 100% of the Initial Valuation of the
Mortgaged Property, except that if, from time to time, an amount equal
to 60% of the then-current Valuation of the Mortgaged Property exceeds
the limit of liability of the Mortgaged Property, the limit of
liability of the Tie-In Endorsement shall be increased to an amount
equal to 75% of the then-current Valuation of the Mortgaged Property.
(3) Notwithstanding the foregoing, the title insurance for
Mortgaged Properties located in the State of Texas and added to the
Collateral Pool on the same date shall be issued on the same policy,
provided that the cost of title insurance
31
premiums for the unitary policy does not materially exceed the cost of
providing separate policies and, for purposes of applying paragraph
(2) only, such Mortgaged Properties shall be considered one Mortgaged
Property.
"TRAILING 12 MONTH PERIOD" means, for any specified date, the 12 month
period ending with the last day of the most recent calendar quarter for
which financial statements have been delivered by the REIT to the Lender
pursuant to Section 13.01(d)(3) or (4).
"TRAILING THREE MONTH PERIOD" means, for any specified date, the three
month period ending with the last day of the most recent calendar quarter
for which financial statements have been delivered by the REIT to the
Lender pursuant to Section 13.01(d)(3) or (4).
"TRANSFER" means a sale, assignment, pledge, transfer or other
disposition (whether voluntary or by operation of law) of, or the granting
or creating of a Lien in, a Mortgaged Property or any Ownership Interests.
"UNIMPROVED REAL PROPERTY" means real property which is not improved
by one or more buildings leased, or held out for lease, to third parties.
"UNITS" means the units of limited partnership interest in Borrower
issued and outstanding from time to time.
"UNUSED CAPACITY" shall have the meaning set forth in Section 14.01.
"VALUATION" means, for any specified date, with respect to each of the
Mortgaged Properties, (a) if an Appraisal of the Mortgaged Property was
more recently obtained than a Cap Rate for the Mortgaged Property, the
Appraised Value of such Mortgaged Property, or (b) if a Cap Rate for the
Mortgaged Property was more recently obtained than an Appraisal of the
Mortgaged Property, the value derived by dividing--
(i) the Net Operating Income of such Mortgaged Property for the
Trailing 12 Month Period, by
(ii) the most recent Cap Rate selected by the Lender pursuant to
Section 13.04.
Notwithstanding the foregoing, any Valuation for a Mortgaged Property
calculated for a date occurring before the first anniversary of the date on
which the Mortgaged Property is owned by the Owner or another Affiliate of
the REIT shall equal the Appraised Value of such Mortgaged Property, unless
the Lender determines that changed market or property conditions warrant
that the value be determined as set forth in the preceding sentence.
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"VALUATION" means, for any specified date, with respect to each Lakehaven
Note, an amount equal to 90% of the least of--
(i) $7,238,736.00 for the Lakehaven I Note and $16,761,264.00
for the Lakehaven II Note,
(ii) the outstanding principal balance of, and all deferred,
accrued or additional interest, if any, on, the Lakehaven
Note as of the specified date, or
(iii) the quotient obtained by dividing--
(A) the Net Operating Income of the Lakehaven I Property or
the Lakehaven II Property, as applicable, for the
Trailing 12 Month Period, by
(B) the most recent Cap Rate selected by the Lender
pursuant to Section 13.04.
ARTICLE II
THE CREDIT FACILITY
SECTION 2.01. THE CREDIT FACILITY.
SECTION 2.01(a) ESTABLISHMENT OF THE CREDIT FACILITY. The Lender
hereby establishes the Credit Facility, which shall be comprised of the
Base Facility and the Revolving Facility.
SECTION 2.01(b) ESTABLISHMENT OF THE BASE FACILITY.
SECTION 2.01(b)(1) ESTABLISHMENT. The Lender hereby establishes
the Base Facility, upon all of the terms of this Agreement.
SECTION 2.01(b)(2) BASE FACILITY CREDIT COMMITMENT. Subject to
the terms, conditions and limitations of this Agreement, the Lender
agrees, from time to time during the Base Facility Availability
Period, after delivery of a Request for an Advance from the Borrower,
to make one or more Advances to the Borrower in accordance with
Section 4.01. Each Advance made to the Borrower pursuant to this
subsection (b)(2) shall be referred to as a "BASE FACILITY ADVANCE."
The Borrower
33
may not re-borrow any part of the Base Facility Advance which it has
previously borrowed and repaid.
SECTION 2.01(c) ESTABLISHMENT OF REVOLVING FACILITY.
SECTION 2.01(c)(1) ESTABLISHMENT. The Lender hereby establishes
the Revolving Facility, upon all of the terms of this Agreement.
SECTION 2.01(c)(2) REVOLVING FACILITY CREDIT COMMITMENT.
Subject to the terms, conditions and limitations of this Agreement,
the Lender agrees, from time to time during the Revolving Facility
Availability Period, after delivery of a Request for an Advance from
the Borrower, to make Advances to the Borrower in accordance with
Section 4.01. Each Advance made to the Borrower pursuant to this
subsection (c)(2) shall be referred to as a "REVOLVING FACILITY
ADVANCE." Subject to the terms, conditions and limitations of this
Agreement, the Borrower may re-borrow any amounts under the Revolving
Facility which it has previously borrowed and repaid under the
Revolving Facility.
SECTION 2.02. LIMITATIONS ON COMMITMENT TO MAKE ADVANCES.
SECTION 2.02(a) LIMITATIONS ON BASE FACILITY CREDIT COMMITMENT. The
Lender's obligations to make Base Facility Advances pursuant to Section
2.01(b)(2) are subject to the following limitations:
SECTION 2.02(a)(1) TERM. The Lender shall not be obligated to
make any Base Facility Advances at any time after the expiration of
the Base Facility Availability Period.
SECTION 2.02(a)(2) BASE FACILITY CREDIT COMMITMENT. The sum of
the aggregate amount of Base Facility Advances Outstanding at any time
shall not exceed the Base Facility Credit Commitment.
SECTION 2.02(a)(3) MATURITY DATE OF BASE FACILITY ADVANCES. The
maturity date of each Base Facility Advance shall be a date selected
by the Borrower, which date shall be (i) no earlier than the tenth
anniversary of the date on which the Base Facility Advance is made and
(ii) no later than the 20th anniversary of the date on which the Base
Facility Advance is made, but in no event later than the last day of
the 25th Loan Year.
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SECTION 2.02(a)(4) AMORTIZATION OF BASE FACILITY ADVANCE. The
principal of each Base Facility Advance shall be amortized over the
Amortization Period selected by the Borrower in its Request for the
Base Facility Advance, such that level monthly installments of
principal and interest (at the Coupon Rate for the Base Facility
Advance) shall fully amortize the original principal balance of the
Base Facility Advance over the selected Amortization Period. If the
maturity date of the Base Facility Advance is prior the expiration of
the Amortization Period, the Borrower shall be required to make a
balloon payment of the outstanding principal balance of the Base
Facility Advance on the maturity date of the Base Facility Advance.
SECTION 2.02(b) LIMITATIONS ON REVOLVING FACILITY CREDIT COMMITMENT.
The Lender's obligations to make Revolving Facility Advances pursuant to
Section 2.01(c)(2) are subject to the following limitations:
SECTION 2.02(b)(1) TERM. The Lender shall not be obligated to
make any Revolving Facility Advances at any time after the expiration
of the Revolving Facility Availability Period.
SECTION 2.02(b)(2) REVOLVING FACILITY CREDIT COMMITMENT. The
aggregate amount of Revolving Facility Advances Outstanding at any
time shall not exceed the Revolving Facility Credit Commitment.
SECTION 2.02(b)(3) MATURITY DATE OF REVOLVING FACILITY ADVANCES.
Regardless of the date on which a Revolving Facility Advance is made,
the maturity date of each Revolving Facility Advance shall be a date
selected by the Borrower in its Request for the Revolving Facility
Advance, which date shall occur--
(a) on or after the date which completes three full months
after the Closing Date for such Revolving Facility
Advance;
(b) on or before the date which completes nine full months
after the Closing Date for such Revolving Facility
Advance; and
(c) on the last day of a calendar month.
For these purposes, the year shall be deemed to consist of 12 30-day
months. For example, the date which completes three full months after
September 15 shall be December 15; the date which completes three full
months after November 30 shall be February 28, etc.
35
SECTION 2.02(b)(4) PAYMENT OF DISCOUNT AND FEE PORTION. The
Lender shall not be obligated to make any Revolving Facility Advance
unless the Borrower pays to the Lender, in advance, the Fee Portion
for the Revolving Facility Advance allocable to the first full
calendar month of the MBS backed by the Revolving Facility Advance and
the entire Discount for the Revolving Facility Advance. After the
issuance of such a Revolving Facility Advance, the Fee Portion for the
Revolving Facility Advance shall be payable monthly, in advance, on
the first Business Day of the second full calendar month of the MBS
backed by the Revolving Facility Advance, and on the first Business
Day of each calendar month thereafter until the maturity of the MBS,
in accordance with the terms of the Revolving Facility Note.
SECTION 2.02(c) LIMITATIONS ON ANY ADVANCE. The Lender's obligations
to make any Advance are subject to the following additional limitations:
SECTION 2.02(c)(1) MAXIMUM CREDIT COMMITMENT. The sum of the
aggregate amount of Base Facility Advances Outstanding and Revolving
Facility Advances Outstanding at any time shall not exceed the Maximum
Credit Commitment.
SECTION 2.02(c)(2) MINIMUM REQUEST. Each Future Advance Request
shall be in the minimum amount of $5,000,000.
SECTION 2.02(c)(3) SATISFACTION OF CONDITIONS PRECEDENT. All
conditions precedent set forth in Section 4.02 to the making of any
Future Advance must be satisfied on or before the applicable Closing
Date and, within seven days after the date on which the Future Advance
Request is made, the Borrower shall have delivered to the Lender each
of the items described in Sections 4.02(b) and 4.02(c), and Articles
XI(a) and XI(h).
SECTION 2.03. DETERMINATION AND CONFIRMATION OF INTEREST RATE AND OTHER
TERMS OF EACH ADVANCE. The interest rate applicable to each Base Facility
Advance and the imputed interest rate applicable to each Revolving Facility
Advance (the "COUPON RATE" for the Advance) and the other terms of the Advance
shall be determined in accordance with the following procedure:
SECTION 2.03(a) QUOTE. From time to time, at the Borrower's request,
with respect to a proposed Advance, the Lender shall quote to the Borrower
an estimate of the MBS Pass-Through Rate (for a proposed Base Facility
Advance) or MBS Imputed Interest Rate (for a proposed Revolving Facility
Advance) for a Xxxxxx Xxx MBS backed by the proposed Advance. The Lender's
quote shall be based on (i) a solicitation of bids from institutional
36
investors selected by the Lender and (ii) the proposed terms and amount of
the Advance selected by the Borrower. The quote shall not be binding upon
the Lender.
SECTION 2.03(b) RATE SETTING. If the Borrower satisfies all of the
conditions to the Lender's obligation to make the Advance requested in the
Request for the Advance delivered to the Lender, then the Borrower may
propose a MBS Pass-Through Rate (for a Base Facility Advance) or MBS
Imputed Interest Rate (for a Revolving Facility Advance) by submitting to
the Lender by facsimile transmission a completed and executed document, in
the form attached as EXHIBIT R-1 OR R-2 to this Agreement, as applicable
(the "RATE SETTING FORM"), before 1:00 p.m. Washington, D.C. time on any
Business Day on which the Lender is open for business (the "RATE SETTING
DATE"). The Rate Setting Form (i) contains various factual certifications
required by the Lender and (ii) specifies the amount, term, MBS Issue Date,
Fee Spread, Coupon Rate (the "MAXIMUM ANNUAL COUPON RATE"), Discount (if
the Advance is a Revolving Facility Advance), Price (which, for a Base
Facility Advance, will be in a range between 99-1/2 and 100-1/2), Yield
Maintenance Period (if the Advance is a Base Facility Advance), the
Specified U.S. Treasury Security (if the Advance is a Base Facility
Advance), Amortization Period (if the Advance is a Base Facility Advance)
and Closing Date for the Advance.
SECTION 2.03(c) RATE CONFIRMATION. Within one Business Day after
receipt of the completed and executed Rate Setting Form, the Lender shall
solicit bids from institutional investors selected by the Lender based on
the information in the Rate Setting Form and, provided the actual Coupon
Rate (if such bid were accepted) would be at or below the Maximum Annual
Coupon Rate, shall obtain a commitment (the "MBS COMMITMENT") for the
purchase of a Xxxxxx Mae MBS having the bid terms described in the related
Rate Setting Form (which bid terms shall be from the bidder with the lowest
MBS Pass-Through Rate or the lowest MBS Imputed Interest Rate, as
applicable), and shall immediately deliver to the Borrower by facsimile
transmission a completed document, in the form attached as EXHIBIT S-1 OR
S-2 to this Agreement, as applicable (the "RATE CONFIRMATION FORM")
confirming the amount, term, MBS Issue Date, MBS Delivery Date, MBS
Pass-Through Rate (if the Advance is a Base Facility Advance), MBS Imputed
Interest Rate (if the Advance is a Revolving Facility Advance), Fee Spread,
Coupon Rate, Discount (if the Advance is a Revolving Facility Advance),
Price, Yield Maintenance Period (if the Advance is a Base Facility
Advance), Specified U.S. Treasury Security (if the Advance is a Base
Facility Advance), Amortization Period (if the Advance is a Base Facility
Advance) and Closing Date for the Advance. The term "MBS PASS-THROUGH
RATE" means, for a specified Xxxxxx Xxx MBS backed by a Base Facility
Advance, the interest rate per annum (rounded to three places) payable
for the Xxxxxx Mae MBS pursuant to the MBS Commitment. The term
"MBS IMPUTED INTEREST RATE" means, for a specified Xxxxxx Xxx
MBS backed by a Revolving Facility Advance, the imputed interest
rate per annum (rounded to three places)
37
which the specified Xxxxxx Mae MBS will bear based on the MBS Commitment.
The MBS Imputed Interest Rate shall be calculated in accordance with the
following formula:
1/2
12 [ 6 ( 1 + [ 365 (1 - P) ] / (2 PT) - 1 ) ]
where, P = PRICE
T = TERM (DAYS)
EXHIBIT T to this Agreement contains an example of the foregoing formula.
SECTION 2.03(d) COUPON RATE.
SECTION 2.03(d)(1) REVOLVING FACILITY ADVANCES-GENERAL. Except
as otherwise provided in paragraphs (3) and (4), the Coupon Rate for a
Revolving Facility Advance shall equal the sum of (i) the MBS Imputed
Interest Rate for the Revolving Facility Advance, and (ii) 50 basis
points.
SECTION 2.03(d)(2) BASE FACILITY ADVANCES-GENERAL. Except as
otherwise provided in paragraph (3), the Coupon Rate for any Base
Facility Advance shall equal the sum of (i) the MBS Pass-Through Rate
for the Base Facility Advance, and (ii) a number of basis points
determined by the Lender at the time of the increase in the Base
Facility Credit Commitment to which the Base Facility Advance is
allocable, but in no event more than 50 basis points.
SECTION 2.03(d)(3) INCREASE IN MAXIMUM CREDIT COMMITMENT. In
the event the Base Facility Credit Commitment or the Revolving
Facility Credit Commitment increases pursuant to an increase in the
Maximum Credit Commitment under Article VIII, the Coupon Rate for any
Base Facility Advance or Revolving Facility Advance which is allocable
to the increase shall equal the sum of (i) the MBS Pass-Through Rate
(with respect to any Base Facility Advance) or the MBS Imputed
Interest Rate (with respect to any Revolving Facility Advance), and
(ii) the following:
(A) if the increase in the Maximum Credit Commitment
is made in accordance with Article VIII, and the Closing
Date for the Credit Facility Expansion Request for the
increase in the Maximum
38
Credit Commitment occurs prior to the end of the first Loan
Year, a number of basis points determined by the Lender at
the time of the increase in the Maximum Credit Commitment,
but in no event more than 50 basis points; and
(B) in all other cases, a number of basis points
determined by the Lender at the time of the increase in the
Maximum Credit Commitment.
In any case in which the Lender shall determine the number of basis
points, the Lender shall make its determination in good faith using
the then-current pricing methodology for the Xxxxxx Xxx product line
under which this Credit Facility is sponsored (or, if there is no
longer such product line, then in accordance with the pricing
methodology in effect when the product line was terminated). The
Lender's identification and application of the applicable methodology
shall be conclusive for all purposes, and, absent manifest error, the
Lender's determination of the number of basis points based on such
identification and application shall also be conclusive for all
purposes.
SECTION 2.03(d)(4) PARTIAL MONTH INTEREST. Notwithstanding
anything to the contrary in this Agreement, if an Advance is not made
on the first day of a calendar month, and the MBS Issue Date for the
MBS backed by the Advance is the first day of the month following the
month in which the Advance is made, the Coupon Rate for the Advance
for the partial month period commencing on the Closing Date for the
Advance and ending on the last day of the calendar month in which the
Closing Date occurs shall be the greater of (i) the Coupon Rate for
the Advance which will be in effect for the period after the partial
month period or (ii) a rate based on the Lender's cost of funds, as
quoted by the Lender's regular warehouse lender, and approved in
advance, in writing, by the Borrower.
SECTION 2.03(e) ADVANCE CONFIRMATION INSTRUMENT. On or before the
Closing Date for a Revolving Facility Advance, the Borrower shall execute
and deliver to the Lender an instrument (the "ADVANCE CONFIRMATION
INSTRUMENT"), in the form attached as EXHIBIT U to this Agreement,
confirming the amount, term, MBS Issue Date, MBS Delivery Date, MBS Imputed
Interest Rate, Fee Spread, Coupon Rate, Discount, Price and Closing Date
for the Advance, and the Borrower's obligation to repay the Advance in
accordance with the terms of the Notes and this Agreement. Upon the
funding of the Revolving Facility Advance, the Lender shall note the date
of funding in the appropriate space at the foot of the Advance Confirmation
Instrument and deliver a copy of the completed Advance Confirmation
Instrument to the Borrower.
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ARTICLE III
INITIAL ADVANCE
SECTION 3.01. REQUEST. The Borrower hereby makes a request (the "INITIAL
ADVANCE REQUEST") for the Lender to make the Initial Advance. If all conditions
contained in Section 3.02 are satisfied, on or before the Initial Closing Date,
the Lender shall make the Initial Advance on the Initial Closing Date, or on
another date selected by the Borrower and approved by the Lender.
SECTION 3.02. CONDITIONS PRECEDENT TO INITIAL ADVANCE. The obligation of
the Lender to make the Initial Advance is subject to the following conditions
precedent:
(a) The delivery to the Title Company, for filing and/or recording in
all applicable jurisdictions, of all applicable Loan Documents required by
the Lender, including duly executed and delivered original copies of the
Initial Security Instruments and UCC-1 Financing Statements covering the
portion of the Collateral comprised of personal property, and other
appropriate instruments, in form and substance satisfactory to the Lender
and in form proper for recordation, as may be necessary in the opinion of
the Lender to perfect the Liens created by the applicable Initial Security
Instruments and any other Loan Documents creating a Lien in favor of the
Lender, and the payment of all taxes, fees and other charges payable in
connection with such execution, delivery, recording and filing; and
(b) The satisfaction of all General Conditions set forth in Article
XI.
ARTICLE IV
FUTURE ADVANCES
SECTION 4.01. PROCEDURE FOR OBTAINING FUTURE ADVANCES.
SECTION 4.01(a) REQUEST. In order to obtain a Future Advance, the
Borrower may from time to time deliver a written request for a Future
Advance (a "FUTURE ADVANCE REQUEST") to the Lender, in the form attached as
EXHIBIT V-1 OR V-2 to this Agreement, as applicable. Each Future Advance
Request shall be accompanied by (and no Future Advance Request shall be
effective unless it is accompanied by) the following:
(i) a designation of the amount of the Future Advance requested; and
40
(ii) a designation of the maturity date of the Advance.
SECTION 4.01(b) CLOSING. If all conditions contained in Section
4.02 are satisfied, and the Lender has delivered the Rate Confirmation Form
to the Borrower, the Lender shall make the Future Advance requested in the
Future Advance Request, at a closing to be held at offices designated by
the Lender on a Closing Date selected by the Lender, and occurring not more
than three Business Days after the Lender's receipt of the Future Advance
Request and the Borrower's receipt of the Rate Confirmation Form.
SECTION 4.02. CONDITIONS PRECEDENT TO FUTURE ADVANCES. The obligation of
the Lender to make Future Advances is subject to the satisfaction of the
following conditions precedent:
(a) With respect to any Future Advances, after giving effect to the
requested Future Advance:
(i) the Aggregate Debt Service Coverage Ratio for the
Trailing 12 Month Period is not less than the Minimum Aggregate
Debt Service Coverage Ratio for the Trailing Twelve Month Period;
(ii) the Aggregate Debt Service Coverage Ratio for the
Trailing Three Month Period is not less than the Minimum
Aggregate Debt Service Coverage Ratio for the Trailing Three
Month Period;
(iii) the Aggregate Loan to Value Ratio for the Trailing 12
Month Period is not greater than the Maximum Aggregate Loan to
Value Ratio for the Trailing 12 Month Period;
(b) If the Advance is a Base Facility Advance, delivery of a Base
Facility Note, duly executed by the Borrower, in the amount of the Advance,
reflecting all of the terms of the Base Facility Advance;
(c) If the Advance is a Revolving Facility Advance, delivery of the
Advance Confirmation Instrument, duly executed by the Borrower;
(d) For any Title Insurance Policy not containing a Revolving Credit
Endorsement, the receipt by the Lender of an endorsement to the Title
Insurance Policy, amending the effective date of the Title Insurance Policy
to the Closing Date and showing no additional exceptions to coverage other
than the exceptions shown on the Initial Closing Date and other exceptions
approved by the Lender; and
(e) The satisfaction of all General Conditions set forth in Article
XI.
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ARTICLE V
CONVERSION OF REVOLVING FACILITY CREDIT COMMITMENT
TO BASE FACILITY CREDIT COMMITMENT
SECTION 5.01. RIGHT TO CONVERT. Subject to the terms, conditions and
limitations set forth in this Article, the Borrower shall have the right, at any
time or from time to time during the Base Facility Availability Period, to
convert all or a portion of the Revolving Facility Credit Commitment to the Base
Facility Credit Commitment, in which event the Revolving Facility Credit
Commitment shall be reduced by, and the Base Facility Credit Commitment shall be
increased by, the amount of the conversion.
SECTION 5.02. PROCEDURE FOR OBTAINING CONVERSION.
SECTION 5.02(a) REQUEST. In order to obtain a conversion of all or a
portion of the Revolving Facility Credit Commitment to the Base Facility
Credit Commitment, the Borrower may from time to time deliver a written
request for a conversion (a "CONVERSION REQUEST") to the Lender, in the
form attached as EXHIBIT W to this Agreement. Each Conversion Request
shall be accompanied by (and no Conversion Request shall be effective
unless it is accompanied by) the following:
(i) A designation of the amount of the conversion; and
(ii) A designation of any Revolving Facility Advances
Outstanding which will be paid on the Closing Date for the conversion.
SECTION 5.02(b) CLOSING. If none of the limitations contained in
Section 5.03 is violated, and all conditions contained in Section 5.04 are
satisfied, the Lender shall permit the requested conversion, at a closing
to be held at offices designated by the Lender on a Closing Date selected
by the Lender, and occurring within 15 Business Days after the Lender's
receipt of the Conversion Request (or on such other date to which the
Borrower and the Lender may agree), by executing and delivering, all at the
sole cost and expense of the Borrower, an amendment to this Agreement, in
the form attached as EXHIBIT X to this Agreement, together with an
amendment to each Security Document, if determined by the Lender to be
necessary, and other applicable Loan Documents, in form and substance
satisfactory to the Lender, reflecting the change in the Base Facility
Credit Commitment and the Revolving Facility Credit Commitment. The
documents and instruments referred to in the preceding sentence are
referred to in this Article as the "CONVERSION DOCUMENTS."
42
SECTION 5.03. LIMITATIONS ON RIGHT TO CONVERT. The right of the Borrower
to convert all or a portion of the Revolving Facility Credit Commitment to the
Base Facility Credit Commitment is subject to the following limitations:
SECTION 5.03(a) CLOSING DATE. The Closing Date shall occur on
or before the expiration of the Base Facility Availability Period.
SECTION 5.03(b) MINIMUM REQUEST. Each Request for a conversion
shall be in the minimum amount of $5,000,000.
SECTION 5.03(c) OBLIGATION TO PREPAY REVOLVING FACILITY
ADVANCES. If, after the conversion, the aggregate amount of all
Revolving Facility Advances Outstanding will exceed the Revolving
Facility Credit Commitment, the Borrower shall be obligated to prepay,
on or before the Closing Date for the conversion, an amount of
Revolving Facility Advances Outstanding which is at least equal to the
amount of the excess.
SECTION 5.04. CONDITIONS PRECEDENT TO CONVERSION. The right of the
Borrower to convert all or a portion of the Revolving Facility Credit Commitment
to the Base Facility Credit Commitment and the obligation of the Lender to
deliver the Conversion Documents on the Closing Date are subject to the
satisfaction of the following conditions precedent on or before the Closing
Date:
(a) after giving effect to the requested conversion:
(i) the Aggregate Debt Service Coverage Ratio for the
Trailing 12 Month Period is not less than the Minimum Aggregate
Debt Service Coverage Ratio for the Trailing 12 Month Period;
(ii) the Aggregate Debt Service Coverage Ratio for the
Trailing Three Month Period is not less than the Minimum
Aggregate Debt Service Coverage Ratio for the Trailing Three
Month Period; and
(iii) the Aggregate Loan to Value Ratio for the Trailing 12
Month Period is not greater than the Maximum Aggregate Loan to
Value Ratio for the Trailing 12 Month Period.
(b) Payment by the Borrower in full of any Revolving Facility
Advances Outstanding which the Borrower is obligated to pay under Section
5.03(c);
43
(c) If requested by the Lender, the receipt by the Lender of an
endorsement to each Title Insurance Policy, amending the effective date of
the Title Insurance Policy to the Closing Date and showing no additional
exceptions to coverage other than the exceptions shown on the Initial
Closing Date and other exceptions approved by the Lender;
(d) Receipt by the Lender of one or more counterparts of each
Conversion Document, dated as of the Closing Date, signed by each of the
parties (other than the Lender) who is a party to such Conversion Document;
and
(e) The satisfaction of all General Conditions set forth in Article
XI.
SECTION 5.05. INTEREST RATE OF BASE FACILITY ADVANCES AFTER CONVERSION.
The Coupon Rate for any Base Facility Advance shall equal the rate set forth in
Section 2.03(d)(2) or 2.03(d)(3), as the case may be.
ARTICLE VI
ADDITIONS OF COLLATERAL
SECTION 6.01. RIGHT TO ADD COLLATERAL. Subject to the terms and
conditions of this Article, the Borrower shall have the right, from time to time
during the Term of this Agreement, to add Multifamily Residential Properties to
the Collateral Pool in accordance with the provisions of this Article.
SECTION 6.02. PROCEDURE FOR ADDING COLLATERAL.
SECTION 6.02(a) REQUEST. In order to add a Multifamily Residential
Property or Multifamily Residential Properties to the Collateral Pool, the
Borrower may, not more than once each calendar quarter, deliver a written
request (the "COLLATERAL ADDITION REQUEST") to the Lender, in the form
attached as EXHIBIT Y to this Agreement, to add one or more Additional
Mortgaged Properties to the Collateral Pool. Each Collateral Addition
Request shall be accompanied by (and no Collateral Addition Request shall
be effective unless it is accompanied by) the following:
(i) The information relating to the proposed Additional Mortgaged
Property required by the form attached as EXHIBIT Z to this Agreement (the
"COLLATERAL ADDITION DESCRIPTION PACKAGE"), as amended from time to time to
include information required under the DUS Guide; and
44
(ii) The payment of all Additional Collateral Due Diligence Fees
pursuant to Section 14.04(b).
SECTION 6.02(b) ADDITIONAL INFORMATION. The Borrower shall promptly
deliver to the Lender any additional information concerning the proposed
Additional Mortgaged Property that the Lender may from time to time
reasonably request.
SECTION 6.02(c) UNDERWRITING. The Lender shall evaluate the proposed
Additional Mortgaged Property, and shall make underwriting determinations
as to the Aggregate Debt Service Coverage Ratios and the Aggregate Loan to
Value Ratio for the Trailing 12 Month Period applicable to the Collateral
Pool, on the basis of Valuations made with respect to the proposed
Additional Mortgaged Property, and otherwise in accordance with Xxxxxx
Mae's DUS Underwriting Requirements. Within 30 days after receipt of (i)
the Collateral Addition Request for the Additional Mortgaged Property and
(ii) all reports, certificates and documents set forth on EXHIBIT AA to
this Agreement, the Lender shall notify the Borrower whether or not it
shall consent to the addition of the proposed Additional Mortgaged Property
to the Collateral Pool and, if it shall so consent, shall set forth the
Aggregate Debt Service Coverage Ratios and the Aggregate Loan to Value
Ratio for the Trailing 12 Month Period which it estimates shall result from
the addition of the proposed Additional Mortgaged Property to the
Collateral Pool and the amount of any increase in the amount of Advances
Outstanding which the Borrower can borrow as a result of the addition of
the Additional Mortgaged Property to the Collateral Pool (assuming, for
these purposes, that the Borrower elected to increase the Maximum Credit
Commitment, if necessary, so that it could borrow the maximum amount
supported by the Collateral Pool, whether or not Borrower has in fact so
increased, or requested an increase of, the Maximum Credit Commitment). If
the Lender declines to consent to the addition of the proposed Additional
Mortgaged Property to the Collateral Pool, the Lender shall include, in its
notice, a brief statement of the reasons for doing so. Within five
Business Days after receipt of the Lender's notice that it shall consent to
the addition of the proposed Additional Mortgaged Property to the
Collateral Pool, the Borrower shall notify the Lender whether or not it
elects to cause the proposed Additional Mortgaged Property to be added to
the Collateral Pool. If the Borrower fails to respond within the period of
five Business Days, it shall be conclusively deemed to have elected not to
cause the proposed Additional Mortgaged Property to be added to the
Collateral Pool.
SECTION 6.02(d) CLOSING. If, pursuant to subsection (c), the
Lender consents to the addition of the proposed Additional Mortgaged
Property to the Collateral Pool, the Borrower timely elects to cause the
proposed Additional Mortgaged Property to be added to the Collateral Pool
and all conditions contained in Section 6.03 are satisfied, the Lender
shall permit the proposed Additional Mortgaged Property to be added to the
Collateral Pool, at a closing to be held at offices designated by the
Lender on a Closing Date selected by the
45
Lender, and occurring within five Business Days after the Lender's receipt
of the Borrower's election (or on such other date to which the Borrower and
the Lender may agree).
SECTION 6.03. CONDITIONS PRECEDENT TO ADDITION OF AN ADDITIONAL MORTGAGED
PROPERTY TO THE COLLATERAL POOL. The right of the Borrower to add an Additional
Mortgaged Property to the Collateral Pool on the Closing Date applicable to the
Additional Mortgaged Property is subject to the satisfaction of the following
conditions precedent on or before the Closing Date:
(a) On the Closing Date for the addition of the
Additional Mortgaged Property to the Collateral Pool:
(i) the Aggregate Debt Service Coverage Ratio for the Trailing
12 Month Period is not less than the Minimum Aggregate Debt Service
Coverage Ratio for the Trailing 12 Month Period;
(ii) the Aggregate Debt Service Coverage Ratio for the Trailing
Three Month Period is not less than the Minimum Aggregate Debt Service
Coverage Ratio for the Trailing Three Month Period; and
(iii) the Aggregate Loan to Value Ratio for the Trailing 12
Month Period is not greater than the Maximum Aggregate Loan to Value
Ratio for the Trailing 12 Month Period.
(b) The payment by the Borrower of the Collateral Addition Fee;
(c) The delivery to the Title Company, with fully executed
instructions directing the Title Company to file and/or record in all
applicable jurisdictions on or before the Closing Date, all applicable
Collateral Addition Loan Documents required by the Lender, including duly
executed and delivered original copies of any Security Instruments and
UCC-1 Financing Statements covering the portion of the Additional Mortgaged
Property comprised of personal property, and other appropriate documents,
all in form and substance substantially the same as the Loan Documents
relating to the Initial Mortgaged Properties (except to the extent required
by the Lender to conform to then-existing requirements for such documents
prescribed by Xxxxxx Mae) and in form proper for recordation, as may be
necessary in the opinion of the Lender to perfect the Lien created by the
applicable additional Security Instrument, and any other Collateral
Addition Loan Document creating a Lien in favor of the Lender, and the
payment of all taxes, fees and other charges payable in connection with
such execution, delivery, recording and filing;
46
(d) If required by the Lender, amendments to the Notes and the
Security Documents, reflecting the addition of the Additional Mortgaged
Property to the Collateral Pool and, as to any Security Instrument so
amended, the receipt by the Lender of an endorsement to the Title Insurance
Policy insuring the Security Instrument (other than a Title Insurance
Policy for Mortgaged Properties located in Texas or Florida, unless the
same can be obtained at nominal cost), either (i) amending the effective
date of the Title Insurance Policy to the Closing Date and showing no
additional exceptions to coverage other than the exceptions shown on the
Initial Closing Date and other exceptions approved by the Lender or (ii)
insuring the Lender that the amendment to the Security Instrument has not
invalidated the Title Insurance Policy;
(e) If the Title Insurance Policy for the Additional Mortgaged
Property contains a Tie-In Endorsement, an endorsement to each other Title
Insurance Policy containing a Tie-In Endorsement, adding a reference to the
Additional Mortgaged Property; and
(f) The satisfaction of all General Conditions set forth in Article
XI.
SECTION 6.04. OTHER TYPES OF COLLATERAL. The Borrower may propose to add
to the Collateral Pool additional Collateral other than Multifamily Residential
Properties, but the Lender shall not be obligated to accept any type of
additional Collateral other than Multifamily Residential Properties, and any
acceptance of Collateral other than Multifamily Residential Properties shall be
upon such conditions as the Lender may determine. Notwithstanding the
foregoing, the Lender shall accept Substituted Cash Collateral in accordance
with Section 7.02(d).
ARTICLE VII
RELEASES OF COLLATERAL
SECTION 7.01. RIGHT TO OBTAIN RELEASES OF COLLATERAL. Subject to the
terms and conditions of this Article, the Borrower shall have the right to
obtain a release of Collateral from the Collateral Pool in accordance with the
provisions of this Article.
SECTION 7.02. PROCEDURE FOR OBTAINING RELEASES OF COLLATERAL.
SECTION 7.02(a) REQUEST. In order to obtain a release of Collateral
from the Collateral Pool, the Borrower may, not more than once each
calendar quarter, deliver a written request for the release of the
Collateral from the Collateral Pool (the "COLLATERAL RELEASE REQUEST") to
the Lender, in the form attached as EXHIBIT BB to this Agreement. The
Collateral Release Request shall not result in a termination of all or any
part of the Credit
47
Facility. The Borrower may only terminate all or any part of the Credit
Facility by delivering a Revolving Facility Termination Request or Credit
Facility Termination Request pursuant to Articles IX or X. The Collateral
Release Request shall be accompanied by (and the Collateral Release Request
shall not be effective unless it is accompanied by) a designation of the
Collateral to be released from the Collateral Pool, including, if the
Collateral to be released is a Mortgaged Property, the name, address and
location of the Mortgaged Property (the "COLLATERAL RELEASE PROPERTY").
SECTION 7.02(b) CLOSING. If all conditions contained in Section 7.03
are satisfied, the Lender shall cause the Collateral Release Property to be
released from the Collateral Pool, at a closing to be held at offices
designated by the Lender on a Closing Date selected by the Lender, and
occurring within 10 Business Days after the Lender's receipt of the
Collateral Release Request (or on such other date to which the Borrower and
the Lender may agree), by executing and delivering, and causing all
applicable parties to execute and deliver, all at the sole cost and expense
of the Borrower, (i) instruments, in the form customarily used by the
Lender for releases in the jurisdiction governing the perfection of the
security interest being released, releasing the applicable Security
Instrument as a Lien on the Collateral Release Property, and Termination
Statements terminating the UCC-1 Financing Statements perfecting a Lien on
the portion of the Collateral Release Property comprised of personal
property, and such other documents and instruments as the Borrower may
reasonably request evidencing the release of the applicable Collateral from
any lien securing the Obligations (including a termination of any
restriction on the use of any accounts relating to the Collateral Release
Property) and the release and return to the applicable Owner of any and all
escrowed amounts relating thereto, (ii) instruments releasing the security
interest in the Ownership Interests in the Owner of the Collateral Release
Property and (iii) instruments releasing the Owner who owns the Collateral
Release Property from its obligations under this Agreement, the Owner
Guaranty it has executed and any and all other Loan Documents. The
instruments referred to in the preceding sentence are referred to in this
Article as the "COLLATERAL RELEASE DOCUMENTS."
SECTION 7.02(c) RELEASE PRICE. The "RELEASE PRICE" for each
Mortgaged Property means the minimum amount, if any, of Advances
Outstanding which are required to be repaid by the Borrower to the Lender
in connection with the proposed release of the Mortgaged Property, a
Lakehaven Note or other Collateral from the Collateral Pool, so that,
immediately after the release--
(i) the Aggregate Debt Service Coverage Ratio for the Trailing
12 Month Period is not less than the Minimum Aggregate Debt Service
Coverage Ratio for the Trailing 12 Month Period;
48
(ii) the Aggregate Debt Service Coverage Ratio for the Trailing
Three Month Period is not less than the Minimum Aggregate Debt Service
Coverage Ratio for the Trailing Three Month Period; and
(iii) the Aggregate Loan to Value Ratio for the Trailing 12
Month Period is not greater than the Maximum Aggregate Loan to Value
Ratio for the Trailing 12 Month Period.
In addition to the Release Price, the Borrower shall pay to the Lender all
associated prepayment premiums and other amounts due under the Notes and
any Advance Confirmation Instruments evidencing the Advances being repaid.
SECTION 7.02(d) APPLICATION OF RELEASE PRICE. The Release Price shall
be applied against the Revolving Facility Advances Outstanding until there
are no further Revolving Facility Advances Outstanding, and thereafter
shall be held by the Lender (or its appointed collateral agent) as
substituted Collateral ("SUBSTITUTED CASH COLLATERAL") in accordance with a
security agreement and other documents in form and substance acceptable to
the Lender (or, at the Borrower's option, may be applied against the
prepayment of Base Facility Advances, so long as the prepayment is
permitted under the Base Facility Note for the Base Facility Advance). Any
portion of the Release Price held as Substituted Cash Collateral may be
released if, immediately after giving effect to the release, each of the
conditions set forth in Section 7.03(a) below shall have been satisfied.
If, on the date on which the Borrower pays the Release Price, Revolving
Facility Advances are Outstanding but are not then due and payable, the
Lender shall hold the payments as additional Collateral for the Credit
Facility, until the next date on which Revolving Facility Advances are due
and payable, at which time the Lender shall apply the amounts held by it to
the amounts of the Revolving Facility Advances due and payable.
SECTION 7.03. CONDITIONS PRECEDENT TO RELEASE OF COLLATERAL RELEASE
PROPERTY FROM THE COLLATERAL. The right of the Borrower to obtain a release of
a Collateral Release Property from the Collateral Pool and the obligation of the
Lender to release a Collateral Release Property from the Collateral Pool by
executing and delivering the Collateral Release Documents on the Closing Date,
are subject to the satisfaction of the following conditions precedent on or
before the Closing Date:
(a) Immediately after giving effect to the requested release:
(i) the Aggregate Debt Service Coverage Ratio for the Trailing 12
Month Period is not less than the Minimum Aggregate Debt Service
Coverage Ratio for the Trailing 12 Month Period;
49
(ii) the Aggregate Debt Service Coverage Ratio for the Trailing
Three Month Period is not less than the Minimum Aggregate Debt Service
Coverage Ratio for the Trailing Three Month Period; and
(iii) the Aggregate Loan to Value Ratio for the Trailing 12 Month
Period is not greater than the Maximum Aggregate Loan to Value Ratio
for the Trailing 12 Month Period.
(b) Payment of the Release Price for the Collateral Release Property;
(c) Payment of the Release Fee for the Collateral Release Property;
(d) Receipt by the Lender on the Closing Date of one or more
counterparts of each Collateral Release Document, dated as of the Closing
Date, signed by each of the parties (other than the Lender) who is a party
to such Collateral Release Document;
(e) If required by the Lender, amendments to the Notes and the
Security Documents, reflecting the release of the Collateral Release
Property from the Collateral Pool and, as to any Security Instrument so
amended, the receipt by the Lender of an endorsement to the Title Insurance
Policy insuring the Security Instrument (other than a Title Insurance
Policy for Mortgaged Properties located in Texas or Florida, unless the
same can be obtained at nominal cost), either (i) amending the effective
date of the Title Insurance Policy to the Closing Date and showing no
additional exceptions to coverage other than the exceptions shown on the
Initial Closing Date and other exceptions approved by the Lender or (ii)
insuring the Lender that the amendment to the Security Instrument has not
invalidated the Title Insurance Policy;
(f) If the Lender determines the Collateral Release Property to be
one phase of a project, and one or more other phases of the project are
Mortgaged Properties which will remain in the Collateral Pool (the
"REMAINING MORTGAGED PROPERTIES"), the Lender's determination that the
Remaining Mortgaged Properties can be operated separately from the
Collateral Release Property and any other phases of the project which are
not Mortgaged Properties. In making this determination, the Lender shall
evaluate whether the Remaining Mortgaged Properties comply with the terms
of Sections 203 and 208 of the DUS Guide, which, as of the date of this
Agreement, require, among other things, that a phase which constitutes
collateral for a loan made in accordance with the terms of the DUS Guide
(i) have adequate ingress and egress to existing public roadways, either by
location of the phase on a dedicated, all-weather road or by access to such
a road by means of a satisfactory easement, (ii) have access which is
sufficiently attractive and direct from major thoroughfares to be conducive
to continued good marketing, (iii) have a location which is not (A)
inferior to
50
other phases, (B) such that inadequate maintenance of other phases would
have a significant negative impact on the phase, and (C) such that the
phase is visible only after passing through the other phases of the project
and (iv) comply with such other issues as are dictated by prudent practice;
(g) Receipt by the Lender of endorsements to the Tie-In Endorsements
of the Title Insurance Policies, if deemed necessary by the Lender, to
reflect the release;
(h) Receipt by the Lender on the Closing Date of a writing, dated as
of the Closing Date, signed by the AIMCO Parties, in the form attached as
EXHIBIT CC to this Agreement, pursuant to which the AIMCO Parties confirm
that their obligations under the Loan Documents are not adversely affected
by the release of the Collateral Release Property from the Collateral;
(i) The remaining Mortgaged Properties in the Collateral Pool shall
satisfy the then-existing Geographical Diversification Requirements;
(j) Immediately after giving effect to the requested release, the
aggregate Valuations of the Lakehaven Notes shall not exceed 25% of the
aggregate Valuations of all Mortgaged Properties and the Lakehaven Notes;
and
(k) The satisfaction of all General Conditions set forth in Article
XI.
ARTICLE VIII
EXPANSION OF CREDIT FACILITY
SECTION 8.01. RIGHT TO INCREASE MAXIMUM CREDIT COMMITMENT. Subject to the
terms, conditions and limitations of this Article, the Borrower shall have the
right, at any time or from time to time prior to the end of the Revolving
Facility Availability Period, to increase the Maximum Credit Commitment. In the
event the Maximum Credit Commitment increases pursuant to this Article, the Base
Facility Credit Commitment or the Revolving Facility Credit Commitment, or both,
shall increase by amounts selected by the Borrower pursuant to Section 8.02,
provided that the sum of increases, if any, in both collectively shall equal the
amount of the increase in the Maximum Credit Commitment.
SECTION 8.02. PROCEDURE FOR OBTAINING INCREASES IN MAXIMUM CREDIT
COMMITMENT.
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SECTION 8.02(a) REQUEST. In order to obtain an increase in the
Maximum Credit Commitment, the Borrower may from time to time deliver a
written request for an increase (a "CREDIT FACILITY EXPANSION REQUEST") to
the Lender, in the form attached as EXHIBIT DD to this Agreement. Each
Credit Facility Expansion Request shall include the following information:
(i) A designation of the amount of the proposed increase;
(ii) A designation of the increase in the Base Facility Credit
Commitment and the Revolving Facility Credit Commitment; and
(iii) A request that the Lender inform the Borrower of any change
in the Geographical Diversification Requirements.
SECTION 8.02(b) CLOSING. If none of the limitations contained in
Section 8.03 is violated, and all conditions contained in Section 8.04 are
satisfied, the Lender shall permit the requested increase in the Maximum
Credit Commitment, at a closing to be held at offices designated by the
Lender on a Closing Date selected by the Lender, and occurring within 15
Business Days after the Lender's receipt of the Credit Facility Expansion
Request (or on such other date to which the Borrower and the Lender may
agree).
SECTION 8.03. LIMITATIONS ON RIGHT TO INCREASE MAXIMUM CREDIT COMMITMENT.
The Borrower's right to increase the Maximum Credit Commitment is subject to the
following limitations:
SECTION 8.03(1) MAXIMUM CREDIT COMMITMENT. After giving effect
to the proposed increase, the Maximum Credit Commitment shall not
exceed $250,000,000.
SECTION 8.03(2) MINIMUM REQUEST. Each Request for an increase
in the Maximum Credit Commitment shall be in the minimum amount of
$25,000,000.
SECTION 8.04. CONDITIONS PRECEDENT TO INCREASE IN MAXIMUM CREDIT
COMMITMENT. The right of the Borrower to increase the Maximum Credit Commitment
is subject to the written approval of the Lender and Xxxxxx Xxx, which approval
may be withheld in the Lender's or Xxxxxx Mae's sole and absolute discretion.
52
SECTION 8.05. INTEREST RATE OF ADVANCES AFTER INCREASE IN MAXIMUM CREDIT
COMMITMENT. In the event the Base Facility Credit Commitment or the Revolving
Facility Credit Commitment increases pursuant to an increase in the Maximum
Credit Commitment under this Article, the Coupon Rate for any Base Facility
Advance or Revolving Facility Advance which is allocable to the increase shall
equal the rate set forth in Section 2.03(d)(3).
ARTICLE IX
COMPLETE OR PARTIAL TERMINATION OF REVOLVING FACILITY
SECTION 9.01. RIGHT TO COMPLETE OR PARTIAL TERMINATION OF REVOLVING
FACILITY. Subject to the terms and conditions of this Article, the Borrower
shall have the right to permanently reduce the Revolving Credit Facility
Commitment in accordance with the provisions of this Article.
SECTION 9.02. PROCEDURE FOR COMPLETE OR PARTIAL TERMINATION OF REVOLVING
FACILITY.
SECTION 9.02(a) REQUEST. In order to permanently reduce the
Revolving Facility Credit Commitment, the Borrower may deliver a written
request for the reduction (the "REVOLVING FACILITY TERMINATION REQUEST") to
the Lender, in the form attached as EXHIBIT EE to this Agreement. A
permanent reduction of the Revolving Facility Credit Commitment to $0 shall
be referred to as a "COMPLETE REVOLVING FACILITY TERMINATION." The
Revolving Facility Termination Request shall include the following
information:
(i) A designation of the proposed amount of the reduction in
the Revolving Facility Credit Commitment; and
(ii) Unless there is a Complete Revolving Facility Termination, a
designation by the Borrower of any Revolving Facility Advances which
will be prepaid.
Any release of Collateral, whether or not made in connection with a
Revolving Facility Termination Request, must comply with all conditions to
a release which are set forth in Article VII.
SECTION 9.02(b) CLOSING. If all conditions contained in Section 9.03
are satisfied, the Lender shall permit the Revolving Facility Credit
Commitment to be reduced to the amount designated by the Borrower, at a
closing to be held at offices designated by the Lender on a Closing Date
selected by the Lender, within 15 Business Days after the Lender's receipt
of the Revolving Facility Termination Request (or on such other date to
which the
53
Borrower and the Lender may agree), by executing and delivering a
counterpart of an amendment to this Agreement, in the form attached as
EXHIBIT FF to this Agreement, evidencing the reduction in the Revolving
Facility Credit Commitment. The document referred to in the preceding
sentence is referred to in this Article as the "REVOLVING FACILITY
TERMINATION DOCUMENT."
SECTION 9.03. CONDITIONS PRECEDENT TO COMPLETE OR PARTIAL TERMINATION OF
REVOLVING FACILITY. The right of the Borrower to reduce the Revolving Facility
Credit Commitment and the obligation of the Lender to execute the Revolving
Facility Termination Document, are subject to the satisfaction of the following
conditions precedent as of the Closing Date:
(a) Payment by the Borrower in full of all of the Revolving Facility
Advances Outstanding required to be paid in order that the aggregate amount
of all Revolving Facility Advances Outstanding is not greater than the
Revolving Facility Credit Commitment, including any associated prepayment
premiums or other amounts due under the Notes (but if the Borrower is not
required to prepay all of the Revolving Facility Advances, the Borrower
shall have the right to select which of the Revolving Facility Advances
shall be repaid);
(b) Payment by the Borrower of the Revolving Facility Termination
Fee;
(c) Receipt by the Lender of one or more counterparts of the
Revolving Facility Termination Document, dated as of the Closing Date,
signed by each of the parties (other than the Lender) who is a party to
such Revolving Facility Termination Document; and
(d) The satisfaction of all General Conditions set forth in Article
XI.
SECTION 9.04. COMPLETE TERMINATION OF REVOLVING FACILITY UPON EXPIRATION
OF REVOLVING FACILITY. If there has not occurred a Complete Revolving Facility
Termination before the Revolving Facility Termination Date, then, as of the
Revolving Facility Termination Date, the Revolving Facility shall automatically
terminate, without satisfaction of any conditions by the Borrower or the Lender
and without the execution of any further documents.
ARTICLE X
TERMINATION OF CREDIT FACILITY
SECTION 10.01. RIGHT TO TERMINATE CREDIT FACILITY. Subject to the terms
and conditions of this Article, the Borrower shall have the right to terminate
this Agreement and the Credit Facility
54
and receive a release of all of the Collateral from the Collateral Pool in
accordance with the provisions of this Article.
SECTION 10.02. PROCEDURE FOR TERMINATING CREDIT FACILITY.
SECTION 10.02(a) REQUEST. In order to terminate this Agreement and
the Credit Facility, the Borrower may deliver a written request for the
termination (the "CREDIT FACILITY TERMINATION REQUEST") to the Lender, in
the form attached as EXHIBIT GG to this Agreement.
SECTION 10.02(b) CLOSING. If all conditions contained in Section
10.03 are satisfied, this Agreement shall terminate, and the Lender shall
cause all of the Collateral to be released from the Collateral Pool, at a
closing to be held at offices designated by the Lender on a Closing Date
selected by the Lender, within 15 Business Days after the Lender's receipt
of the Credit Facility Termination Request (or on such other date to which
the Borrower and the Lender may agree), by executing and delivering, and
causing all applicable parties to execute and deliver, all at the sole cost
and expense of the Borrower, (i) instruments, in the form customarily used
by the Lender for releases in the jurisdictions in which the Mortgaged
Properties are located, releasing (A) all of the Security Instruments as a
Lien on the Mortgaged Properties and (B) all of the other Collateral,(ii)
Termination Statements terminating all of the UCC-1 Financing Statements
filed by the Lender with respect to the Collateral, in the form customarily
used in the jurisdiction governing the perfection of the security interest
being released, (iii) such other documents and instruments as the Borrower
may reasonably request evidencing the release of the Collateral from any
lien securing the Obligations (including a termination of any restriction
on the use of any accounts relating to the Collateral) and the release and
return to the applicable Owner of any and all escrowed amounts relating
thereto, (iv) instruments releasing the security interest in the Ownership
Interests in the Owners, (v) instruments releasing each of the Owners from
its obligations under this Agreement, the Owner Guaranty it has executed
and any and all other Loan Documents and (vi) the Notes, each marked paid
and cancelled. The instruments referred to in the preceding sentence are
referred to in this Article as the "FACILITY TERMINATION DOCUMENTS."
SECTION 10.03. CONDITIONS PRECEDENT TO TERMINATION OF CREDIT FACILITY. The
right of the Borrower to terminate this Agreement and the Credit Facility and to
receive a release of all of the Collateral from the Collateral Pool and the
Lender's obligation to execute and deliver the Facility Termination Documents on
the Closing Date are subject to the satisfaction of the following conditions
precedent as of the Closing Date:
(a) Payment by the Borrower in full of all of the Notes Outstanding
on the Closing Date, including any associated prepayment premiums or other
amounts due under the Notes;
55
(b) Payment of the Credit Facility Termination Fee; and
(c) The satisfaction of the General Conditions set forth in Article
XI(a) and XI(d).
ARTICLE XI
GENERAL CONDITIONS PRECEDENT TO ALL REQUESTS
The obligation of the Lender to close the transaction requested in a
Request shall be subject to the following conditions precedent (the "GENERAL
CONDITIONS") in addition to any other conditions precedent set forth in this
Agreement:
(a) PAYMENT OF EXPENSES. The payment by the Borrower of the Lender's
fees and expenses payable in accordance with this Agreement for which the
Lender has presented an invoice on or before the Closing Date for the
Request;
(b) NO MATERIAL ADVERSE CHANGE. There has been no material adverse
change in the financial condition, business or prospects of the Borrower,
the REIT or their respective Subsidiaries, taken as a whole, since the
Initial Closing Date (or, with respect to the conditions precedent to the
Initial Advance, from the condition, business or prospects of the Borrower,
the REIT or their respective Subsidiaries, taken as a whole, reflected in
the financial statements, reports and other information obtained by the
Lender during its review of the AIMCO Parties and the Initial Mortgaged
Properties and Lakehaven Notes and Lakehaven Properties);
(c) NO DEFAULT. There shall exist no Event of Default or Potential
Event of Default on the Closing Date for the Request and, after giving
effect to the transaction requested in the Request, no Event of Default or
Potential Event of Default shall have occurred;
(d) NO INSOLVENCY. No AIMCO Party shall be insolvent (within the
meaning of any applicable federal or state laws relating to bankruptcy or
fraudulent transfers) or will be rendered insolvent by the transactions
contemplated by the Loan Documents, including the making of a Future
Advance, or, after giving effect to such transactions, will be left with an
unreasonably small capital with which to engage in its business or
undertakings, or will have intended to incur, or believe that it has
incurred, debts beyond its ability to pay such debts as they mature or will
have intended to hinder, delay or defraud any existing or future creditor
(and the AIMCO Parties shall provide such information in their possession
as the Lender may request concerning the matters in this subsection (d));
56
(e) NO UNTRUE STATEMENTS. The Loan Documents shall not contain any
untrue or misleading statement of a material fact and shall not fail to
state a material fact necessary in order to make the information contained
therein not misleading;
(f) REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by any AIMCO Party in the Loan Documents shall be true and
correct in all material respects on the Closing Date for the Request with
the same force and effect as if such representations and warranties had
been made on and as of the Closing Date for the Request;
(g) NO CONDEMNATION OR CASUALTY. There shall not have occurred, and
there shall not be pending or threatened, any condemnation or other taking,
whether direct or indirect, against any Mortgaged Property or the Lakehaven
Properties and there shall not have occurred any casualty to any
improvements located on any Mortgaged Property or the Lakehaven Properties,
if the condemnation or casualty will have a Material Adverse Effect upon
the REIT, the Borrower and their respective Subsidiaries, taken as a whole;
(h) DELIVERY OF CLOSING DOCUMENTS. The receipt by the Lender of the
following, each dated as of the Closing Date for the Request, in form and
substance satisfactory to the Lender in all respects:
(1) A Compliance Certificate;
(2) An Organizational Certificate; and
(3) With respect to any Request other than a Future Advance
Request, such other documents, instruments, approvals (and,
if requested by the Lender, certified duplicates of
executed copies thereof) and opinions as the Lender may
request;
(i) DELIVERY OF CLOSING DOCUMENTS RELATING TO INITIAL ADVANCE
REQUEST, COLLATERAL ADDITION REQUEST OR CREDIT FACILITY EXPANSION REQUEST.
With respect to the closing of the Initial Advance Request, a Collateral
Addition Request, or a Credit Facility Expansion Request, the receipt by
the Lender of the following, each dated as of the Closing Date for the
Request, in form and substance satisfactory to the Lender in all respects:
(1) Fully executed original copies of each Loan Document required to
be executed in connection with the Request, duly executed and
delivered by the parties thereto (other than the Lender), each of
which shall be in full force and effect; and
57
(2) Favorable opinions of counsel to the AIMCO Parties, as to the due
organization and qualification of the AIMCO Parties, the due
authorization, execution, delivery and enforceability of each Loan
Document executed in connection with the Request and such other
matters as the Lender may require.
(j) DELIVERY OF PROPERTY-RELATED DOCUMENTS. With respect to each of
the Mortgaged Properties to be made part of the Collateral Pool on the
Closing Date for the Collateral Addition Request, the receipt by the Lender
of the following, each dated as of the Closing Date for the Collateral
Addition Request, in form and substance satisfactory to the Lender in all
respects:
(1) A favorable opinion of local counsel to the AIMCO Parties or the
Lender as to the enforceability of the Security Document, and any
other Loan Documents, executed in connection with the Request;
(2) A commitment for the Title Insurance Policy applicable to the
Mortgaged Property and a pro forma Title Insurance Policy based on the
Commitment;
(3) The Insurance Policy applicable to the Mortgaged Property;
(4) The Survey applicable to the Mortgaged Property;
(5) Evidence of Compliance with Property Laws applicable to the
Mortgaged Property;
(6) An Appraisal of the Mortgaged Property;
(7) A Replacement Reserve Agreement providing for the establishment
of a replacement reserve account for the Mortgaged Property, to be
pledged to the Lender, in which the Owner shall (unless waived by the
Lender) periodically deposit amounts for replacements for improvements
at the Mortgaged Property and as additional security for the AIMCO
Parties' obligations under the Loan Documents;
(8) If required by the Lender, a Completion/Repair and Security
Agreement with respect to the Mortgaged Property in a form
substantially identical to the Completion/Repair and Security
Agreement executed by the Initial Owners;
(9) An Assignment of Management Agreement in a form substantially
identical to the Assignment of Management Agreement executed by the
Initial Owners on the Initial Closing Date;
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(10) An Operations and Maintenance Agreement in a form substantially
identical to that executed by the Initial Owners on the Initial
Closing Date, and including the O&M Plan for the Mortgaged Property,
if the Lender determines an Operations and Maintenance Plan to be
necessary or desirable;
(11) With respect to a Collateral Addition Request, an amendment to
the Cash Management Agreement executed by the Initial Owners and the
Borrower on the Initial Closing Date, adding the Owner as a party and
adding a Property Account for the Mortgaged Property; and
(12) An Assignment of Leases and Rents, if the Lender determines one
to be necessary or desirable, provided that the provisions of any such
assignment shall be substantively identical to those in the Security
Instrument covering the Collateral, with such modifications as may be
necessitated by applicable state or local law.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES
SECTION 12.01. REPRESENTATIONS AND WARRANTIES OF THE AIMCO PARTIES. Each
AIMCO Party hereby represents and warrants to the Lender, with respect to
itself, as follows:
SECTION 12.01(a) DUE ORGANIZATION; OWNERSHIP STRUCTURE.
(1) The REIT is qualified to transact business and is in good
standing in the State of Maryland and each other AIMCO Party
is qualified to transact business and is in good standing in
the State of Delaware. Each AIMCO Party is also qualified
to transact business and is in good standing 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 the
AIMCO Party to perform, the Obligations under this Agreement
and the other Loan Documents. Each Owner of a Mortgaged
Property is qualified to transact business and is in good
standing in the State in which the Mortgaged Property is
located.
(2) The AIMCO Party's principal place of business, principal
office and office where it keeps its books and records as to
the Collateral is
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located at its Notice Address, except that the property
accounting records are kept in its offices in Indianapolis,
Indiana.
SECTION 12.01(b) POWER AND AUTHORITY. The AIMCO Party 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 Loan
Documents and (ii) to execute and deliver this Agreement and the other Loan
Documents and to carry out the transactions contemplated by this Agreement
and the other Loan Documents.
SECTION 12.01(c) DUE AUTHORIZATION. The execution, delivery and
performance of this Agreement and the other Loan Documents have been duly
authorized by all necessary action and proceedings by or on behalf of the
AIMCO Party, 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 the AIMCO Party as a condition to the valid execution,
delivery and performance by the AIMCO Party of this Agreement or any of the
other Loan Documents.
SECTION 12.01(d) VALID AND BINDING OBLIGATIONS. This Agreement and
the other Loan Documents have been duly authorized, executed and delivered
by the AIMCO Party and constitute the legal, valid and binding obligations
of the AIMCO Party, enforceable against the AIMCO Party 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.
SECTION 12.01(e) NON-CONTRAVENTION; NO LIENS. Neither the execution
and delivery of this Agreement and the other Loan Documents, nor the
fulfillment of or compliance with the terms and conditions of this
Agreement and the other Loan Documents nor the payment of the Obligations:
(1) 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 the AIMCO Party, any of the Mortgaged Properties or any
other portion of the Collateral or other assets of the AIMCO
Party, or any judgment or order applicable to the AIMCO Party or
to which the AIMCO Party, any of the Mortgaged Properties or
other assets of the AIMCO Party are subject, except for such
breaches or violations that, singly or in the aggregate, have not
had, and are not reasonably expected to cause, a Material Adverse
Effect upon any AIMCO Party;
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(2) 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 the AIMCO Party's Organizational
Documents, any indenture, existing agreement or other instrument
to which the AIMCO Party is a party or to which the AIMCO Party,
any of the Mortgaged Properties or any other portion of the
Collateral or other assets of the AIMCO Party are subject;
(3) does or will result in or require the creation of any Lien on all
or any portion of the Collateral or any of the Mortgaged
Properties, except for the Permitted Liens; or
(4) does or will require the consent or approval of any creditor of
the AIMCO Party, any Governmental Authority or any other Person
except such consents or approvals which have already been
obtained.
SECTION 12.01(f) PENDING LITIGATION OR OTHER PROCEEDINGS. Except as
set forth in any filings by the REIT with the Securities and Exchange
Commission, there is no pending or, to the best knowledge of the AIMCO
Party, 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 Mortgaged Property or any
other portion of the Collateral or other assets of the AIMCO Party, which,
if decided adversely to the AIMCO Party, would have, or may reasonably be
expected to have, a Material Adverse Effect upon any AIMCO Party. The
AIMCO Party is not in default with respect to any order of any Governmental
Authority.
SECTION 12.01(g) SOLVENCY. The AIMCO Party is not insolvent and will
not be rendered insolvent by the transactions contemplated by this
Agreement or the other Loan Documents and after giving effect to such
transactions, the AIMCO Party will not be left with an unreasonably small
amount of capital with which to engage in its business or undertakings, nor
will the AIMCO Party have incurred, have intended to incur, or believe that
it has incurred, debts beyond its ability to pay such debts as they mature.
The AIMCO Party 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 the AIMCO Party's knowledge, threatened
bankruptcy, reorganization, receivership, insolvency or like proceeding,
whether voluntary or involuntary, affecting the AIMCO Party or any of the
Mortgaged Properties and (ii) has been no assertion or exercise of
jurisdiction over the AIMCO Party or any of the Mortgaged Properties by any
court empowered to exercise bankruptcy powers.
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SECTION 12.01(h) RATIOS. As of the date hereof, the Aggregate Debt
Service Coverage Ratio for the Trailing 12 Month Period ending on the
Initial Closing Date is not less than 145%, and the Aggregate Loan to Value
Ratio for the Trailing 12 Month Period is not greater than 60%.
SECTION 12.01(i) NO CONTRACTUAL DEFAULTS. There are no defaults by
the AIMCO Party or, to the knowledge of the AIMCO Party, by any other
Person under any contract to which the AIMCO Party is a party relating to
any Mortgaged Property, including any management, rental, service, supply,
security, maintenance or similar contract, that would permit the
termination of such contract. No AIMCO Party and, to the knowledge of the
AIMCO Party, no 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 Mortgaged Property.
SECTION 12.01(j) COMPLIANCE WITH THE LOAN DOCUMENTS. The AIMCO Party
is in compliance with all provisions of the Loan Documents to which it is a
party or by which it is bound. The representations and warranties made by
the AIMCO Party in the Loan Documents are true, complete and correct as of
the 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.
SECTION 12.01(k) ERISA. The AIMCO Party is 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 the AIMCO Party 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.
SECTION 12.01(l) FINANCIAL INFORMATION. The financial projections
relating to the AIMCO Party and delivered to the Lender on or prior to the
date hereof, if any, were prepared on the basis of assumptions believed by
the AIMCO Party, in good faith at the time of preparation, to be reasonable
and the AIMCO Party is not aware of any fact or 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 the AIMCO Party which have been
furnished to the Lender are complete and accurate in all material respects
and present fairly the financial condition of the AIMCO Party, as of its
date in accordance with GAAP, 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 upon the REIT,
the Borrower and their respective Subsidiaries, taken as a
62
whole, and there has not been any material transaction entered into by the
AIMCO Party other than transactions in the ordinary course of business.
The AIMCO Party has no material Contingent Obligations which are not
otherwise disclosed in its most recent financial statements.
SECTION 12.01(m) ACCURACY OF INFORMATION. No information, statement
or report furnished in writing to the Lender by the AIMCO Party in
connection with this Agreement or any other Loan Document or in connection
with the consummation of the transactions contemplated hereby and thereby
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 the AIMCO Party and the statements,
information and descriptions contained in the AIMCO Party's closing
certificates, as of the 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 the AIMCO Party delivered as of the
Closing Date are reasonable and based on the best information available to
the AIMCO Party.
SECTION 12.01(n) 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 or any other Loan Document
or the performance of the terms and provisions hereof or thereof by the
AIMCO Party.
SECTION 12.01(o) GOVERNMENTAL ORDERS. The AIMCO Party 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, if successful, could reasonably be expected
to lead to the issuance of any such order.
SECTION 12.01(p) NO RELIANCE. The AIMCO Party acknowledges,
represents and warrants that it understands the nature and structure of the
transactions contemplated by this Agreement and the other Loan Documents,
that it is familiar with the provisions of all of the documents and
instruments relating to such transactions; that it understands the risks
inherent in such transactions, including the risk of loss of all or any of
the Mortgaged Properties; and that it has not relied on the Lender or
Xxxxxx Xxx for any guidance or expertise in analyzing the financial or
other consequences of the transactions contemplated by this Agreement or
63
any other Loan Document or otherwise relied on the Lender or Xxxxxx Mae in
any manner in connection with interpreting, entering into or otherwise in
connection with this Agreement, any other Loan Document or any of the
matters contemplated hereby or thereby.
SECTION 12.01(q) COMPLIANCE WITH APPLICABLE LAW. The AIMCO Party 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 upon any AIMCO Party.
SECTION 12.01(r) CONTRACTS WITH AFFILIATES. Except as otherwise
approved in writing by the Lender, the AIMCO Party has not entered into and
is not a party to any contract, lease or other agreement with any Affiliate
of the AIMCO Party for the provision of any service, materials or supplies
to any Mortgaged Property(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). The Lender hereby approves the property management agreements
set forth on EXHIBIT HH to this Agreement.
SECTION 12.01(s) LINES OF BUSINESS. The AIMCO Party is not engaged
in any businesses which would cause a breach of its covenants in Section
13.02(o).
SECTION 12.01(t) STATUS AS A REAL ESTATE INVESTMENT TRUST. The REIT
currently qualifies, and is taxed as, a real estate investment trust under
Subchapter M of the Internal Revenue Code, and is not engaged in any
activities which would jeopardize such qualification and tax treatment.
SECTION 12.01(u) YEAR 2000 COMPLIANCE. The Borrower has conducted a
comprehensive review and assessment of its computer systems and
applications and made inquiry of Borrower's key suppliers and vendors with
respect to the so-called "year 2000 problem" (the risk that computer
applications may not be able to properly perform date-sensitive functions
after December 31, 1999) and, based on that review and inquiry, Borrower
does not believe that the "year 2000 problem" will result in a material
adverse change in the ability of Borrower and its Subsidiaries to manage
and operate their properties and pay and perform their obligations
hereunder.
SECTION 12.02. REPRESENTATIONS AND WARRANTIES OF THE OWNERS. Each Owner
hereby represents and warrants to the Lender, with respect to itself, as
follows:
SECTION 12.02(a) TITLE. Each Owner has good, valid, marketable and
indefeasible title to each Mortgaged Property (either in fee simple or as
tenant under a ground lease
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meeting all of the requirements of the DUS Guide), free and clear of all
Liens whatsoever except the Permitted Liens. Each Security Instrument, 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
Mortgaged Property intended to be encumbered thereby (including the Leases
of such Mortgaged 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 Mortgaged Property which are or may be prior to, subordinate
to, or of equal priority with, the Liens created by the Loan Documents.
The Permitted Liens do not have, and may not reasonably be expected to
have, a Material Adverse Effect upon any AIMCO Party.
SECTION 12.02(b) TAXES. Each Owner has filed all property and
similar tax returns required to have been filed by it with respect to each
Mortgaged 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 that would otherwise be delinquent, and all other material
Impositions imposed against, affecting or relating to each Mortgaged
Property other than those which have not become delinquent, together with
any fine, penalty, interest or cost for nonpayment pursuant to such returns
or pursuant to any assessment received by it. Each AIMCO Party has no
knowledge of any new proposed tax, levy or other governmental or private
assessment or charge in respect of any Mortgaged Property which has not
been disclosed in writing to the Lender.
SECTION 12.02(c) ZONING. Each Mortgaged Property complies in all
material respects with all Applicable Laws affecting such Mortgaged
Property. Without limiting the foregoing, all material Permits, including
certificates of occupancy, have been issued and are in full force and
effect. Neither the Owner nor, to the knowledge of the Owner, any former
owner of any Mortgaged Property, has received any written notification or
written threat of any actions or proceedings regarding the noncompliance or
nonconformity of any Mortgaged Property with any Applicable Laws or
Permits, nor is the Owner otherwise aware of any such pending actions or
proceedings.
SECTION 12.02(d) LIABILITY FOR HAZARDOUS SUBSTANCES. Except as
disclosed in any Environmental Report delivered to the Lender prior to the
date on which the Owner's Mortgaged Property is added to the Collateral
Pool, or otherwise disclosed in writing by the Owner to the Lender prior to
such date, the Owner of the Mortgaged Property does not have any knowledge
of any liability, contingent or otherwise, in connection with any Hazardous
Substance Activity on or affecting any Mortgaged Property in violation of
Hazardous Materials Laws.
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SECTION 12.02(e) PROHIBITED ACTIVITIES OR CONDITIONS. Except as
disclosed in any Environmental Report delivered to the Lender prior to the
date on which the Owner's Property is added to the Collateral Pool, or
otherwise disclosed in writing by the Owner to the Lender prior to such
date, (i) to the best knowledge of the Owner, no Prohibited Activities or
Conditions exist or have existed at, upon, under or within the Mortgaged
Property that have not been remedied and (ii) no AIMCO Party has at any
time caused or permitted any Prohibited Activities or Conditions to exist
at, upon, under or within the Mortgaged Property.
SECTION 12.02(f) HAZARDOUS MATERIALS LAWS. Except as disclosed in
any Environmental Report delivered to the Lender prior to the date of on
which the Owner's Mortgaged Property is added to the Collateral Pool, or
otherwise disclosed in writing by the Owner to the Lender prior to such
date, (i) no AIMCO Party nor, to the knowledge of the Owner, no other
party, has been or is involved in operations at any Mortgaged Property
which operations could reasonably be expected to lead to (x) the imposition
of liability on an AIMCO Party under any Hazardous Materials Law in effect
as of the date of this Agreement, or on any subsequent or former owner of
the Mortgaged Property, or (y) the creation of a Lien with respect to a
liability on the Mortgaged Property under any Hazardous Materials Law in
effect as of the date hereof; (ii) no AIMCO Party and, to the best
knowledge of the Owner, no predecessor-in-interest with respect to the
Mortgaged Property has permitted any tenant or occupant of the Mortgaged
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 any AIMCO Party or on any
other subsequent or former owner of the Mortgaged Property; and (iii) no
AIMCO Party has received, and the Owner has no knowledge of the issuance
of, any claim, citation or notice of any Governmental Actions.
SECTION 12.02(g) LEASES. Each Owner has delivered to the Lender a
true and correct copy of its form apartment lease for the Mortgaged
Property which it owns, and each Lease with respect to such Mortgaged
Property is in the form thereof, with no material modifications thereto,
except as previously disclosed in writing to the Lender. Except as set
forth in a Rent Roll, no Lease for any unit in any Mortgaged 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
the 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.
SECTION 12.02(h) RENT ROLL. Each Owner has executed and delivered to
the Lender, on behalf of the Lender, a Rent Roll for each Mortgaged
Property, each dated as of and delivered within 60 days prior to the
Initial Closing Date. Each Rent Roll sets forth each
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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 Effect upon the REIT, the Borrower or their respective
Subsidiaries, taken as a whole, resulting from a change in the information
shown on any Rent Roll from the date of each such Rent Roll to the Initial
Closing Date. Except as disclosed in the Rent Roll with respect to each
Mortgaged Property or otherwise previously disclosed in writing to the
Lender, no Lease is in effect as of the date of the Rent Roll with respect
to such Mortgaged Property.
SECTION 12.02(i) 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, each Owner is the owner and holder of the
landlord's interest under each of the Leases of units in each Mortgaged
Property owned by the Owner and there are no prior outstanding assignments
of the Owner's interest in 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.
SECTION 12.02(j) ENFORCEABILITY OF LEASES. Each Lease constitutes
the legal, valid and binding obligation of the Owner and, to the knowledge
of the 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
the Lender, no notice of any default by the Owner which remains uncured has
been sent by any tenant under any such Lease.
SECTION 12.02(k) 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, 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
Mortgaged Property.
SECTION 12.02(l) INSURANCE. Each Owner has delivered to the Lender
true and correct certified copies of all policies of insurance currently in
effect as of the date of this Agreement with respect to the Mortgaged
Property which it owns. Each such insurance policy complies in all
material respects with the requirements set forth in the Loan Documents.
SECTION 12.02(m) TAX PARCELS. Each Mortgaged 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.
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SECTION 12.02(n) ENCROACHMENTS. Except as disclosed on the survey
with respect to each Mortgaged Property, none of the improvements located
on any Mortgaged Property encroaches upon the property of any other Person
nor lies outside of the boundaries and building restriction lines of such
Mortgaged Property and no improvement located on property adjoining such
Mortgaged Property lies within the boundaries of or in any way encroaches
upon such Mortgaged Property.
SECTION 12.02(o) INDEPENDENT UNIT. Except for Permitted Liens and as
disclosed on EXHIBIT II to this Agreement, each Mortgaged Property is an
independent unit which does not rely on any drainage, sewer, access,
parking, structural or other facilities located on any Mortgaged Property
not included in such Mortgaged 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 Mortgaged
Property, (ii) structural support, or (iii) the fulfillment of the
requirements of any Lease or other agreement affecting such Mortgaged
Property. Each 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
Mortgaged Property. All public utilities are installed and operating at
each Mortgaged Property and all billed installation and connection charges
have been paid in full. Each Mortgaged Property is either (x) contiguous
to or (y) benefits from an irrevocable unsubordinated easement permitting
access from such Mortgaged 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 Mortgaged Property relies on
any part of the Mortgaged Property to fulfill any zoning requirements,
building code or other requirement of any Governmental Authority that has
jurisdiction over the Mortgaged Property for structural support or to
furnish to such building or improvement any essential building systems or
utilities.
SECTION 12.02(p) CONDITION OF THE MORTGAGED PROPERTIES. Except as
disclosed in any third party report delivered to the Lender prior to the
date on which the Owner's Mortgaged Property is added to the Collateral
Pool, or otherwise disclosed in writing by the Owner to the Lender prior to
such date, each Mortgaged Property is in good condition, order and repair,
subject to ordinary wear and tear, there exists no structural or other
material defects in such Mortgaged Property, whether latent or otherwise,
and the Owner has not received notice from any insurance company or bonding
company of any defects or inadequacies in such Mortgaged Property, or any
part of it, which would adversely affect the insurability of such Mortgaged
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 by any AIMCO Party or, to the
Owner's knowledge, by any other Person, against any contractor, architect
or other party with respect
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to the condition of any Mortgaged Property or the existence of any
structural or other material defect therein. No Mortgaged Property has
been materially damaged by casualty which has not been fully repaired or
for which insurance proceeds have not been received or are not expected to
be received except as previously disclosed in writing to the Lender. There
are no proceedings pending for partial or total condemnation of any
Mortgaged Property except as disclosed in writing to the Lender.
SECTION 12.02(p) LAKEHAVEN NOTES. The Owner of the Lakehaven Notes
makes the same representations and warranties to the Lender with respect to
each Lakehaven Property as the Owner of each Mortgaged Property made with
respect to the Mortgaged Property which it owns, with the same effect as if
the words "Mortgaged Property" in this Agreement referred to each Lakehaven
Property and the word "Owner" included both the Owner of the Lakehaven
Notes and each Lakehaven Obligor.
SECTION 12.03. REPRESENTATIONS AND WARRANTIES OF THE LENDER. The Lender
hereby represents and warrants to the AIMCO Parties as follows:
SECTION 12.03(a) DUE ORGANIZATION. The Lender is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
SECTION 12.03(b) POWER AND AUTHORITY. The Lender has the requisite
power and authority to execute and deliver this Agreement and to perform
its obligations under this Agreement.
SECTION 12.03(c) DUE AUTHORIZATION. The execution and delivery by
the Lender of this Agreement, and the consummation by it of the
transactions contemplated thereby, and the performance by it of its
obligations thereunder, have been duly and validly authorized by all
necessary action and proceedings by it or on its behalf.
SECTION 12.03(d) VALID AND BINDING OBLIGATIONS. This Agreement and
the other Loan Documents have been duly authorized, executed and delivered
by the Lender and constitute the legal, valid and binding obligations of
the Lender, enforceable against the Lender 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.
SECTION 12.03(e) NON-CONTRAVENTION; NO LIENS. Neither the execution
and delivery of this Agreement and the other Loan Documents, nor the
fulfillment of or
69
compliance with the terms and conditions of this Agreement and the other
Loan Documents nor the payment of the Obligations:
(1) 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 the Lender, or any assets of the Lender, or any judgment or
order applicable to the Lender or to which the Lender or assets
of the Lender are subject, except for such breaches or violations
that, singly or in the aggregate, have not had, and are not
reasonably expected to cause, a material adverse effect upon the
financial condition of the Lender;
(2) 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 the Lender's Organizational
Documents, any indenture, existing agreement or other instrument
to which the Lender is a party or to which the Lender or assets
of the Lender are subject; or
(3) does or will require the consent or approval of any creditor of
the Lender, any Governmental Authority or any other Person except
such consents or approvals which have already been obtained.
ARTICLE XIII
COVENANTS
SECTION 13.01. AFFIRMATIVE COVENANTS OF THE AIMCO PARTIES. Each AIMCO
Party agrees and covenants with the Lender, with respect to itself, that, at all
times during the Term of this Agreement:
SECTION 13.01(a) COMPLIANCE WITH AGREEMENTS; NO AMENDMENTS. The
AIMCO Party shall comply with all the terms and conditions of each Loan
Document to which it is a party or by which it is bound; PROVIDED, HOWEVER,
that the AIMCO Party's failure to comply with such terms and conditions
shall not be an Event of Default until the expiration of the applicable
notice and cure periods, if any, specified in the applicable Loan Document.
SECTION 13.01(b) MAINTENANCE OF EXISTENCE. The AIMCO Party shall
maintain its existence and continue to be a limited partnership, limited
liability company or corporation, as the case may be, organized under the
laws of the state of its organization, duly
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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
the ability to perform, its obligations under this Agreement or any other
Loan Document.
SECTION 13.01(c) MAINTENANCE OF REIT STATUS. At all times during
which the REIT is bound by the terms of this Agreement: (i) the REIT shall
continue to qualify and be taxed as a real estate investment trust under
Subchapter M of the Internal Revenue Code; and (ii) each REIT Sub shall
continue to qualify as a "Qualified REIT Subsidiary" (as defined in
Subchapter M of the Internal Revenue Code) of the REIT.
SECTION 13.01(d) FINANCIAL STATEMENTS; ACCOUNTANTS' REPORTS; OTHER
INFORMATION. The AIMCO Party shall keep and maintain at all times complete
and accurate books of accounts and records in sufficient detail to
correctly reflect (x) all of the AIMCO Party's financial transactions and
assets and (y) the results of the operation of each Mortgaged Property and
copies of all written contracts, Leases and other instruments which affect
each Mortgaged Property (including all bills, invoices and contracts for
electrical service, gas service, water and sewer service, waste management
service, telephone service and management services); PROVIDED, HOWEVER,
that the AIMCO Party shall not be required to maintain bills and invoices
for a period of more than 12 months after the date on which the invoice is
paid. In addition, the REIT shall furnish, or cause to be furnished:
SECTION 13.01(d)(1) ANNUAL FINANCIAL STATEMENTS. As soon as
available, and in any event within 90 days after the close of REIT's fiscal
year during the Term of this Agreement, an audited balance sheet of the
REIT and its Subsidiaries, on a consolidated basis, as of the end of such
fiscal year, an audited statement of income, owners' equity and retained
earnings of the REIT and its Subsidiaries, on a consolidated basis, for
such fiscal year and an audited statement of cash flows of the REIT and its
Subsidiaries, on a consolidated basis, 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, and accompanied by a certificate of the REIT's
independent certified public accountants to the effect that such financial
statements have been prepared in accordance with GAAP, 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.
SECTION 13.01(d)(2) QUARTERLY FINANCIAL STATEMENTS. As soon as
available, and in any event within 45 days after each of the first three
fiscal quarters of each fiscal year during the Term of this Agreement, an
unaudited balance sheet of the REIT and its
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Subsidiaries, on a consolidated basis, as of the end of such fiscal
quarter, an unaudited statement of income and retained earnings of the
REIT and its Subsidiaries, on a consolidated basis, for the portion of the
fiscal year ended with the last day of such quarter, and an unaudited
statement of cash flows of the REIT and its Subsidiaries, on a consolidated
basis, 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 the controller of the REIT to
the effect that such financial statements have been prepared in accordance
with GAAP, 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.
SECTION 13.01(d)(3) QUARTERLY PROPERTY STATEMENTS. On a quarterly
basis within 45 days after the end of each of the first three fiscal
quarters of each fiscal year(or, upon the request of the Lender, within 30
days after the end of each month), a statement of income and expenses of
each Mortgaged Property accompanied by a certificate of the controller of
the REIT to the effect that each such statement of income and expenses
fairly presents the operations of each such Mortgaged Property for the
period indicated.
SECTION 13.01(d)(4) ANNUAL PROPERTY STATEMENTS. On an annual basis
within 45 days of the end of the fiscal year, an annual statement of income
and expenses of each Mortgaged Property accompanied by a certificate of the
controller of the REIT to the effect that each such statement of income and
expenses fairly presents the operations of each such Mortgaged Property for
the period indicated.
SECTION 13.01(d)(5) UPDATED RENT ROLLS. Upon the Lender's request
(but not more than once each calendar month), a current Rent Roll for each
Mortgaged 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 the Lender and in the form
required by the Lender and accompanied by a certificate of the controller
of the REIT to the effect that each such Rent Roll fairly presents the
information required therein.
SECTION 13.01(d)(6) SECURITY DEPOSIT INFORMATION. Upon the Lender's
request (but not more than once each calendar month), an accounting of all
security deposits held in connection with any lease of any part of any
Mortgaged 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 financial institution, along with any
authority or release necessary for the Lender to access information
regarding such accounts.
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SECTION 13.01(d)(7) SECURITY LAW REPORTING INFORMATION. So long as
the REIT is a reporting company under the Securities and Exchange Act of
1934, promptly upon their becoming available, (a) copies of all financial
statements, reports and proxy statements so sent or made available
generally by the REIT or any other AIMCO Party, or any of their Affiliates,
to their respective security holders and copies of all press releases made
by the Borrower or the REIT, (b) all regular and periodic reports and all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or a similar form) and prospectuses, if
any, filed by the REIT or any other AIMCO Party, or any of their
Affiliates, with the Securities and Exchange Commission or other
Governmental Authorities, and (c) all press releases and other statements
made available generally by the REIT or any AIMCO Party, or any of their
Affiliates, to the public concerning material developments in the business
of the REIT or other AIMCO Party.
SECTION 13.01(d)(8) ACCOUNTANTS' REPORTS. Promptly upon receipt
thereof, copies of any reports or management letters submitted to the AIMCO
Party 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 the AIMCO Party shall only be required to deliver
such reports and management letters to the extent that they relate to any
AIMCO Party or any Mortgaged Property.
SECTION 13.01(d)(9) BORROWER PLANS AND PROJECTIONS. Not less than 90
days after the beginning of each fiscal year, copies of (1) the Borrower's
business plan for the current and the succeeding two fiscal years, (2) the
Borrower's annual budgets (including capital expenditure budgets) and
projections for each Mortgaged Property; and (3) the Borrower's financial
projections for the current and the succeeding two fiscal years, as
prepared by the Borrower's Chief Financial Officer and in a format and with
such detail as the Lender may require.
SECTION 13.01(d)(10) ANNUAL MARKET STUDIES. Within 30 days after the
Lender's request, market studies of the local metropolitan real estate
market in which each Mortgaged Property is located, in the form of the
standard rental and sales comparable analyses currently performed by the
REIT in the ordinary course of its business.
SECTION 13.01(d)(11) ORGANIZATIONAL CHART. Within 45 days after the
request of the Lender, any subsequent revisions to the Organizational
Chart.
SECTION 13.01(d)(12) OTHER REPORTS. Promptly after delivered, all
reports, filings, communications or correspondence which any AIMCO Party
delivers to any Governmental Authority, and promptly after request by the
Lender, any reports, schedules, financial
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statements or other written information concerning the AIMCO Party's
business affairs or the condition (financial or otherwise) of any of the
Mortgaged Properties which the AIMCO Party prepares in the ordinary course
of its business or which are reasonably requested by the Lender.
The Owner of the Lakehaven Notes shall perform the same agreements and
covenants, or cause the Lakehaven Obligors to perform the same agreements
and covenants, with respect to each Lakehaven Property as the Owner of each
Mortgaged Property agrees and covenants to perform under this Section
13.01(d) with respect to the Mortgaged Property which it owns, with the
same effect as if the words "Mortgaged Property" in this subsection also
referred to each Lakehaven Property and the word "Owner" also included both
the Owner of the Lakehaven Notes and each Lakehaven Obligor. In addition,
the Owner of the Lakehaven Notes shall provide (i) on a quarterly basis
within 45 days after the end of each fiscal quarters of each fiscal
year(or, upon the request of the Lender, within 30 days after the end of
each month), a statement of the Lakehaven Notes Debt Service, categorized
by principal, interest and additional interest payments, and containing
such additional information as the Lender may request, certified by the
Owner of the Lakehaven Notes and Lakehaven Obligors and (ii) promptly after
paid, a copy of the receipts showing the payment of the real estate taxes
and other assessments, and the insurance premiums, for the Lakehaven
Properties.
SECTION 13.01(e) CERTIFICATE OF COMPLIANCE. The AIMCO Party shall
deliver to the Lender concurrently with the delivery of the financial
statements and/or reports required to be delivered pursuant to paragraphs
(d)(1) and (d)(2) above a certificate signed by the controller of the REIT
stating that, to the best of the knowledge of the controller of the REIT
executing such certificate following reasonable inquiry, no Event of
Default or Potential Event of Default has occurred and is continuing, or if
an Event of Default or Potential Event of Default has occurred and is
continuing, specifying the nature thereof.
SECTION 13.01(f) MAINTAIN LICENSES. The AIMCO Party 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.
SECTION 13.01(g) ACCESS TO RECORDS; DISCUSSIONS WITH OFFICERS AND
ACCOUNTANTS. To the extent permitted by law (including the Securities
Exchange Act of 1934) and in addition to the applicable requirements of the
Security Documents, the AIMCO Party shall permit the Lender:
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(1) to inspect, make copies and abstracts of, and have reviewed or
audited, such of the AIMCO Party's books and records as may
relate to the Obligations or any Mortgaged Property;
(2) to discuss the AIMCO Party's affairs, finances and accounts with
any of the AIMCO Party's officers, partners and employees;
(3) to discuss the AIMCO Party's affairs, finances and accounts with
its independent public accountants, provided that the controller
of the REIT has been given the opportunity by the Lender to be a
party to such discussions; and
(4) to receive any other information that the Lender deems necessary
or relevant in connection with any Advance, any Loan 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. Notwithstanding the foregoing, the AIMCO
Party in no event shall be required to disclose any communications or
materials protected by the attorney-client privilege and not waived.
SECTION 13.01(h) INFORM THE LENDER OF MATERIAL EVENTS. The AIMCO
Party shall promptly inform the Lender in writing of any of the following
(and shall deliver to the Lender copies of any related written
communications, complaints, orders, judgments and other documents relating
to the following) of which the AIMCO Party has or obtains actual knowledge:
(1) DEFAULTS. The occurrence of any Event of Default or any
Potential Event of Default under this Agreement or any other Loan
Document;
(2) 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 upon any AIMCO Party;
(3) LEGAL PROCEEDINGS. The commencement or threat of, or amendment
to, any proceedings by or against the AIMCO Party 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 upon any AIMCO Party;
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(4) BANKRUPTCY PROCEEDINGS. The commencement of any proceedings by
or against the AIMCO Party under any applicable bankruptcy,
reorganization, liquidation, insolvency or other similar law now
or hereafter in effect or of any proceeding in which a receiver,
liquidator, trustee or other similar official is sought to be
appointed for it;
(5) REGULATORY SUPERVISION OR PENALTY. The receipt of notice from
any Governmental Authority having jurisdiction over the AIMCO
Party that (A) the AIMCO Party is being placed under regulatory
supervision, (B) any license, Permit, charter, membership or
registration material to the conduct of the AIMCO Party's
respective business or the Mortgaged Properties is to be
suspended or revoked or (C) the AIMCO Party is to cease and
desist any practice, procedure or policy employed by the AIMCO
Party, 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 upon any AIMCO Party;
(6) ENVIRONMENTAL CLAIM. The receipt of notice from any Governmental
Authority or other Person relating to any Environmental Claim (i)
with respect to any Multifamily Residential Property which, if
decided adversely, would have a Material Adverse Effect on the
Borrower, the REIT and their respective Subsidiaries, taken as a
whole, or (ii) with respect to any Mortgaged Property;
(7) MATERIAL TRANSACTIONS OR OCCURRENCES. The consummation of any
material Investment or Disposition, of any material issuance of
Stock of the REIT (other than upon the tender of any Units for
redemption or upon the conversion of any shares of the REIT's
Class B Common Stock into shares of the REIT's Class A Common
Stock) or Units, of any incurrence of material Indebtedness or of
any other material transaction entered into, by the Borrower, the
REIT, any Management Entity or any of their Subsidiaries; and any
change in any executive officer of the REIT;
(8) MATERIAL ADVERSE EFFECTS. The occurrence of any act, omission,
change or event which has a Material Adverse Effect upon the
REIT, the Borrower or their respective Subsidiaries, taken as a
whole, subsequent to the date of the most recent audited
financial statements of the Borrower and the REIT delivered to
the Lender pursuant to Section 13.01(d); and
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(9) ACCOUNTING CHANGES. Any material change in the Borrower's or the
REIT's accounting policies or financial reporting practices.
SECTION 13.01(i) SINGLE-PURPOSE ENTITIES. Each Owner shall at all
times maintain and conduct itself as a Single-Purpose entity and shall own
no more than one Mortgaged Property.
SECTION 13.01(j) INSPECTION. The AIMCO Party shall permit any Person
designated by the Lender: (i) to make entries upon and inspections of the
Mortgaged 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 Mortgaged Property; PROVIDED, HOWEVER, that prior to an
Event of Default or Potential Event of Default, (i) all such entries,
examinations and inspections shall be conducted at reasonable times during
normal business hours, (ii) if such entries, examinations and inspections
are conducted in the ordinary course of the servicing of the Credit
Facility, the Borrower shall not be required to pay for them and (iii) if
such entries, examinations and inspections are conducted outside of the
ordinary course of the servicing of the Credit Facility, Borrower shall pay
the Lender the amount of the Lender's out-of-pocket costs in conducting the
entries, examinations and inspections.
SECTION 13.01(k) COMPLIANCE WITH APPLICABLE LAWS. The AIMCO Party
shall comply in all material respects with all Applicable Laws now or
hereafter affecting any Mortgaged Property or any part of any Mortgaged
Property or requiring any alterations, repairs or improvements to any
Mortgaged Property. The AIMCO Party shall procure and continuously
maintain in full force and effect, and shall abide by and satisfy, all
material terms and conditions of all Permits.
SECTION 13.01(l) WARRANTY OF TITLE. The AIMCO Party shall warrant
and defend (a) the title to each Mortgaged Property and every part of each
Mortgaged Property, subject only to Permitted Liens, and (b) the validity
and priority of the lien of the applicable Loan Documents, subject only to
Permitted Liens, in each case against the claims of all Persons whatsoever.
The AIMCO Party shall reimburse the Lender for any losses, costs, damages
or expenses (including reasonable attorneys' fees and court costs) incurred
by the Lender if an interest in any Mortgaged Property, other than with
respect to a Permitted Lien, is claimed by others.
SECTION 13.01(m) DEFENSE OF ACTIONS. The AIMCO Party shall appear in
and defend any action or proceeding purporting to affect the security for
this Agreement or the rights or power of the Lender hereunder, and shall
pay all costs and expenses, including the cost of evidence of title and
reasonable attorneys' fees, in any such action or proceeding in which the
Lender may appear. If the AIMCO Party fails to perform any of the
covenants or
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agreements contained in this Agreement, or if any action or proceeding is
commenced that is not diligently defended by the AIMCO Party which affects
in any material respect the Lender's interest in any Mortgaged 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 the Lender may, but without obligation
to do so and without notice to or demand upon the AIMCO Party and without
releasing the AIMCO Party from any Obligation, make such appearances,
disburse such sums and take such action as the Lender deems necessary or
appropriate to protect the Lender's interest, including disbursement of
reasonable attorney's fees, entry upon such Mortgaged Property to make
repairs or take other action to protect the security of said Mortgaged
Property, and payment, purchase, contest or compromise of any encumbrance,
charge or lien which in the judgment of the Lender appears to be prior or
superior to the Loan Documents. The Lender shall give the Borrower notice
of any action taken under this subsection reasonably promptly after it has
taken the action. In the event (i) that any Security Document is
foreclosed in whole or in part or that any Loan 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 document prior to or subsequent to any Security Document or
any Loan Document in which proceeding the Lender is made a party or (iii)
of the bankruptcy of the AIMCO Party or an assignment by the AIMCO Party
for the benefit of their respective creditors, the AIMCO Party shall be
chargeable with and agrees to pay all costs of collection and defense,
including reasonable 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.
SECTION 13.01(n) PROPERTY MANAGEMENT; MAINTENANCE OF PROPERTIES. The
AIMCO Party shall continue to operate each Mortgaged Property as a
Multifamily Residential Property, and shall manage or cause to be managed
the operations of each Mortgaged Property in accordance with the applicable
provisions of the Loan Documents. The AIMCO Party (i) shall not commit
waste or permit impairment or deterioration of any Mortgaged Property, (ii)
shall not abandon any Mortgaged Property, (iii) shall restore or repair
promptly and in a good and workmanlike manner all or any part of any
Mortgaged Property to the equivalent of its condition existing immediately
prior to such casualty, or such other lesser condition as the Lender 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 Mortgaged Property,
including improvements, fixtures, equipment, machinery and appliances
thereon in good repair and shall replace fixtures, equipment, machinery and
appliances on each Mortgaged Property when necessary to keep such items in
good repair, (v) shall generally operate and maintain each Mortgaged
Property in a manner to ensure maximum rentals and (vi) shall give notice
in writing to the Lender of, and, unless otherwise directed in writing by
the Lender, appear in and defend, any
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action or proceeding purporting to affect any Mortgaged Property, the
security of any Security Document or the rights or powers of the Lender
under any of the Loan Documents. No AIMCO Party shall, and no AIMCO Party
shall grant permission to any tenant or other person to, remove, demolish
or alter any improvement now existing or hereafter erected on any Mortgaged
Property or any fixture, equipment, machinery or appliance in or on any
Mortgaged Property except when incident to the replacement of fixtures,
equipment, machinery and appliances with items of like kind.
SECTION 13.01(o) ADDITIONS TO THE MORTGAGED PROPERTIES. Except as
otherwise provided in the Loan Documents, the AIMCO Party shall have the
right to undertake any alteration, improvement, demolition, removal or
construction (collectively, "ALTERATIONS") to any of the Mortgaged
Properties without the prior consent of the Lender; PROVIDED, HOWEVER, that
in any case, no such Alteration shall be made to any Mortgaged Property
without the prior written consent of the Lender if (i) such Alteration
could reasonably be expected to adversely affect the value of such
Mortgaged 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 Alteration could reasonably
be expected to result in interference to the occupancy of tenants of such
Mortgaged Property such that tenants in occupancy with respect to five
percent (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 Alteration 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, the AIMCO Party must obtain the Lender's
prior written consent to construct Alterations with respect to the
Mortgaged Property costing in excess of $125,000 and the AIMCO Party must
give prior written notice to the Lender of its intent to construct
Alterations with respect to the Mortgaged Property costing in excess of
$50,000; PROVIDED, HOWEVER, that the preceding requirements shall not be
applicable to Alterations made, conducted or undertaken by an Owner as part
of the Owner's routine maintenance and repair of the Mortgaged Properties
as required by Section 13.01(n) or as otherwise required by the Loan
Documents.
SECTION 13.01(p) ERISA. The AIMCO Party shall at all times remain in
compliance in all material respects with all applicable provisions of ERISA
and similar requirements of the PBGC.
SECTION 13.01(q) 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 the Lender (or any transferee or assignee
thereof, including a participation holder)) ("TAXES") is levied, assessed
or charged by the United States, or any state in the United States, or any
political subdivision or taxing authority thereof or therein upon any of
the Loan
79
Documents or the obligations secured thereby, the interest of the Lender in
the Mortgaged Properties, or the Lender by reason of or as holder of the
Loan Documents, the AIMCO Parties shall pay all such Taxes to, for, or on
account of the Lender (or provide funds to the Lender for such payment, as
the case may be) as they become due and payable and shall promptly furnish
proof of such payment to the Lender, 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 the Lender may prohibit the AIMCO Party from paying
the Taxes to or for the Lender, the AIMCO Party shall enter into such
further instruments as may be permitted by law to obligate the AIMCO Party
to pay such Taxes.
SECTION 13.01(r) FURTHER ASSURANCES. The AIMCO Party, at the request
of the Lender, 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 the
Lender 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 Loan Documents or to subject the Collateral to the lien and
security interests of the Loan Documents or to evidence, perfect or
otherwise implement, to assure the lien and security interests intended by
the terms of the Loan Documents or in order to exercise or enforce its
rights under the Loan Documents.
SECTION 13.01(s) MONITORING COMPLIANCE. Upon the request of the
Lender, from time to time, the AIMCO Party shall promptly provide to the
Lender such documents, certificates and other information as may be deemed
necessary to enable the Lender to perform its functions under the Servicing
Agreement.
SECTION 13.01(t) LEASES. Each unit in each Mortgaged Property will
be leased pursuant to the form lease delivered to, and acceptable to, the
Lender, with no material modifications to such approved form lease, except
as disclosed in writing to the Lender.
SECTION 13.01(u) APPRAISALS. At the time of the addition of a
Mortgaged Property to the Collateral Pool, and at any time and from time to
time thereafter, the Lender shall be entitled to obtain an Appraisal of any
Mortgaged Property. The Borrower shall pay all of the Lender's costs of
obtaining the Appraisal, except that the Borrower shall not be required to
pay for any Appraisal of a Mortgaged Property if, within the 12 month
period immediately preceding the date of the Appraisal, the Lender had
received another Appraisal of the Mortgaged Property. Notwithstanding the
foregoing, the Borrower shall pay all of the Lender's costs of obtaining an
Appraisal obtained pursuant to Section 13.04(b)(2).
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SECTION 13.01(v) EXPENSES.
(1) The Borrower shall pay, or reimburse the Lender for, all costs
and expenses incurred by the Lender, including the legal fees and
expenses of the Lender's outside legal counsel, in connection with the
preparation, review and negotiation of all documents, instruments and
certificates to be executed and delivered in connection with a
Request, the performance by the Lender of any of its obligations with
respect to the Request, the satisfaction of all conditions precedent
to the Borrower's rights or the Lender's obligations with respect to
the Request and all transactions related to any of the foregoing. The
obligations of the Borrower under this subsection shall be absolute
and unconditional, regardless of whether the transaction requested in
the Request actually occurs.
(2) The Borrower shall pay, or reimburse the Lender for, all costs
and expenses, other than those costs and expenses described in
paragraph (1), in connection with a Request, the performance by the
Lender of any of its obligations with respect to the Request, the
satisfaction of all conditions precedent to the Borrower's rights or
the Lender's obligations with respect to the Request and all
transactions related to any of the foregoing, including the cost of
title insurance premiums and applicable recordation and transfer taxes
and charges. The obligations of the Borrower under this subsection
shall be absolute and unconditional, regardless of whether the
transaction requested in the Request actually occurs.
(3) The foregoing expenses shall be in addition to all fees required
under Article XIV payable by the Borrower in connection with a
Request.
SECTION 13.01(w) OWNERSHIP.
(1) The REIT shall own, directly or indirectly, through one or
more intermediaries, all of the Ownership Interests in the REIT Subs.
(2) AIMCO-GP, Inc. shall be the sole general partner of the
Borrower and AIMCO-GP, Inc. and AIMCO-LP, Inc. shall own in the
aggregate at least 65% of the Ownership Interests in the Borrower.
(3) Except with respect to AIMCO/Bluffs, L.L.C., AIMCO Holdings
shall be the sole general partner or managing member of, and the
Borrower shall be the sole limited partner or other member of, each
Owner, and the Borrower shall own at least a 98% limited partnership
interest in, or a 98% membership interest in, each Owner.
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(4) AIMCO Holdings shall be the sole managing member of
AIMCO/Bluffs, L.L.C., owning a 1% membership interest in AIMCO/Bluffs,
L.L.C., and the Borrower and Property Asset Management Services, L.P.,
a Delaware limited partnership, shall be the sole other members of
AIMCO/Bluffs, L.L.C., with the Borrower owning at least a 98%
membership interest in AIMCO/Bluffs, L.L.C.
(5) AIMCO Holdings QRS, Inc., a Delaware corporation, shall be
the sole general partner , owning a 2% general partnership interest
in, and the Borrower shall be the sole limited partner, owning a 98%
limited partnership interest in, AIMCO Holdings.
SECTION 13.01(x) PUBLICLY HELD REIT. The REIT shall give the Lender
notice if it no longer is publicly held. The Lender shall have the right,
upon such notice, to impose such additional reporting and other
requirements as may be required under the DUS Guide.
SECTION 13.01(y) CHANGE IN SENIOR MANAGEMENT.
(1) The Borrower shall give the Lender notice of any change in
the individuals comprising Senior Management if, after the change, one
or more of the members of Senior Management were not members of Senior
Management immediately prior to the change.
(2) Within 30 Business Days after receipt of the Borrower's
notice, the Lender shall have the right to terminate this Agreement
and the Credit Facility by giving a notice of such termination to the
Borrower. In such event, this Agreement and the Credit Facility shall
terminate with the same effect as if the Lender had approved a Credit
Facility Termination Request (including the Borrower's obligation,
pursuant to Section 10.03(a), to pay in full of all of the Notes
Outstanding on the Closing Date, including any associated prepayment
premiums or other charges under the Notes), except that, for these
purposes, the Closing Date shall be the 180th day after the date on
which the Borrower first receives the Lender's termination notice.
(3) If the Lender exercises its termination right pursuant to
paragraph (2), the Borrower shall have a period of 180 days,
commencing with the date on which the Borrower receives the Lender's
termination notice, to request that the Lender rescind its termination
notice. The Borrower may include in its request any undertakings which
it is willing to make in order to obtain such a rescission. The Lender
shall give the Borrower notice of its acceptance or rejection of the
Borrower's request within 30 Business Days after the Borrower makes
the request. If the Lender accepts the request, the Lender shall give
the Borrower a notice that the termination notice shall
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be deemed rescinded and of no further force or effect, and this
Agreement and the Credit Facility shall continue in accordance with,
and subject to the terms, conditions and limitations contained in,
this Agreement.
SECTION 13.01(z) DATE-DOWN ENDORSEMENTS. The Borrower shall pay for
the cost and expenses incurred by the Lender to the Title Company in
obtaining from time to time an endorsement to each Title Insurance Policy
containing a Revolving Credit Endorsement, amending the effective date of
the Title Insurance Policy to the date of the title search performed in
connection with the endorsement, provided that it shall not be liable to
pay for more than one such endorsement in any consecutive 12 month period.
SECTION 13.01(aa) DISPOSITION OF LAKEHAVEN NOTES. The Owner of the
Lakehaven Notes may make a demand under any Lakehaven Note which is a
demand note at any time without consent from the Lender. In the event of
any such demand, the Owner shall give the Lender prompt written notice
thereof, and of any payment of the demand, and the Lender shall have the
right to perform a revised Valuation of the Collateral after payment of the
demand. The Owner of the Lakehaven Notes shall keep the Lender fully
informed about the status of each loan evidenced by a Lakehaven Note and
shall notify the Lender immediately in writing in the event of a default
under any Lakehaven Note. Upon such a default, the Owner of the Lakehaven
Note shall not take any actions (other than, at its option, the giving of a
notice of default) without the approval of the Lender. Within 15 Business
Days after the occurrence of the default, the Owner of the Lakehaven Note
shall give the Lender a detailed written notice setting forth all
reasonable options which the Lender would be entitled to pursue under the
Lakehaven Loan Documents, including, if applicable, the giving of any
notice of default (if one has not already been delivered), any acceleration
of the principal of the Lakehaven Note and any foreclosure of any Lakehaven
Collateral, the relative merits of the options discussed and the options
which the Owner recommends. If the Lender does not disapprove the notice
within 15 Business Days after receipt of the Owner's notice, the Lender
shall be deemed to have approved the Owner's recommendations and the Owner
may implement such recommendations. If the Lender disapproves the Owner's
notice, the Owner shall thereafter take no actions with respect to the
options or its remedies under the Lakehaven Loan Documents, including any
acceleration of the principal of the Lakehaven Note and any foreclosure of
any Lakehaven Collateral without the written direction of the Lender
(except for the giving of a notice of default), and shall take all actions
directed by the Lender in a written direction to the Owner, including the
giving of a notice of default (if one has not already been given), the
acceleration of the Lakehaven Note and the foreclosure of the Lakehaven
Collateral. All actions taken by the Owner of the Lakehaven Note shall be
at the Owner's sole expense, whether or not required by the Lender, and the
Lender shall not be liable to the Owner for any damages or liabilities
resulting from the taking of any actions required by the Lender, or the
failure by the Lender to approve the taking of any actions by
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the Owner of the Lakehaven Note. Upon any foreclosure of the Lakehaven
Property, or other disposition of the Lakehaven Note or the Lakehaven Loan
Documents, or upon the payment in full of the Lakehaven Note, the
disposition or payment in full shall be considered a release of the
Lakehaven Note and the Borrower shall comply with all of the terms and
conditions of Article VII with respect to the release, including the
payment of the Release Price and the Release Fee. None of the provisions
of this Section, and none of the other provisions of this Agreement
relating to a Lakehaven Note or the Lakehaven Collateral, shall apply after
the date on which the Lakehaven Note or the Lakehaven Collateral is
released pursuant to Articles VII or X.
SECTION 13.01(bb) STRATEGIC PLAN. Within 120 days after the end of
each fiscal year of the REIT, and at such other times as there is a
material change in the REIT's or the Borrower's short or long range plans,
including its plans for operations, mergers, acquisitions and management,
the REIT shall deliver to the Lender a Strategic Plan, certified by a
member of Senior Management as true, correct and complete.
SECTION 13.01(cc) INCREASED COSTS AND REDUCTION OF RETURN.
(1) If the Lender or Xxxxxx Mae shall determine that, due to
either (i) the introduction of or any change in or in the
interpretation of any Requirement of Law or (ii) the compliance with
any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any
increase in the cost to the Lender or Xxxxxx Xxx of agreeing to make
or of making, funding or maintaining any Advance hereunder, then the
Borrower shall be liable for, and shall from time to time, upon
written demand therefor by the Lender or Xxxxxx Mae, which demand
shall set forth the basis of such increased cost in reasonable detail,
pay to the Lender or Xxxxxx Xxx, as applicable, such additional
amounts as are sufficient to compensate the Lender or Xxxxxx Mae for
such increased costs.
(2) If the Lender or Xxxxxx Xxx shall have reasonably determined
that (i) the introduction of any Capital Adequacy Regulation, (ii) any
change in any Capital Adequacy Regulation, (iii) any change in the
interpretation or administration of any Capital Adequacy Regulation by
any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance with any
Capital Adequacy Regulation by the Lender or Xxxxxx Mae, effects or
would effect an increase in the amount of capital required or expected
to be maintained by the Lender or Xxxxxx Xxx (taking into
consideration the Lender's or Xxxxxx Mae's policies with respect to
capital adequacy and the Lender's or Xxxxxx Mae's desired return on
capital), then, upon written demand of the Lender or Xxxxxx Mae, which
demand shall set forth in reasonable detail the basis for any such
increase in required
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capital, the Borrower shall immediately pay to the Lender or Xxxxxx
Mae, as applicable, from time to time as specified by the Lender or
Xxxxxx Xxx, additional amounts sufficient to compensate the Lender or
Xxxxxx Mae for such increase.
(3) If the Lender or Xxxxxx Xxx shall have determined that any
of the events described in subsections (a) or (b) effects or would
effect an increase in cost or reduction of return resulting in
additional Obligations hereunder, the Lender or Xxxxxx Mae, as
applicable, shall, with reasonable promptness, notify the Borrower of
such determination, PROVIDED that no failure to do so shall relieve
the Borrower or any other AIMCO Party of any Obligation hereunder.
SECTION 13.02 NEGATIVE COVENANTS OF THE AIMCO PARTIES. Each AIMCO Party
enters into the covenants and agreements with the Lender set forth in this
Section. Each covenant and agreement shall apply continuously during the Term
of this Agreement:
SECTION 13.02(a) OTHER ACTIVITIES. No Owner shall:
(1) either directly or indirectly sell, transfer, exchange or
otherwise dispose of any of its assets except as permitted
hereunder, by the Security Instruments or the Cash
Management Agreement;
(2) engage in any business or activity other than the ownership,
management and operation of the Mortgaged Properties;
(3) amend its Organizational Documents in any manner without the
prior written consent of the Lender;
(4) dissolve or liquidate in whole or in part;
(5) merge or consolidate with any Person; or
(6) use, or permit to be used, any Mortgaged Property for any
uses or purposes other than as a Multifamily Residential
Property.
SECTION 13.02(b) COMPLIANCE WITH THE LOAN DOCUMENTS. The AIMCO Party
shall not fail to comply with any provision of the Loan Documents to which
it is a party or by which it is bound.
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SECTION 13.02(c) VALUE OF SECURITY. The AIMCO Party shall not take
any action which could reasonably be expected to have any Material Adverse
Effect upon the REIT, the Borrower and their respective Subsidiaries, taken
as a whole.
SECTION 13.02(d) ZONING. No Owner shall initiate or consent to any
zoning reclassification of any Mortgaged Property or seek any variance
under any zoning ordinance or use or permit the use of any Mortgaged
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.
SECTION 13.02(e) LIENS. The AIMCO Party shall not create, incur,
assume or suffer to exist any Lien on (i) any Mortgaged Property or any
part of any Mortgaged Property, except the Permitted Liens or (ii) any
Ownership Interests;
SECTION 13.02(f) SALE. The AIMCO Party shall not Transfer (i) any
Mortgaged Property or any part of any Mortgaged Property without the prior
written consent of the Lender (which consent may be granted or withheld in
the Lender's discretion), or any interest in any Mortgaged Property, other
than (x) as may be permitted by the Loan Documents with respect to such
Mortgaged Property or (y) to enter into Leases for units in a Mortgaged
Property to any tenant in the ordinary course of business, or (ii) any
Ownership Interests, if the Transfer will result in a breach of Section
13.01(w).
SECTION 13.02(g) INDEBTEDNESS. No Owner shall incur or be obligated
at any time with respect to aggregate Indebtedness (other than Advances),
in excess of $100,000.
SECTION 13.02(h) SINGLE-PURPOSE ENTITY. No Owner shall cease at any
time during the term hereof to be a Single-Purpose entity.
SECTION 13.02(i) PRINCIPAL PLACE OF BUSINESS. The AIMCO Party shall
not change its principal place of business or the location of its books and
records, each as set forth in Section 12.01(a), without first giving 30
days' prior written notice to the Lender.
SECTION 13.02(j) FREQUENCY OF REQUESTS. The Borrower shall make all
Requests (other than a Future Advance Request) in any calendar quarter on
the same day in the calendar quarter. Accordingly, once the Borrower makes
one or more Requests (other than a Future Advance Request) in a calendar
quarter, it shall not make any further Requests (other than a Future
Advance Request) in the calendar quarter. The Borrower shall have the
right, subject to the terms, conditions and limitations of this Agreement,
to make a Future Advance Request for a Revolving Facility Advance on any
day until the expiration of the
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Revolving Facility Availability Period and to make a Future Advance Request
for a Base Facility Advance on any day until the expiration of the Base
Facility Availability Period.
SECTION 13.02(k) CHANGE IN PROPERTY MANAGEMENT. There shall not be a
change in the management agent for any Mortgaged Property except to (i) an
AIMCO-Related Management Agent or (ii) a management agent which the Lender
determines is qualified in accordance with the criteria set forth in
Section 701 of the DUS Guide, and the economic terms of the management
agreement for such management agent shall not be on terms less favorable to
the Owner than the management agreement in effect prior to the change in
management agent.
SECTION 13.02(l) SHELF CONDOMINIUMS. None of the Mortgaged
Properties shall be submitted to a condominium regime during the Term of
this Agreement.
SECTION 13.02(m) RESTRICTIONS ON OWNERSHIP DISTRIBUTIONS. No AIMCO
Party shall make any distributions of any nature or kind whatsoever to the
owners of its Ownership Interests as such if, at the time of such
distribution, an Event of Default has occurred and is continuing, except
that the AIMCO Party may make such distributions if they are required to
maintain the REIT's qualification as a real estate investment trust under
Subchapter M of the Internal Revenue Code.
SECTION 13.02(n) STATUS AS A PUBLIC REAL ESTATE INVESTMENT TRUST.
The REIT shall not take or permit any actions which will cause it not to
qualify, and be taxed, as a real estate investment trust under Subchapter M
of the Internal Revenue Code, or which will jeopardize such qualification
or tax treatment and shall not cease to have its common Stock listed on the
New York Stock Exchange, the American Stock Exchange, or the Nasdaq Stock
Exchange.
SECTION 13.02(o) LINES OF BUSINESS. No Owner shall be engaged in any
businesses other than the acquisition, ownership, development,
construction, leasing, financing or management, directly or through
Affiliates, of Multifamily Residential Properties, or the ownership of the
Lakehaven Collateral. No other AIMCO Party shall be engaged in any
businesses other than (i) the acquisition, ownership, development,
construction, leasing, financing or management, directly or through
Affiliates, of Multifamily Residential Properties, and (ii) other
businesses related to Real Estate Assets, provided that the Carrying Value
of the assets owned in such other businesses shall not at any time exceed
15% of the Carrying Value of the total assets owned by REIT, the Borrower
and their respective Subsidiaries, and the conduct of these other
businesses shall not violate the Organizational Documents pursuant to which
the other AIMCO Party is formed.
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SECTION 13.02(p) LIMITATION ON UNIMPROVED REAL PROPERTY. No AIMCO
Party shall permit the value of its Unimproved Real Property to exceed 10%
of the value of all of its Real Estate Assets. Each of the foregoing
values shall be determined by the Lender.
SECTION 13.02(q) LIMITATION ON UNIMPROVED REAL PROPERTY AND NEW
CONSTRUCTION. Subject to the provisions of Section 13.01(o), no AIMCO
Party shall permit the sum of (i) the value of its Unimproved Real Property
and (ii) the value of its Real Estate Assets which are under construction
or subject to substantial rehabilitation to exceed 20% of the value of all
of its Real Estate Assets. Each of the foregoing values shall be
determined by the Lender.
SECTION 13.02(r) NO ENCUMBRANCE OF COLLATERAL RELEASE PROPERTY.
Unless an Owner sells a Collateral Release Property to a Person who is not
an Affiliate of an AIMCO Party substantially simultaneously with the
release of the Collateral Release Property from the Collateral Pool, the
Borrower shall not encumber the Collateral Release Property for a period of
120 days following the release of the Collateral Release Property from the
Collateral Pool.
SECTION 13.02(s) NO FURTHER PLEDGE OF LAKEHAVEN NOTES OR FORECLOSURE
OF LAKEHAVEN PROPERTY. The Owner of the Lakehaven Notes shall not further
pledge or assign the Lakehaven Notes or the other Lakehaven Loan Documents,
and shall not amend, terminate or otherwise change any of the Lakehaven
Loan Documents without the written consent of the Lender.
SECTION 13.03. FINANCIAL COVENANTS OF THE AIMCO PARTIES. The AIMCO Parties
each agrees and covenants with the Lender that, at all times during the Term of
this Agreement:
SECTION 13.03(a) FINANCIAL DEFINITIONS. For all purposes of this
Agreement, the following terms shall have the respective meanings set forth
below:
"ADJUSTED EBITDA" means, for any period of determination, for any
Person, such Person's EBITDA (or as applicable, its pro-rata share of
EBITDA) less the aggregate amount of such Person's Imputed Capital
Expenditures. Adjusted EBITDA with respect to any Unqualified Property
will take into account the Person's pro-rata share of Imputed Capital
Expenditures.
"APARTMENT PROPERTY CAP RATE" means (a) initially, 9.6% and (b) on the
first day of each Loan Year, shall change to the national average
capitalization rate for Class B apartment properties as published in the
then current CB Commercial Investor Survey or, if the survey is no longer
published, an equivalent survey selected by the Lender.
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"CASH EQUIVALENTS" means:
(a) securities issued or fully guaranteed or insured by the United
States Government or any agency thereof and backed by the full faith and
credit of the United States having maturities of not more than six months
from the date of acquisition;
(b) certificates of deposit, time deposits, demand deposits,
eurodollar time deposits, repurchase agreements, reverse repurchase
agreements, or bankers' acceptances, having in each case a tenor of not
more than three (3) months, issued by any U.S. commercial bank (or any
branch or agency of a non-U.S. bank licensed to conduct business in the
U.S.) having combined capital and surplus of not less than $100,000,000
whose short-term securities are rated at least A-1 by S&P and P-1 by
Moody's; PROVIDED, HOWEVER, such Investments may not be made in amounts in
excess of $1,000,000 with any lender that is owed Indebtedness in excess of
$1,000,000 by the Borrower, the REIT or any Subsidiary unless such bank
waives in writing (in form and substance satisfactory to the Lender) its
right to set-off such Investment against such Indebtedness;
(c) demand deposits on deposit in accounts maintained at commercial
banks having membership in the FDIC and in amounts not exceeding the
maximum amounts of insurance thereunder; and
(d) commercial paper of an issuer rated at least A-1 by S&P or P-1 by
Moody's and in either case having a tenor of not more than three (3)
months.
"CONSOLIDATED EBITDA" means, for any period, and without double
counting any item, the sum of the Adjusted EBITDA for the Borrower, the
REIT and their respective Subsidiaries for such period on a consolidated
basis PLUS the Borrower's pro-rata share of aggregate EBITDA for each of
the Management Entities.
"CONSOLIDATED EBITDA-TO-FIXED CHARGES RATIO" means, for any period of
determination, the ratio computed as follows:
Consolidated EBITDA-to-Fixed [Consolidated EBITDA minus Imputed
Capital Expenditures]
Charges Ratio = divided by
Consolidated Fixed Charges
"CONSOLIDATED EBITDA-TO-INTEREST RATIO" means, for any period of
determination, the ratio computed as follows:
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Consolidated EBITDA-to-Interest Ratio= [Consolidated EBITDA minus
Imputed Capital Expenditures]
divided by
Consolidated Interest Expense
"CONSOLIDATED FIXED CHARGES" means, for any period of determination,
the sum of the Consolidated Interest Expense for such period, plus
Consolidated Scheduled Amortization for such period, plus dividends accrued
(whether or not declared or payable) on the REIT's preferred Stock during
such period plus any cumulative unpaid dividends on such preferred Stock
carried over to such period from a prior period, excluding, however, any
cumulative unpaid dividends from preferred Stock in any of the Management
Entities, plus the aggregate amount of expenses in connection with the
issuance of bonds and related matters, any scheduled principal amortization
in respect of any Indebtedness, plus payments into sinking funds in respect
of any Indebtedness.
"CONSOLIDATED INTEREST EXPENSE" means, for any period of
determination, and without double counting any item, the sum of the
Interest Expense for the Borrower, the REIT and their respective
Subsidiaries for such period on a consolidated basis, excluding amounts
expended for amortization of loan costs.
"CONSOLIDATED SCHEDULED AMORTIZATION" means, for any period of
determination, and without double counting any item, the sum of the
Scheduled Amortization for the Borrower, the REIT and their respective
Subsidiaries for such period on a consolidated basis.
"CONSOLIDATED TOTAL INDEBTEDNESS" means as of any date, and without
double counting any item, the aggregate amount of Total Indebtedness for
the Borrower, the REIT and their respective Subsidiaries as of such date.
"EBITDA" means, for any period, the sum determined in accordance with
GAAP, of the following, for any Person on a consolidated basis (in the case
of the Borrower or the REIT, before deducting for minority interests in the
Borrower) (a) the net income (or net loss) of such Person during such
Period PLUS (b) all amounts treated as expenses for depreciation, Interest
Expense and the amortization of intangibles of any kind to the extent
included in the determination of such net income (or loss), PLUS (c) all
accrued taxes on or measured by income to the extent included in the
determination of such net income (or loss); PROVIDED, HOWEVER, that net
income (or loss) shall be computed for these purposes without giving effect
to extraordinary losses or extraordinary gains.
"GROSS ASSET VALUE" means, with respect to the Borrower, the REIT and
their respective Subsidiaries on a consolidated basis, and without double
counting any item, the sum of: (a) the Borrower's, REIT's, or their
respective Subsidiaries' Adjusted EBITDA in respect of Qualified Properties
for the prior four calendar quarter period through the end of
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the most recent quarter, capitalized at the Apartment Property Cap Rate,
PLUS (b) the Borrower's, REIT's, or their respective Subsidiaries' share of
Adjusted EBITDA in respect of Unqualified Properties for the prior four
calendar quarter period through the end of the most recent quarter,
capitalized at the Apartment Property Cap Rate, PLUS (c) an amount equal to
the EBITDA of the Management Entities from the commencement of the prior
calendar quarter period annualized and then multiplied by 6.5, PLUS (d) all
cash (including Restricted Cash) and the fair market value of all Cash
Equivalents held as of the last day of such quarter. For purposes of the
definition of Gross Asset Value with respect to any Stabilized Qualified
Property which has been owned for fewer than four Calendar Quarters,
Adjusted EBITDA shall be adjusted in respect of such Property by
annualizing the Net Operating Income for the one, two or three preceding
Stabilized calendar quarters, as applicable.
"IMPUTED CAPITAL EXPENDITURES" means, for any four (4) consecutive
quarter period, an amount equal to the average number of apartment units
owned by the Borrower or the REIT or their Wholly Owned Subsidiaries during
such period, multiplied by (a) with respect to the units in Class A or B
market-rate apartment projects, an amount equal to $300 per apartment unit,
and (b) with respect to the units in Class C or affordable or
rent-restricted apartment projects, an amount equal to $400 per apartment
unit. With respect to apartment units in any Unqualified Property, the
calculation of Imputed Capital Expenditures shall include the number of
such units which is proportionate to the ownership interest of the Borrower
or its Wholly Owned Subsidiaries in the Unqualified Property. For any
period of less than four (4) consecutive quarters, the amount of Imputed
Capital Expenditures will be appropriately prorated.
"INTEREST EXPENSE" means, for any period, gross interest expense
incurred for the period (including all commissions, discounts, fees and
other charges in connection with standby letters of credit and similar
instruments), including any amounts as capitalized interest, for the
Borrower, the REIT and their respective Subsidiaries and the portion of the
upfront costs and expenses for Rate Contracts entered into by the Borrower,
the REIT and their respective Subsidiaries (to the extent not included in
gross interest expense) fairly allocated to such Rate Contracts as expenses
for such period, as determined in accordance with GAAP; provided, that, all
interest expense accrued by the Borrower, the REIT and their respective
Subsidiaries during such period, even if not payable on or before the
Maturity Date, shall be included within "Interest Expense."
Notwithstanding the foregoing, interest accrued under any Intra-Company
Debt shall not be included within "Interest Expense" for any purposes
hereof.
"INTRA-COMPANY DEBT" means Indebtedness (whether book-entry or
evidenced by a term, demand or other note or other instrument) owed by the
Borrower, the REIT or any of
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their respective Subsidiaries to the Borrower, the REIT or any of their
respective Subsidiaries.
"MANAGEMENT ENTITY" means any Subsidiary of the Borrower or the REIT
which is primarily engaged in the business of managing Multifamily
Residential Properties or other real estate projects, including, without
limitation, the following: NHP Management Company, a District of Columbia
corporation, Property Asset Management Services, L.P., a Delaware limited
partnership, Property Asset Management Services, Inc., a Delaware
corporation and Property Asset Management Services-CA, LLC, a California
limited liability company.
"MOODY'S" means Xxxxx'x Investors Service, a Delaware corporation, and
its successors and assigns.
"NET WORTH" means at any time the Gross Asset Value minus all
liabilities (as determined in accordance with GAAP) of the Borrower, the
REIT and their respective Subsidiaries, inclusive of their respective
shares of Indebtedness of any unconsolidated subsidiaries. Notwithstanding
the foregoing, the liabilities of the REIT shall include the redemption
amount payable under any preferred Stock of the REIT which is optionally or
mandatorily redeemable at any time on or prior to one year after the
Revolver Maturity Date (as defined in the Bank of America Facility
Documents)(or, if the Borrower elects to convert the Revolver (as defined
in the Bank of America Facility Documents) into the Term Loan (as defined
in the Bank of America Facility Documents), on or prior to one year after
the Term Loan Maturity Date (as defined in the Bank of America Facility
Documents). Upon the expiration or earlier termination of the Bank of
America Facility Documents, the liabilities of the REIT shall include the
redemption amount payable under any preferred Stock of the REIT which is
mandatorily redeemable at any time on or prior to two years after the date
as of which the Net Worth is being calculated.
"QUALIFIED PROPERTY" means a Property comprising a Multifamily
Residential Property which is 100% owned in fee simple title directly or
indirectly by the Borrower and its Wholly Owned Subsidiaries.
"RATE CONTRACTS" means interest rate and currency swap agreements,
cap, floor and collar agreements, interest rate insurance, currency spot
and forward contracts and other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange
rates.
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"RESTRICTED CASH" means any cash pledged by the Borrower, the REIT or
any of their respective Subsidiaries to other lenders, as indicated in the
line item for "restricted cash" in the REIT's balance sheet from time to
time.
"S&P" means Standard & Poor's Ratings Group and its successors and
assigns.
"SCHEDULED AMORTIZATION" means, with respect to any Person, the sum,
as of any date of determination, of the current portion (I.E., such portion
as is scheduled to be paid by the obligor thereof within 12 months from the
date of determination) of all regularly scheduled amortization payments due
on such Person's long-term fully amortizing mortgage Indebtedness
(exclusive of balloon payments).
"STABILIZED" means, with respect to any Qualified Property and as of
any date of determination, the date on which the occupancy level is at
least eighty-five percent (85%) for the most recent complete quarter.
"STOCK" means all shares, options, warrants, interests, participations
or other equivalents (regardless of how designated) of or in a corporation
or equivalent entity, whether voting or nonvoting, including common stock,
preferred stock, perpetual preferred stock or any other "equity security"
(as such term is defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934).
"SUBSIDIARY" of a Person means any corporation, association,
partnership, joint venture, trust or other business entity of which more
than fifty percent (50%) of the Stock or other equity or beneficial
interests (in the case of Persons other than corporations) is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof (regardless of whether
such Stock or other interests are entitled to voting rights). As of the
date hereof, the Organizational Chart lists all of the Subsidiaries of the
REIT and the Borrower.
"TOTAL INDEBTEDNESS" means as of any date of determination and in
respect of any Person, all outstanding Indebtedness, and in the case of
clause (iii) below, Indebtedness available to be drawn, of a Person, and
shall include, without limitation: (i) such Person's share of the
Indebtedness of any partnership or joint venture in which such Person
directly or indirectly holds any interest; (ii) any recourse or contingent
obligations, directly or indirectly, of such Person with respect to any
Indebtedness of such partnership or joint venture in excess of its
proportionate share and (iii) such Person's liability in respect of letters
of credit, whether such liability is contingent or fixed (such liability to
be determined on the assumption that all conditions for drawing upon such
letters of credit have been
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complied with). Notwithstanding the foregoing, Intra-Company Debt shall be
excluded from the calculation of "Total Indebtedness" but shall not
otherwise be excluded as Indebtedness for any other purpose hereof.
"UNQUALIFIED PROPERTY" means the Property comprising a Multifamily
Residential Property the fee simple interest in which is not 100% owned or
leased, directly or indirectly, by the Borrower and/or its Wholly Owned
Subsidiaries.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of the Borrower or the
REIT one hundred percent (100%) of the Stock or other equity or other
beneficial interests (in the case of Persons other than corporations) of
which is owned directly or indirectly by (A) the Borrower and/or (B) the
REIT; provided, however, that where such term is qualified with respect to
a specific Person (e.g., "Wholly Owned Subsidiary of the REIT") such term
means a Subsidiary one hundred percent (100%) of the Stock or other equity
or other beneficial interests (in the case of Persons other than
corporations) of which is owned directly or indirectly by the specified
Person.
SECTION 13.03(b) COMPLIANCE WITH DEBT SERVICE COVERAGE RATIOS.
(1) The AIMCO Parties shall at all times maintain the Aggregate
Debt Service Coverage Ratio for the Trailing 12 Month Period so that
it is not less than 145%.
(2) The AIMCO Parties shall at all times maintain the Aggregate
Debt Service Coverage Ratio for the Trailing Three Month Period so
that it is not less than 135%.
SECTION 13.03(c) COMPLIANCE WITH LOAN TO VALUE RATIOS. The AIMCO
Parties shall at all times maintain the Aggregate Loan to Value Ratio for
the Trailing 12 Month Period so that it is not greater than 60%.
SECTION 13.03(d) COMPLIANCE WITH CONCENTRATION TEST.
(1) The AIMCO Parties shall at all times maintain, or cause the
maintenance of, the Collateral so that the aggregate Valuations of any
group of Mortgaged Properties (excluding the Elm Creek Property) and
Lakehaven Properties (and, for these purposes, the Lakehaven
Properties shall be considered as one Multifamily Residential Property
with a Valuation equal to the aggregate Valuation of the Lakehaven
Notes) located within a one mile radius shall not exceed 25% of the
aggregate Valuations of all the Mortgaged Properties and Lakehaven
Notes.
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(2) The AIMCO Parties shall at all times maintain, or cause the
maintenance of, the Collateral so that the Valuation of any one
Mortgaged Property (excluding the Elm Creek Property and the Lakehaven
Notes) shall not exceed 20% of the aggregate Valuations of all
Mortgaged Properties and the Lakehaven Notes.
SECTION 13.03(e) COMPLIANCE WITH REIT'S NET WORTH TEST. The REIT
shall at all times maintain its Net Worth so that it is not less than
$750,000,000.
SECTION 13.03(f) COMPLIANCE WITH REIT'S CONSOLIDATED TOTAL
INDEBTEDNESS TO GROSS ASSET VALUE RATIO. The REIT shall not permit the
ratio of Consolidated Total Indebtedness to Gross Asset Value to exceed 55%
at any time.
SECTION 13.03(g) COMPLIANCE WITH REIT'S CONSOLIDATED EBITDA TO
INTEREST RATIO. The REIT shall not permit the Consolidated EBITDA to
Interest Ratio computed for any fiscal quarter or year to be less than
225%.
SECTION 13.03(h) COMPLIANCE WITH REIT'S CONSOLIDATED EBITDA TO FIXED
CHARGES RATIO. The REIT shall not permit the Consolidated EBITDA to Fixed
Charges Ratio computed for any fiscal quarter or year to be less than 200%.
SECTION 13.04. COVENANTS OF THE LENDER.
SECTION 13.04(a) CAP RATES. The Lender shall determine Cap Rates for
the Mortgaged Properties and Lakehaven Properties approximately once each
year. The Lender shall determine the Cap Rates in its sole and absolute
discretion, on the basis of its internal survey and analysis of cap rates
for comparable sales in the vicinity of the Mortgaged Properties and the
Lakehaven Properties, with such adjustments as the Lender deems appropriate
in its sole and absolute discretion and shall not be obligated to rely on
any information provided by the AIMCO Parties. The Lender shall have the
right to select additional Cap Rates during the year at any time the Lender
determines that changed market or property conditions warrant such action.
SECTION 13.04(b) VALUATIONS.
(1) The Lender shall perform a Valuation for each of the
Mortgaged Properties and the Lakehaven Notes, and a determination of
the Aggregate Debt Service Coverage Ratios and Aggregate Loan to Value
Ratio for the Trailing 12 Month Period (all of which Valuations and
determinations shall be binding and conclusive on the AIMCO Parties,
absent manifest error and except as otherwise provided in paragraph
(2)) once each calendar quarter, within 20 Business Days after
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the AIMCO Parties have delivered to the Lender the reports required in
Section 13.01(d)(1) and (2). The Lender shall have the right to
perform additional Valuations and determinations at other times during
the year (i) in connection with a Request, or (ii) at any time the
Lender determines that changed market or property conditions warrant
such action. The Lender shall deliver to the Borrower a notice
showing the Valuation for each Mortgaged Property and the Lakehaven
Notes, promptly after it is completed.
(2) If the Borrower disagrees with the Lender's Valuation of any
Mortgaged Property or Lakehaven Note, and the Valuation was determined
on the basis of a Cap Rate (under clause (b) (or, for a Lakehaven
Note, clause (iii)) of the definition of "Valuation" rather than on an
Appraisal or other method (under clause (a)(or, for a Lakehaven Note,
clauses(i) or (ii)) of the definition of "Valuation"), the Borrower
shall have the right to substitute for the Cap Rate determined by the
Lender a new Cap Rate based on a cap rate study conducted by an
appraiser, provided the Borrower gives notice to the Lender of its
desire to substitute a new Cap Rate for the Lender's Cap Rate within
15 Business Days after the Borrower receives the Lender's notice of
the Lender's Valuation. In such event, the Borrower and the Lender
shall determine the Cap Rate in accordance with the following
procedure:
(A) the Lender shall give the Borrower a list of Lender-approved
appraisers for the local market in which the the
Multifamily Residential Property is located within 10
Business Days after the date on which the Borrower gives the
Lender its notice;
(B) the Borrower shall select an appraiser within five Business
Days after the date on which the Lender gives the Borrower
the list of Lender-approved appraisers;
(C) the Lender shall engage the appraiser selected by the
Borrower pursuant to clause (B) to perform the cap rate
study within 10 Business Days after the date on which the
Borrower makes its selection; and
(D) the Borrower shall pay all fees and expenses of obtaining
the cap rate study.
If the Borrower elects to substitute a new Cap Rate for the Lender's
Cap Rate, the new Cap Rate shall be used to determine the Valuation
for the Mortgaged Property or Lakehaven Note, and, until the earlier
of (i) the 30th day after the date on which
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the appraiser is engaged by the Lender or (ii) the date on which the
new Cap Rate is determined, the Valuation of the Mortgaged Property or
Lakehaven Note in effect immediately prior to the Lender's Valuation
shall continue to be in effect. In the event the new Cap Rate is not
determined on or before the 30th day after the date on which the
appraiser is engaged by the Lender, then, commencing on such 30th day,
and continuing until the new Cap Rate is determined, the Valuation
based on the Lender's determination of the Cap Rate shall be in
effect.
SECTION 13.04(c) INTEREST ON CASH COLLATERAL. If the Borrower has
posted Substituted Cash Collateral or Cash Collateral with the Lender under
the terms of this Agreement, and no Event of Default has occurred and is
continuing, then the Lender shall pay to the Borrower, at least annually,
all interest accruing on the Substituted Cash Collateral and Cash
Collateral.
SECTION 13.04(d) CONFIDENTIALITY. The Lender covenants, for itself
and its successors, assigns, agents and representatives, to (i) keep
confidential all confidential, proprietary and/or non-public information,
identified as such and provided by the Borrower, the REIT or any other
AIMCO Party to the Lender or its successors, assigns, agents or
representatives pursuant to, or in connection with, this Agreement and (ii)
comply with all applicable securities laws in connection therewith. The
AIMCO Parties acknowledge that such information may be delivered to the
successors, assigns agents and representatives of the Lender, provided that
such successors, assigns, agents and representatives agree to be bound by
the provisions of this Section.
ARTICLE XIV
FEES
SECTION 14.01. FEE DEFINITIONS. For all purposes of this Agreement, the
following terms shall have the respective meanings set forth below:
"STANDBY FEE" means, for each calendar month, the product obtained by
multiplying (i) 1/12, by (ii) 22 basis points, by (iii) the average daily
Unused Capacity during the month.
"UNUSED CAPACITY" means, for any specified date, the excess (if any)
of--
(a) the Maximum Credit Commitment in effect on the specified
date, over
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(b) the aggregate unpaid principal balance of the Advances
Outstanding on the specified date.
SECTION 14.02. STANDBY FEE. Commencing on the 181st day after the Initial
Closing Date (the "STANDBY FEE COMMENCEMENT DATE"), the Borrower shall pay the
Standby Fee to the Lender for each month during the Term of this Agreement, in
arrears, on the first Business Day following the end of the month, except that
the Standby Fee for the last month during the Term of this Agreement shall be
paid on the last day of the Term of this Agreement. If the Standby Fee
Commencement Date is not the first day of a calendar month, the Standby Fee
payable for the calendar month in which the Standby Fee Commencement Date occurs
shall be prorated as of the Standby Fee Commencement Date.
SECTION 14.03. ORIGINATION FEES. The Borrower shall pay to the Lender an
origination fee (the "ORIGINATION FEE") equal to $255,000 (which is equal to the
product obtained by multiplying (i) the Maximum Credit Commitment on the Initial
Closing Date ($50,000,000), by (ii) 51 basis points). The Borrower shall pay
the Origination Fee on the Initial Closing Date.
SECTION 14.04. DUE DILIGENCE FEES.
SECTION 14.04(a) INITIAL DUE DILIGENCE FEES. The Borrower shall pay
to the Lender due diligence fees (including legal fees and expenses
relating to due diligence and the closing of this Agreement and the Initial
Advance) (the "INITIAL DUE DILIGENCE FEES") with respect to the Initial
Mortgaged Properties equal to the product obtained by multiplying --
(1) $16,000 per Initial Mortgaged Property (and, for these
purposes only, the Lakehaven Notes shall be deemed to
constitute two separate Initial Mortgaged Properties), by
(2) the number of Initial Mortgaged Properties.
The Borrower has previously paid to the Lender the Initial Due Diligence
Fees.
SECTION 14.04(b) ADDITIONAL DUE DILIGENCE FEES FOR ADDITIONAL
COLLATERAL. The Borrower shall pay to the Lender additional due diligence
fees (the "ADDITIONAL COLLATERAL DUE DILIGENCE FEES") with respect to each
Additional Mortgaged Property equal to the sum of (i) $1,000 and (ii) the
actual out-of-pocket expenses incurred by the Lender, as determined by the
Lender, in connection with all due diligence activities which the Lender
deems necessary in connection with the addition of the Additional Mortgaged
Property to the Collateral Pool. The Borrower shall pay the Additional
Collateral Due Diligence Fees for
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the Additional Mortgaged Property to the Lender on the date on which it
submits the Collateral Addition Request for the addition of the Additional
Mortgaged Property to the Collateral Pool, except that, if, at such time,
the Lender can only estimate the amount of the Additional Collateral Due
Diligence Fees, the Borrower shall pay such estimate and the Lender shall
reconcile such estimate with the actual expenses once they are known.
SECTION 14.05. DOCUMENT FEES. The Borrower shall pay to the Lender
document certification fees (the "DOCUMENT CERTIFICATION FEES") equal to the
product obtained by multiplying--
(a) $25.00, by
(b) the number of Loan Documents certified by Xxxxxx Xxx.
The Borrower shall pay the Document Certification Fees to the Lender on the
Initial Closing Date (with respect to the Loan Documents certified on the
Initial Closing Date) and on each Closing Date thereafter (with respect to the
Loan Documents, if any, certified on the Closing Date). The Borrower shall also
pay to the Lender a monthly document custody fee (the "DOCUMENT CUSTODY FEE")
equal to the product obtained by multiplying--
(a) $2.00, by
(b) the number of Loan Documents held in custody by Xxxxxx Mae during
the month.
The Document Custody Fee shall be paid monthly, in arrears, on the first day of
each month during the Term of this Agreement.
SECTION 14.06. LEGAL FEES AND EXPENSES.
SECTION 14.06(a) INITIAL LEGAL FEES. The Borrower shall pay to the
Lender all actual out-of-pocket legal fees and expenses incurred by the
Lender and by Xxxxxx Xxx in connection with the preparation and negotiation
of this Agreement, the other Loan Documents executed on the Initial Closing
Date and the closing of the Initial Advance. The Borrower shall pay the
legal fees and expenses to the Lender on the Initial Closing Date.
SECTION 14.06(b) ADDITIONAL LEGAL FEES AND EXPENSES FOR ADDITIONAL
COLLATERAL. The Borrower shall pay to the Lender, with respect to each
Additional Mortgaged Property, the sum of (i) $8,000, and (ii) the actual
out-of-pocket legal fees and expenses incurred by Xxxxxx Mae (but not the
Lender) in connection with the preparation and negotiation of the
Collateral Addition Loan Documents executed on the Closing Date for the
addition of the Additional Mortgaged Property and the closing of the
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addition of the Additional Mortgaged Property to the Collateral Pool. The
Borrower shall pay the legal fees and expenses to the Lender on the Closing
Date for the addition of the Additional Mortgaged Property to the
Collateral Pool.
SECTION 14.07. MBS-RELATED COSTS. The Borrower shall pay to the Lender,
within 30 days after demand, all fees and expenses incurred by the Lender or
Xxxxxx Xxx in connection with the issuance of any MBS backed by an Advance,
including the fees charged by Depository Trust Company and State Street Bank or
any successor fiscal agent or custodian.
SECTION 14.08. OTHER FEES. The Borrower shall pay the following additional
fees and payments, if and when required pursuant to the terms of this Agreement:
(a) The Collateral Addition Fee, pursuant to Section 6.03(b), in
connection with the addition of an Additional Mortgaged Property to the
Collateral Pool pursuant to Article VI;
(b) The Release Price, pursuant to Section 7.03(b), in connection
with the release of a Mortgaged Property from the Collateral Pool pursuant
to Article VII;
(c) The Release Fee, pursuant to Section 7.03(c), in connection with
the release of a Mortgaged Property from the Collateral Pool pursuant to
Article VII;
(d) The Revolving Facility Termination Fee, pursuant to Section
9.03(b) in connection with a complete or partial termination of the
Revolving Facility pursuant to Article IX; and
(e) The Credit Facility Termination Fee, pursuant to Section
10.03(b), in connection with the termination of the Credit Facility
pursuant to Article X.
ARTICLE XV
CASH MANAGEMENT
The Borrower, the Initial Owners and the Lender shall execute the Cash
Management Agreement on the Initial Closing Date.
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ARTICLE XVI
EVENTS OF DEFAULT
SECTION 16.01. 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 an AIMCO Party, 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:
SECTION 16.01(a) the occurrence of a default under any Loan Document
beyond any cure period set forth therein; or
SECTION 16.01(b) the failure by any AIMCO Party to pay when due any
amount payable by the AIMCO Party under any Note, any Security Instrument,
this Agreement or any other Loan Document, including any fees, costs or
expenses; or
SECTION 16.01(c) the failure by any AIMCO Party to perform or observe
any covenant set forth in Sections 13.01(a), (b), (c), (f), (g), (h), (j),
(o), (p), (r) to (t) inclusive, (w) to (y) inclusive, (aa) or (bb) or
Sections 13.02(a) to (g) inclusive, or (j) to (s) inclusive; or
SECTION 16.01(d) the failure by any AIMCO Party to perform or observe
any covenant set forth in Sections 13.01(d), (e) or (k) to (m) inclusive,
or Section 13.02(i) within 10 days after receipt of notice from the Lender;
or
SECTION 16.01(e) the failure by any AIMCO Party to perform or observe
any covenant set forth in Section 13.01(i)or Section 13.02(h) within 20
days after receipt of notice from the Lender; or
SECTION 16.01(f) any warranty, representation or other written
statement made by or on behalf of an AIMCO Party contained in this
Agreement, any other Loan 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
SECTION 16.01(g)(1) any Indebtedness in an aggregate amount in excess
of $1,000,000 incurred or assumed by any 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
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applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness or (2) any Indebtedness in an aggregate
amount in excess of the Indebtedness Ceiling Amount incurred or assumed by
any other AIMCO Party, (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
(and, for these purposes, the term "INDEBTEDNESS CEILING AMOUNT" means the
lesser of (i) $5,000,000 or (ii) the lowest amount of Indebtedness of the
REIT or the Borrower a default in the payment of which would result in the
occurrence of an event of default under any Major Credit Facility
Document); or
SECTION 16.01(h) An AIMCO Party 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 the AIMCO
Party has no liability or obligations under this Agreement or any other
Loan 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 an AIMCO Party 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 the AIMCO Party, or of all
or a substantial part of the property, domestic or foreign, of the AIMCO
Party 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 the
AIMCO Party (including an order for relief under such Federal bankruptcy
laws) shall be entered; or
SECTION 16.01(i) if any provision of this Agreement or any other Loan
Document or the lien and security interest purported to be created
hereunder or under any Loan Document shall at any time for any reason cease
to be valid and binding in accordance with its terms on any AIMCO Party, 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
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created hereunder or under any other Loan Document shall be contested by
any AIMCO Party seeking to establish the invalidity or unenforceability
hereof or thereof, or any AIMCO Party shall deny that it has any further
liability or obligation hereunder or thereunder; or
SECTION 16.01(j) the execution by any 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 Mortgaged
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 the Owner free from
encumbrances, or (z) if the Owner does not furnish to the Lender upon
request the contracts, bills of sale, statements, receipted vouchers and
agreements, or any of them, under which the Owner claims title to such
materials, fixtures, or articles; or
SECTION 16.01(k) the failure, upon request, to furnish to the Lender
the results of official searches made by any Governmental Authority, or the
failure by any AIMCO Party to comply with any requirement of any
Governmental Authority within 30 days after written notice of such
requirement shall have been given to the AIMCO Party by such Governmental
Authority; provided that, if action is commenced and diligently pursued by
the AIMCO Party within such 30 days, then the AIMCO Party shall have an
additional 30 days to comply with such requirement; or
SECTION 16.01(l) a dissolution or liquidation for any reason (whether
voluntary or involuntary) of any AIMCO Party; or
SECTION 16.01(m) if a REIT Sub shall fail to qualify as a "qualified
REIT subsidiary" or if the REIT shall fail to qualify as a real estate
investment trust under Subchapter M of the Internal Revenue Code; or
SECTION 16.01(n)(1) any judgment against any Owner, any attachment or
other levy against any portion of any Owner's assets with respect to a
claim in an amount in excess of $1,000,000 individually and/or in the
aggregate remains unpaid, unstayed on appeal, undischarged, unbonded, not
fully insured or undismissed for a period of 60 days or (2) any judgment
against any other AIMCO Party, any attachment or other levy against any
portion of any other AIMCO Party's assets with respect to a claim in an
amount in excess of the Judgment Ceiling Amount individually and/or in the
aggregate remains unpaid, unstayed on appeal, undischarged, unbonded, not
fully insured or undismissed for a period of 60 days (and, for these
purposes, the term "JUDGMENT CEILING AMOUNT" means the lesser of (i)
$5,000,000 or (ii) the lowest amount of a judgment against the REIT or the
Borrower a
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default in the payment of which would result in the occurrence of an event
of default under any Major Credit Facility Document); or
SECTION 16.01(o) the failure by any Owner to maintain or cause to be
maintained insurance with respect to each Mortgaged Property or a Lakehaven
Property in accordance with the terms of the Security Instrument with
respect to each such Mortgaged Property or the mortgage securing a
Lakehaven Note; or
SECTION 16.01(p) the failure by any Owner to perform or observe the
covenants with respect to Hazardous Materials or Hazardous Materials Laws
set forth in any Security Instruments or in any other Loan Document
including, the covenants set forth in Paragraph D of the Rider to
Multifamily Instrument constituting a part of each Security Instrument; or
SECTION 16.01(q) the failure by any Owner to cause the Gross Revenues
with respect to any Mortgaged Property or the debt service with respect to
the Lakehaven Notes to be deposited into the applicable Pledgee Account in
accordance with the requirements of the Cash Management Agreement; or
SECTION 16.01(r) the failure of the Borrower to perform or observe
any of the Financial Covenants, which failure shall continue for a period
of 30 days after the date on which the Borrower receives a notice from the
Lender specifying the failure; PROVIDED, HOWEVER, that if the Borrower adds
Cash Collateral to the Collateral Pool, pursuant to documents satisfactory
to the Lender, and in an amount equal to the Minimum Cure Amount (as
hereinafter defined), then such failure shall not constitute an Event of
Default unless such failure is not cured by the Borrower within 90 days
after receipt of notice from the Lender identifying such failure (and, upon
such a cure, any portion of the Cash Collateral may be released if,
immediately after giving effect to the release, each of the conditions set
forth in Section 7.03(a) shall have been satisfied and no Event of Default
then exists). The "MINIMUM CURE AMOUNT" means the minimum amount of
Advances Outstanding which, if repaid, would cure the failure. In
determining whether the Borrower has cured the default within the 90-day
period specified above, the Cash Collateral shall not be taken into
account; or
SECTION 16.01(s) the occurrence of a default, after the expiration of
any applicable grace period, under any Major Credit Facility Document; or
SECTION 16.01(t) the failure by any AIMCO Party to perform or observe
any term, covenant, condition or agreement hereunder, other than as set
forth in subsections (a) through (s) above, or in any other Loan Document,
within 30 days after receipt of notice from the Lender identifying such
failure; PROVIDED, HOWEVER, that if in the Lender's judgment, (i) the
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cure of such failure requires a period in excess of 30 days, (ii) such
failure will not result in a Material Adverse Effect upon the REIT, the
Borrower and their respective Subsidiaries, taken as a whole, and (iii)
corrective action is instituted by the AIMCO Party 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 the
AIMCO Party within 60 days after receipt of notice from the Lender
identifying such failure.
ARTICLE XVII
REMEDIES
SECTION 17.01. REMEDIES; WAIVERS.
SECTION 17.01(a) Upon the occurrence and the continuance of an Event
of Default, the Lender shall have the right to pursue any remedies
available to it under any of the Loan Documents.
SECTION 17.01(b) Upon the occurrence and the continuance of an Event
of Default, the Lender shall have the right to pursue all remedies
available to it at law or in equity, including obtaining specific
performance and injunctive relief.
SECTION 17.01(c) The Lender shall have the right, to be exercised in
its complete discretion, to waive any breach hereunder (including the
occurrence of an Event of Default), by a writing setting forth the terms,
conditions, and extent of such waiver signed by the Lender and delivered to
the Borrower. Unless such writing expressly provides to the contrary, any
waiver so granted shall extend only to the specific event or occurrence
which gave rise to the waiver and not to any other similar event or
occurrence which occurs subsequent to the date of such waiver.
SECTION 17.01(d) The Borrower shall pay all fees, costs, charges or
expenses (including the reasonable fees and expenses of attorneys',
accountants and other experts) incurred by the Lender in connection with
the administration or enforcement of, or preservation of rights or remedies
under, this Agreement or any other Loan Documents or in connection with the
foreclosure upon, sale of or other disposition of any Collateral granted
pursuant to the Loan Documents.
SECTION 17.01(e) If any AIMCO Party fails to perform the covenants
and agreements contained in this Agreement or any of the other Loan
Documents, then the Lender at the Lender's option may make such
appearances, disburse such sums and take such
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action as the Lender deems necessary, in its sole discretion, to protect
the Lender's interest, including (i) disbursement of reasonable attorney's
fees, (ii) entry upon the Mortgaged Property to make repairs and
Replacements, (iii) procurement of satisfactory insurance as provided in
paragraph 5 of the Security Instrument encumbering the Mortgaged Property,
and (iv) if the Security Instrument is on a leasehold, exercise of any
option to renew or extend the ground lease on behalf of the Owner and the
curing of any default of the Owner in the terms and conditions of the
ground lease. Any amounts disbursed by the Lender pursuant to this
paragraph (d), with interest thereon, shall become additional indebtedness
of the Borrower secured by the Loan Documents. Unless the Borrower and the
Lender agree to other terms of payment, such amounts shall be immediately
due and payable and shall bear interest from the date of disbursement at
the weighted average of the interest rates of each Advance, as determined
by Lender, unless collection from the Borrower of interest at such rate
would be contrary to applicable law, in which event such amounts shall bear
interest at the highest rate which may be collected from the Borrower under
applicable law. Nothing contained in this paragraph (e) shall require the
Lender to incur any expense or take any action hereunder.
SECTION 17.02. NO REMEDY EXCLUSIVE. Unless otherwise expressly provided,
no remedy herein conferred upon or reserved is intended to be exclusive of any
other available remedy, but each remedy shall be cumulative and shall be in
addition to other remedies given under the Loan Documents or existing at law or
in equity.
SECTION 17.03. NO WAIVER. No delay or omission to exercise any right or
power accruing under any Loan Document upon the happening of any Event of
Default or Potential Event of Default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient.
SECTION 17.04. NO NOTICE. In order to entitle the Lender to exercise any
remedy reserved to the Lender 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 this Agreement or any of the other Loan Documents.
SECTION 17.05. APPLICATION OF PAYMENTS. Except as otherwise expressly
provided in the Loan Documents, and unless applicable law provides otherwise,
all payments received by the Lender from any of the AIMCO Parties under the Loan
Documents shall be applied by the Lender against any amounts then due and
payable under the Loan Documents by any of the AIMCO Parties, in any order of
priority that the Lender may determine.
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ARTICLE XVIII
RIGHTS OF XXXXXX XXX
SECTION 18.01. SPECIAL POOL PURCHASE CONTRACT. The AIMCO Parties
acknowledge that Xxxxxx Mae is entering into an agreement with the Lender (the
"SPECIAL POOL PURCHASE CONTRACT"), pursuant to which, INTER ALIA, (i) the Lender
shall agree to assign all of its rights under this Agreement to Xxxxxx Xxx, (ii)
Xxxxxx Xxx shall accept the assignment of the rights, (iii) subject to the
terms, limitations and conditions set forth in the Special Pool Purchase
Contract, Xxxxxx Mae shall agree to purchase each Advance issued under this
Agreement by issuing to the Lender a Xxxxxx Xxx MBS, in the amount and for a
term equal to the Advance purchased and backed by an interest in the Base
Facility Note or the Revolving Facility Note, as the case may be, and the
Collateral Pool securing the Notes, (iv) the Lender shall agree to assign to
Xxxxxx Mae all of the Lender's interest in the Notes and Collateral Pool
securing the Notes, and (v) the Lender shall agree to service the loans
evidenced by the Notes.
SECTION 18.02. ASSIGNMENT OF RIGHTS. The AIMCO Parties acknowledge and
consent to the assignment to Xxxxxx Xxx of all of the rights of the Lender under
this Agreement and all other Loan Documents, including the right and power to
make all decisions on the part of the Lender to be made under this Agreement and
the other Loan Documents, upon and subject to all of the terms and conditions
hereof and thereof, but Xxxxxx Mae, by virtue of this assignment, shall not be
obligated to perform the obligations of the Lender under this Agreement or the
other Loan Documents, except for the obligation to release Collateral to the
Borrower when the Loan Documents require such release.
SECTION 18.03. RELEASE OF COLLATERAL. The AIMCO Parties hereby acknowledge
that, after the assignment of Loan Documents contemplated in Section 18.02, the
Lender shall not have the right or power to effect a release of any Collateral
pursuant to Articles VII or X. The AIMCO Parties acknowledge that the Security
Documents provide for the release of the Collateral under Articles VII and X.
Accordingly, the AIMCO Parties shall not look to the Lender for performance of
any obligations set forth in Articles VII and X, but shall look solely to the
party secured by the Collateral to be released for such performance. The Lender
represents and warrants to the AIMCO Parties that the party secured by the
Collateral shall be subject to the release provisions contained in Articles VII
and X by virtue of this Section. The Lender shall cooperate in any reasonable
manner to effect any release required under this Agreement, but without any
obligation to expend any funds.
SECTION 18.04. REPLACEMENT OF LENDER. At the request of Xxxxxx Xxx, the
AIMCO Parties and the Lender shall agree to the assumption by another lender
designated by Xxxxxx Mae, of all of the obligations of the Lender under this
Agreement and the other Loan Documents, and/or
107
any related servicing obligations, and, at Xxxxxx Mae's option, the concurrent
release of the Lender from its obligations under this Agreement and the other
Loan Documents, and/or any related servicing obligations, and shall execute all
releases, modifications and other documents which Xxxxxx Mae determines are
necessary or desirable to effect such assumption. Notwithstanding the
foregoing, the AIMCO Parties' obligation to agree to the assumption shall be
conditioned upon the AIMCO Parties' receipt of a certificate from Xxxxxx Xxx
which offers the AIMCO Parties two choices of replacement lenders, and certifies
that the two choices are lenders in the DUS Program (or, if the DUS Program no
longer exists at such time, certifies that the two choices are qualified Xxxxxx
Mae servicers). Within 10 Business Days after the date on which the AIMCO
Parties receive Xxxxxx Mae's certificate, the AIMCO Parties shall select one of
the two choices, and the AIMCO Parties' choice shall become the replacement
lender. If the AIMCO Parties fail to make the choice within the 10-Business Day
period, Xxxxxx Mae shall have the right to select the replacement lender from
the two choices, and Xxxxxx Mae's choice shall become the replacement Lender,
without the necessity of further action on the part of any party (other than the
assumption by the replacement Lender of all of the obligations of the Lender
arising on and after the date on which it becomes the replacement Lender).
SECTION 18.05. XXXXXX MAE AND LENDER FEES AND EXPENSES. The AIMCO Parties
agree that any provision providing for the payment by any one or more of them of
fees, costs or expenses incurred or charged by the Lender pursuant to this
Agreement shall be deemed to provide for the payment by such AIMCO Party or
AIMCO Parties of all fees, costs and expenses incurred or charged by the Lender
or Xxxxxx Xxx in connection with the matter for which fees, costs or expenses
are payable.
SECTION 18.06. THIRD-PARTY BENEFICIARY. The AIMCO Parties hereby
acknowledge and agree that Xxxxxx Mae is a third party beneficiary of all of the
representations, warranties and covenants made by any AIMCO Party to, and all
rights under this Agreement conferred upon, the Lender, and, by virtue of its
status as third-party beneficiary and/or assignee of the Lender's rights under
this Agreement, Xxxxxx Xxx shall have the right to enforce all of the provisions
of this Agreement against the AIMCO Parties.
ARTICLE XIX
INSURANCE, REAL ESTATE TAXES AND REPLACEMENT RESERVES
SECTION 19.01. INSURANCE AND REAL ESTATE TAXES. Each Owner shall establish
funds for taxes, insurance premiums and certain other charges for each Mortgaged
Property in accordance with Uniform Covenant 2A of the Security Instrument for
each Mortgaged Property.
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SECTION 19.02. REPLACEMENT RESERVES. Each Owner shall execute the
Replacement Reserve Agreement and shall (unless waived by the Lender) make all
deposits for replacement reserves with respect to the Mortgaged Property which
it owns (or, with respect to the Owner of the Lakehaven Notes, the Lakehaven
Property) in accordance with the terms of the Replacement Reserve Agreement.
ARTICLE XX
MISCELLANEOUS PROVISIONS
SECTION 20.01. COUNTERPARTS. To facilitate execution, this Agreement may
be executed in any number of counterparts. It shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart, but it shall be
sufficient that the signature of, or on behalf of, each party, appear on one or
more counterparts. All counterparts shall collectively constitute a single
agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than the number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
SECTION 20.02. AMENDMENTS, CHANGES AND MODIFICATIONS. This Agreement may
be amended, changed, modified, altered or terminated only by written instrument
or written instruments signed by all of the parties hereto.
SECTION 20.03. PAYMENT OF COSTS, FEES AND EXPENSES.
(a) The Borrower shall pay on demand all costs, expenses and fees of
the Lender pursuant to this Agreement and any of the Loan Documents,
including the reasonable fees and expenses of counsel to the Lender with
respect to defending or participating in any litigation arising from the
administration or enforcement of this Agreement or any of the Loan
Documents. Any such fees and expenses of counsel incurred in enforcing a
judgment under this Agreement shall be recoverable separately from and in
addition to any other amount included in such judgment, and such counsels'
fees and expenses obligation is intended to be severable from the other
provisions of this Agreement and to survive and not be merged into any such
judgment.
(b) The Borrower shall pay on demand all expenses incurred by the
Lender in connection with the preparation and review of this Agreement, the
REIT's Registration Statement, or similar disclosure documents, including
fees payable to any rating agencies, any tax or governmental charge imposed
in connection with the issuance of the Notes and
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the fees and expenses of the Lender's counsel and accountants. The
foregoing shall also include fees and expenses relating to any (i)
amendments, consents or waivers to this Agreement or any of the Loan
Documents (whether or not any such amendments, consents or waivers are
entered into) or (ii) requests to evaluate any substitute or additional
Collateral or the release of any Collateral.
SECTION 20.04. PAYMENT PROCEDURE. All payments to be made to the Lender
pursuant to this Agreement or any of the Loan Documents shall be made in lawful
currency of the United States of America and in immediately available funds by
wire transfer to an account designated by the Lender before 2:00 p.m.
(Washington, D.C. time) on the date when due.
SECTION 20.05. PAYMENTS ON BUSINESS DAYS. In any case in which the date of
payment to the Lender or the expiration of any time period hereunder occurs on a
day which is not a Business Day, then such payment or expiration of such time
period need not occur on such date but may be made on the next succeeding
Business Day with the same force and effect as if made on the day of maturity or
expiration of such period, except that interest shall continue to accrue for the
period after such date to the next Business Day.
SECTION 20.06. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. NOTWITHSTANDING ANYTHING IN THE NOTES, THE SECURITY DOCUMENTS OR ANY OF
THE OTHER LOAN DOCUMENTS TO THE CONTRARY, EACH OF THE TERMS AND PROVISIONS, AND
RIGHTS AND OBLIGATIONS OF EACH AIMCO PARTY UNDER THE NOTES, AND EACH AIMCO PARTY
UNDER THE OTHER LOAN DOCUMENTS, SHALL BE GOVERNED BY, INTERPRETED, CONSTRUED AND
ENFORCED PURSUANT TO AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF
VIRGINIA(EXCLUDING THE LAW APPLICABLE TO CONFLICTS OR CHOICE OF LAW) EXCEPT TO
THE EXTENT OF PROCEDURAL AND SUBSTANTIVE MATTERS RELATING ONLY TO (1) THE
CREATION, PERFECTION AND FORECLOSURE OF LIENS AND SECURITY INTERESTS, AND
ENFORCEMENT OF THE RIGHTS AND REMEDIES, AGAINST THE MORTGAGED PROPERTIES, WHICH
MATTERS SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION IN WHICH THE MORTGAGED
PROPERTY IS LOCATED, (2) THE PERFECTION, THE EFFECT OF PERFECTION AND
NON-PERFECTION AND FORECLOSURE OF SECURITY INTERESTS ON PERSONAL PROPERTY (OTHER
THAN DEPOSIT ACCOUNTS), WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE
JURISDICTION DETERMINED BY THE CHOICE OF LAW PROVISIONS OF THE VIRGINIA UNIFORM
COMMERCIAL CODE AND (3) THE PERFECTION, THE EFFECT OF PERFECTION AND
NON-PERFECTION AND FORECLOSURE OF DEPOSIT ACCOUNTS, WHICH MATTERS SHALL BE
GOVERNED BY THE LAWS OF THE JURISDICTION IN WHICH THE DEPOSIT ACCOUNT IS
LOCATED. THE AIMCO PARTIES AGREE THAT ANY CONTROVERSY ARISING UNDER OR IN
RELATION TO THE NOTES, THE SECURITY
110
DOCUMENTS OR ANY OTHER LOAN DOCUMENT SHALL BE, EXCEPT AS OTHERWISE PROVIDED
HEREIN, LITIGATED IN VIRGINIA. THE LOCAL AND FEDERAL COURTS AND AUTHORITIES
WITH JURISDICTION IN VIRGINIA SHALL, EXCEPT AS OTHERWISE PROVIDED HEREIN, HAVE
JURISDICTION OVER ALL CONTROVERSIES WHICH MAY ARISE UNDER OR IN RELATION TO THE
LOAN DOCUMENTS, INCLUDING THOSE CONTROVERSIES RELATING TO THE EXECUTION,
JURISDICTION, BREACH, ENFORCEMENT OR COMPLIANCE WITH THE NOTES, THE SECURITY
DOCUMENTS OR ANY OTHER ISSUE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH
ANY OF THE LOAN DOCUMENTS. EACH AIMCO PARTY IRREVOCABLY CONSENTS TO SERVICE,
JURISDICTION, AND VENUE OF SUCH COURTS FOR ANY LITIGATION ARISING FROM THE
NOTES, THE SECURITY DOCUMENTS OR ANY OF THE OTHER LOAN DOCUMENTS, AND WAIVES ANY
OTHER VENUE TO WHICH IT MIGHT BE ENTITLED BY VIRTUE OF DOMICILE, HABITUAL
RESIDENCE OR OTHERWISE. NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT THE
LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS
AGAINST THE AIMCO PARTIES, AND AGAINST THE COLLATERAL IN ANY OTHER JURISDICTION.
INITIATING SUCH SUIT, ACTION OR PROCEEDING OR TAKING SUCH ACTION IN ANY OTHER
JURISDICTION SHALL IN NO EVENT CONSTITUTE A WAIVER OF THE AGREEMENT CONTAINED
HEREIN THAT THE LAWS OF VIRGINIA SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF THE
AIMCO PARTIES AND THE LENDER AS PROVIDED HEREIN OR THE SUBMISSION HEREIN BY THE
AIMCO PARTIES TO PERSONAL JURISDICTION WITHIN VIRGINIA. EACH AIMCO PARTY (I)
COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE
ARISING UNDER ANY OF THE LOAN DOCUMENTS TRIABLE BY A JURY AND (II) WAIVES ANY
RIGHT TO TRIAL BY JURY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST. THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH
ISSUE AS TO WHICH THE RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. FURTHER,
EACH AIMCO PARTY HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE LENDER
(INCLUDING, BUT NOT LIMITED TO, THE LENDER'S COUNSEL) HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, TO EACH AIMCO PARTY THAT THE LENDER WILL NOT SEEK TO ENFORCE THE
PROVISIONS OF THIS SECTION. THE FOREGOING PROVISIONS WERE KNOWINGLY, WILLINGLY
AND VOLUNTARILY AGREED TO BY THE AIMCO PARTIES UPON CONSULTATION WITH
INDEPENDENT LEGAL COUNSEL SELECTED BY THE AIMCO PARTIES' FREE WILL.
SECTION 20.07. SEVERABILITY. In the event any provision of this Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision
hereof.
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SECTION 20.08. NOTICES.
SECTION 20.08(a) MANNER OF GIVING NOTICE. Each notice, direction,
certificate or other communication hereunder (hereafter in this Section
referred to collectively as "notices" and referred to singly as a "notice")
which any party is required or permitted to give to the other party
pursuant to this Agreement shall be in writing and shall be deemed to have
been duly and sufficiently given if
(1) personally delivered with proof of delivery thereof (any
notice so delivered shall be deemed to have been received at the time
so delivered),
(2) sent by Federal Express (or other similar overnight courier)
designating morning delivery (any notice so delivered shall be deemed
to have been received on the Business Day it is delivered by the
courier unless delivered earlier by another method prescribed herein),
(3) sent by United States registered or certified mail, return
receipt requested, postage prepaid, at a post office regularly
maintained by the United States Postal Service (any notice so sent
shall be deemed to have been received on the Business Day it is
delivered), or
(4) sent by telecopier or facsimile machine which automatically
generates a transmission report that states the date and time of the
transmission, the length of the document transmitted, and the
telephone number of the recipient's telecopier or facsimile machine
(to be confirmed with a copy thereof sent in accordance with
paragraphs (1), (2) or (3) above within two Business Days) (any notice
so delivered shall be deemed to have been received (i) on the date of
transmission, if so transmitted before 5:00 p.m. (local time of the
recipient) on a Business Day, or (ii) on the next Business Day, if so
transmitted on or after 5:00 p.m. (local time of the recipient) on a
Business Day or if transmitted on a day other than a Business Day),
addressed to the parties at their respective Notice Addresses.
SECTION 20.08(b) CHANGE OF NOTICE ADDRESS. Any party may, by notice
given pursuant to this Section, change the person or persons and/or address
or addresses, or designate an additional person or persons or an additional
address or addresses, for its notices, but notice of a change of address
shall only be effective upon receipt. Each party agrees that it shall not
refuse or reject delivery of any notice given hereunder, that it shall
acknowledge, in writing, receipt of the same upon request by the other
party and that any notice rejected or refused by it shall be deemed for all
purposes of this Agreement to have
112
been received by the rejecting party on the date so refused or rejected, as
conclusively established by the records of the U.S. Postal Service, the
courier service or telecopier or facsimile machine.
SECTION 20.09. FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS.
SECTION 20.09(a) FURTHER ASSURANCES. To the extent permitted by law,
the parties hereto agree that they shall, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such supplements hereto and such further instruments as the
Lender or the AIMCO Parties may request and as may be required in the
opinion of the Lender or its counsel to effectuate the intention of or
facilitate the performance of this Agreement or any Loan Document.
SECTION 20.09(b) FURTHER DOCUMENTATION. Without limiting the
generality of subsection (a), in the event any further documentation or
information is required by the Lender to correct patent mistakes in the
Loan Documents, materials relating to the Title Insurance Policies or the
funding of the Advances, the AIMCO Parties shall provide, or cause to be
provided to the Lender, at their cost and expense, such documentation or
information. The AIMCO Parties shall execute and deliver to the Lender
such documentation, including any amendments, corrections, deletions or
additions to the Notes, the Security Instruments or the other Loan
Documents as is required by the Lender.
SECTION 20.09(c) COMPLIANCE WITH INVESTOR REQUIREMENTS. Without
limiting the generality of subsection (a), the AIMCO Parties shall do
anything necessary to comply with the requirements of the Lender in order
to enable the Lender to sell the MBS backed by an Advance; provided,
however, that the AIMCO Parties shall not be required to do anything under
this subsection that has the effect of changing the economic terms of the
transactions described in this Agreement.
SECTION 20.10. TERM OF THIS AGREEMENT. This Agreement shall continue in
effect until the Credit Facility Termination Date.
SECTION 20.11. ASSIGNMENTS; THIRD-PARTY RIGHTS. No AIMCO Party shall
assign this Agreement, or delegate any of its obligations hereunder, without the
prior written consent of the Lender. The Lender may assign its rights and
obligations under this Agreement separately or together, without the AIMCO
Parties' consent, only to Xxxxxx Xxx, but may not delegate its obligations under
this Agreement unless required to do so pursuant to Section 18.04.
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SECTION 20.12. HEADINGS. Article and Section headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 20.13. GENERAL INTERPRETIVE PRINCIPLES. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, (i) the terms defined in Article I, Section 13.03, Section
14.01 and elsewhere in this Agreement have the meanings assigned to them in this
Agreement and include the plural as well as the singular, and the use of any
gender herein shall be deemed to include the other genders; (ii) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with GAAP; (iii) references herein to "Articles," "Sections,"
"subsections," "paragraphs" and other subdivisions without reference to a
document are to designated Articles, Sections, subsections, paragraphs and other
subdivisions of this Agreement; (iv) 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; (v) 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; (vi) 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 (vii) the
word "including" means "including, but not limited to."
SECTION 20.14. INTERPRETATION. The parties hereto acknowledge that each
party and their respective counsel have participated in the drafting and
revision of this Agreement and the Loan 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 Loan Documents or any
amendment or supplement or exhibit hereto or thereto.
SECTION 20.15. STANDARDS FOR DECISIONS, ETC. If the Lender's approval is
required for any matter hereunder, such approval may be granted or withheld in
the Lender's sole and absolute discretion. If the Lender's designation,
determination, selection, estimate, action or decision is required, permitted or
contemplated hereunder, such designation, determination, selection, estimate,
action or decision shall be made in the Lender's sole and absolute discretion.
SECTION 20.16. DECISIONS IN WRITING. Any approval, designation,
determination, selection, action or decision of the Lender must be in writing to
be effective.
SECTION 20.17. WAIVER OF CONDITIONS. Any condition precedent to an
obligation of the Lender under this Agreement may be waived by the Lender in its
sole and absolute discretion, but such waiver must be in writing to be
effective.
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SECTION 20.18. CONTRIBUTION AGREEMENT. On the Initial Closing Date, the
Borrower and the Owners shall execute an Indemnity and Contribution Agreement in
the form attached as EXHIBIT JJ to this Agreement.
SECTION 20.19. REFERENCES TO LOAN DOCUMENTS. Except where the context
otherwise requires, any reference to any Loan Document in this Agreement or in
any other Loan Document shall refer to such Loan Document, as such Loan Document
may be amended, supplemented or otherwise modified from time to time.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
AIMCO PARTIES
THE REIT:
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a
Maryland corporation
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------
Xxxxxxxx X. Xxxxx
Vice President
THE BORROWER:
AIMCO PROPERTIES, L.P., a Delaware limited
partnership
By: AIMCO-GP, INC., a Delaware corporation, its
sole general partner
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------
Xxxxxxxx X. Xxxxx
Assistant Secretary
THE OWNERS:
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AIMCO/BLUFFS, L.L.C., a Delaware limited liability
company
By: AIMCO HOLDINGS, L.P., a Delaware limited
partnership, its managing member
By: AIMCO HOLDINGS QRS, INC., a Delaware
corporation, its sole general partner
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------
Xxxxxxxx X. Xxxxx
Assistant Secretary
[Signatures continued on following page]
117
AIMCO CHESAPEAKE, L.P., a Delaware limited
partnership
By: AIMCO HOLDINGS, L.P., a Delaware limited
partnership, its sole general partner
By: AIMCO HOLDINGS QRS, INC., a Delaware
corporation, its sole general partner
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------
Xxxxxxxx X. Xxxxx
Assistant Secretary
AIMCO ELM CREEK, L.P., a Delaware limited
partnership
By: AIMCO HOLDINGS, L.P., a Delaware limited
partnership, its sole general partner
By: AIMCO HOLDINGS QRS, INC., a
Delaware corporation, its sole
general partner
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------
Xxxxxxxx X. Xxxxx
Assistant Secretary
AIMCO LOS ARBOLES, L.P., a Delaware limited
partnership
By: AIMCO HOLDINGS, L.P., a Delaware limited
partnership, its sole general partner
By: AIMCO HOLDINGS QRS, INC., a Delaware
corporation, its sole general partner
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------
Xxxxxxxx X. Xxxxx
Assistant Secretary
118
[Signatures continued on following page]
119
AIMCO LAKEHAVEN, L.P., a Delaware limited
partnership
By: AIMCO HOLDINGS, L.P., a Delaware limited
partnership, its sole general partner
By: AIMCO HOLDINGS QRS, INC., a Delaware
corporation, its sole general partner
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------
Xxxxxxxx X. Xxxxx
Assistant Secretary
Lender WASHINGTON MORTGAGE FINANCIAL GROUP,
LTD., A DELAWARE CORPORATION
By: /s/ G. Xxxxx Xxxxxx
--------------------------------
Name: G. Xxxxx Xxxxxx
Title: Vice President
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