LAND USE REGULATORY AGREEMENT
By and Among
PULASKI COUNTY PUBLIC FACILITIES BOARD
As Issuer
and
STATE STREET BANK AND TRUST COMPANY OF MISSOURI, N.A.
As Trustee
and
WATERTON RAINTREE, L.L.C.
As Borrower
Dated as of July 1, 1999
Relating to
Pulaski County Public Facilities Board
Multifamily Housing
Revenue Refunding Bonds
(Barrington Hills Apartments Project)
Series 1999
Prepared by
Xxxxxx, Xxxxxxx & Xxxxxxxx, LLP
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx Xxxxxxxx 00000-0000
TABLE OF CONTENTS
Page
Section 1. Definitions and Interpretation.....................................1
Section 2. Acquisition, Construction, Equipping and Completion
of the Project....................................................5
Section 3. Residential Rental Property........................................6
Section 4. Low Income Tenants; Records and Reports............................8
Section 5. Tax-exempt Status of the Bonds.....................................9
Section 6. Modification of Covenants.........................................10
Section 7. Reserved..........................................................10
Section 8. Consideration.....................................................10
Section 9. Reliance..........................................................11
Section 10. Location of the Project; Sale or Transfer of the Project..........11
Section 11. Term..............................................................12
Section 12. Covenants to Run With the Land....................................13
Section 13. Burden and Benefit................................................13
Section 14. Uniformity; Common Plan...........................................13
Section 15. Default; Enforcement..............................................13
Section 16. The Trustee.......................................................15
Section 17. Recording and Filing..............................................15
Section 18. Governing Law.....................................................15
Section 19. Amendments........................................................15
Section 20. Notices...........................................................16
Section 21. Severability......................................................17
Section 22. Multiple Counterparts.............................................17
Exhibit A - Description of Project Site
Exhibit B - Certificate of Continuing Program Compliance
Exhibit C - Income Computation and Certification
Exhibit D - Certificate Re: Qualified Project Period
LAND USE REGULATORY AGREEMENT
THIS LAND USE REGULATORY AGREEMENT (this "Agreement" or this "Regulatory
Agreement") is made and entered into as of July 1, 1999 by and among the PULASKI
COUNTY PUBLIC FACILITIES BOARD, a public body politic and corporate under the
laws of the State of Arkansas (the "Issuer"), and STATE STREET BANK AND TRUST
COMPANY OF MISSOURI, N.A., a national banking association, (the "Trustee") and
WATERTON RAINTREE, L.L.C., a Delaware limited liability company (the
"Borrower").
W I T N E S S E T H:
WHEREAS, Issuer is a duly organized and existing public body politic and
corporate, created pursuant to the provisions of the "Public Facilities Board
Act," Arkansas Code Annotated ss. 00-000-000, et seq. (Repl. 1998) (the "Act")
and Ordinance No. 92-OR-26, as amended by Ordinance No. 92-OR-33 of the
Ordinances of Pulaski County, Arkansas (collectively, the "Authorizing
Ordinance"), authorized to issue its bonds to finance and refinance the
purchase, construction, renovation, improvement and equipping of residential
housing for persons of low and moderate income; and
WHEREAS, the Issuer previously issued $19,000,000 Pulaski County Public
Facilities Board Multifamily Housing Revenue Bonds (Little Rock Residential Care
Center Project), Series 1998 (the "Prior Bonds"), a portion of which was
allocated to refinance the acquisition and renovation of a multifamily housing
project located in the County of Pulaski, State of Arkansas and commonly
referred to as the Barrington Hills Apartments (the "Project"); and
WHEREAS, in furtherance of the purposes of the Act, the Issuer has
determined to issue its $6,100,000 Multifamily Housing Revenue Bonds (Barrington
Hills Apartments Project) Series 1999 (the "Bonds") to refund that portion of
the Prior Bonds allocated to the Project and loan a portion of the proceeds from
the Prior Bonds (the "Loan") to the Borrower to refinance the acquisition and
renovation of the Project, to establish a credit enhancement reserve fund, and
to pay a portion of the costs of issuance of the Bonds; and
WHEREAS, in order for interest on the Bonds to be excluded from gross
income for federal income tax purposes under the Internal Revenue Code of 1986,
as amended (the "Code"), and the income tax regulations (the "Regulations") and
rulings with respect to the Code, the use and operation of the Project must be
restricted in certain respects; and
WHEREAS, the Issuer, the Trustee and the Borrower have determined to enter
into this Regulatory Agreement in order to set forth certain terms and
conditions relating to the financing, improvement and equipping of the Project
and in order to ensure that the Project will be used and operated in accordance
with the Code and the Regulations;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the Issuer, the Trustee and the
Borrower hereby agree as follows:
Section 1. Definitions and Interpretation. The following terms shall have the
respective meanings assigned to them in this Section 1 unless the context in
which they are used clearly requires otherwise:
1
"Adjusted Income" means the adjusted income of a person (together with the
adjusted income of all persons who intend to reside with such person in one
residential unit) as calculated in the manner prescribed pursuant to Section
142(d) of the Code as it shall be in effect on the Closing Date.
"Affiliated Party" means a member of the Borrower, a person whose
relationship with the Borrower would result in a disallowance of losses under
Sections 267 or 707(b) of the Code or a person who, together with the Borrower,
is a member of the same controlled group of corporations (as defined in Section
1563(a) of the Code, except that "more than 50 percent" shall be substituted for
"at least 80 percent" each place it appears therein).
"Agreement" or "Regulatory Agreement" means this Land Use Regulatory
Agreement dated as of July 1, 1999, by and among the Issuer, the Trustee and the
Borrower, as it may be amended from time to time.
"Area" means Pulaski County, Arkansas.
"Authorized Borrower Representative" means any person who at the time and
from time to time may be designated as such, by written certificate furnished to
the Issuer and the Trustee containing the specimen signature of such person and
signed on behalf of the Borrower by a manager of the Borrower, which certificate
may designate an alternate or alternates.
"Bond Counsel" means an attorney at law or firm of attorneys of nationally
recognized standing in matters pertaining to the validity of, and the Tax-exempt
nature of interest on, obligations issued by states and their political
subdivisions, selected by the Issuer and duly admitted to the practice of law
before the highest court of any state of the United States of America or the
District of Columbia but shall not include counsel for the Borrower or the
Trustee.
"Bondholder" or "holder" or "owner" means, when used with respect to the
Bonds, the owner of a Bond then outstanding under the Indenture as shown on the
registration books maintained by the Trustee pursuant to the Indenture.
"Bonds" means the bonds authorized, authenticated and delivered under the
Indenture.
"Borrower" means Waterton Raintree, L.L.C., a Delaware limited liability
company, and its permitted successors and assigns.
"Certificate of Continuing Program Compliance" means the Certificate of
Continuing Program Compliance to be filed quarterly by the Borrower with the
Issuer and the Trustee at the times specified in clause (d) of the first
paragraph of Section 4 of this Regulatory Agreement, such report to contain the
information set forth in and to be in substantially the form attached hereto as
Exhibit B or such other form as may from time to time be prescribed by the
Issuer.
"Closing Date" means the date of issuance of the Bonds.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Costs of Issuance" means costs of issuing the Bonds as defined in the
Indenture.
"Determination of Taxability" means either (A) refusal by the Borrower to
consent to any amendment or supplement hereto or to the Financing Agreement
which, in the opinion of Bond Counsel,
2
is necessary or advisable to maintain the exclusion of interest on the Bonds
from gross income for federal income tax purposes; or (B) any of (1) the
enactment of applicable legislation of which the Trustee has actual knowledge,
(2) a final judgment or order of a court of original or appellate jurisdiction
of which the Trustee has actual knowledge, (3) a final ruling or decision of the
Internal Revenue Service of which the Trustee has actual knowledge or (4) the
filing with the Trustee of an opinion of Bond Counsel, in each case to the
effect that the interest on the Bonds (other than interest on any Bond for any
period during which such Bond is held by a "substantial user" of any facility
financed with the proceeds of the Bonds or a "related person," as such terms are
used in Section 147(a) of the Code) is includable in the gross incomes of all
recipients thereof for federal income tax purposes.
"Dwelling Units" means the individual units of multifamily residential
rental housing comprising the Project.
"Financing Agreement" means the Financing Agreement dated as of July 1,
1999, by and among the Issuer and the Borrower, as it may be amended from time
to time.
"Functionally Related and Subordinate" means and includes facilities for
use by tenants, for example, laundry facilities, parking areas and recreational
facilities, provided that the same are of a character and size commensurate with
the character and size of the Project.
"Housing Act" means the United States Housing Act of 1937, as amended, or
its successor.
"Income Certification" means a Verification of Income in the form attached
hereto as Exhibit C or in such other form as may from time to time be provided
by the Issuer to the Borrower.
"Indenture" means that Indenture of Trust between the Issuer and the
Trustee dated as of July 1, 1999, securing $6,100,000 Pulaski County Public
Facilities Board Multifamily Housing Revenue Bonds (Barrington Hills Apartments
Project), Series 1999.
"Inducement Date" means March 25, 1998.
"Loan" means the loan to be made to the Borrower pursuant to the terms of
the Financing Agreement from proceeds of the Prior Bonds, the proceeds of which,
together with other funds, are to be used to refinance the acquisition of the
Project and finance the renovation and equipping of the Project.
"Low Income Tenant" means a tenant whose Adjusted Income does not exceed
limits determined in a manner consistent with determinations of lower income
families under Section 8 of the Housing Act, except that the percentage of
median gross income that qualifies as lower income shall be 60% of median gross
income for the Area with adjustments for family size. If all the occupants of a
unit are students (as defined under Section 151(c) of the Code), no one of whom
is entitled to file a joint return under Section 6013 of the Code, such
occupants shall not qualify as Low Income Tenants. The determination of a
tenant's status as a Low Income Tenant shall be made by the Borrower upon
initial occupancy of a unit in the Project by such Tenant and annually
thereafter and at any time the Borrower has knowledge that the number of
occupants in that unit has increased, on the basis of an Income Certification
executed by the tenant.
"Low Income Units" means the units in the Project required to be rented to,
or held available for occupancy by, Low Income Tenants pursuant to Section 4(b)
hereof.
3
"Mortgage" means that certain Multifamily Mortgage, Assignment of Rents and
Security Agreement from the Borrower to the Lender and assigned by the Lender to
Xxxxxx Xxx, granting a first priority security interest in the Project to secure
repayment of the Note.
"Net Proceeds" means the proceeds of the Bonds.
"Note" means that certain promissory note from Borrower payable to the
order of the Lender and assigned by the Lender to Xxxxxx Mae, evidencing the
Borrower's obligation to repay the Loan.
"Project" means the Project Facilities and the Project Site.
"Project Costs" means, to the extent authorized by the Act, any and all
costs incurred by the Borrower with respect to the refinancing and
rehabilitation of the Project, whether paid or incurred prior to or after the
date of this Regulatory Agreement, including, withoutlimitation, costs for site
preparation, the planning of housing and improvements, the acquisition of
property, the removal or demolition of existing structures, the construction of
housing and related facilities and improvements, and all other work in
connection therewith, and all costs of financing, including, without limitation,
the cost of consultant, accounting and legal services, other expenses necessary
or incident to determining the feasibility of the Project, administrative and
other expenses necessary or incident to the Project and the financing thereof
(including reimbursement to any municipality, county or other entity for
expenditures made, with the approval of the Issuer, for the Project) and all
other costs approved by Bond Counsel.
"Project Facilities" means the buildings, structures and other improvements
on the Project Site to be reconstructed, constructed or improved by the
Borrower, and all fixtures and other property owned by the Borrower and located
on, or used in connection with, such buildings, structures and other
improvements constituting the Project.
"Project Site" means the parcel or parcels of real property described in
Exhibit A hereto, and all rights and appurtenances thereunto appertaining.
"Qualified Project Costs" means the Project Costs incurred not earlier than
the date 60 days prior to the Inducement Date which are chargeable to a capital
account with respect to the Project for federal income tax and financial
accounting purposes, or would be so chargeable either with a proper election by
the Borrower or but for the proper election by the Borrower to deduct those
amounts; provided, however, that only such portion of the interest accrued on
the Bonds during the construction of the Project shall constitute Qualified
Project Costs as bear the same ratio to all such interest or fees, as
applicable, as the Qualified Project Costs bear to all Project Costs; and
provided further that if any portion of the Project is being constructed by the
Borrower or an Affiliated Party (whether as a general contractor or a
subcontractor), "Qualified Project Costs" shall include only (a) the actual
out-of-pocket costs incurred by the Borrower or such Affiliated Party in
acquiring and renovating the Project (or any portion thereof, (b) any reasonable
fees for supervisory services actually rendered by the Borrower or such
Affiliated Party (but excluding any profit component) and (c) any overhead
expenses incurred by the Borrower or such Affiliated Party which are directly
attributable to the work performed on the Project, and shall not include, for
example, intercompany profits resulting from members of an affiliated group
(within the meaning of Section 1504 of the Code) participating in the
construction of the Project or payments received by such Affiliated Party due to
early completion of the Project (or any portion thereof.) Qualified Project
Costs do not include Costs of Issuance.
"Qualified Project Period" means the period beginning on the Closing Date
and ending on the latest of (a) the date which is 15 years after the Closing
Date, (b) the first date on which no tax-exempt
4
private activity bond (as that phrase is used in Section 142(d)(2) of the Code)
issued with respect to the Project is outstanding or (c) the date on which any
assistance provided with respect to the Project under Section 8 of the Housing
Act terminates.
"Regulations" means the Income Tax Regulations promulgated or proposed (if
deemed appropriate in the opinion of Bond Counsel) by the Department of the
Treasury pursuant to the Code from time to time.
"Tax-exempt" means, with respect to interest on any obligations of a state
or local government, including the Bonds, that such interest is excluded from
gross income for federal income tax purposes (other than interest on any Bond
for any period during which such Bond is held by a "substantial user" of any
facility financed with the proceeds of the Bonds or a "related person," as such
terms are used in Section 147(a) of the Code); provided, however, that such
interest may be includable as an item of tax preference or otherwise includable
directly or indirectly for purposes of calculating other tax liabilities,
including any alternative minimum tax or environmental tax, under the Code.
"Trustee" means State Street Bank and Trust of Missouri, N.A., or any
successor Trustee serving as such under the Indenture.
Unless the context clearly requires otherwise, as used in this Regulatory
Agreement, words of the masculine, feminine or neuter gender shall be construed
to include each other gender and words of the singular number shall be construed
to include the plural number, and vice versa. This Regulatory Agreement and all
the terms and provisions hereof shall be construed to effectuate the purposes
set forth herein and to sustain the validity hereof.
The defined terms used in the preamble and recitals of this Regulatory Agreement
have been included for convenience of reference only, and the meaning,
construction and interpretation of all defined terms shall be determined by
reference to this Section 1, notwithstanding any contrary definition in the
preamble or recitals hereof. The titles and headings of the sections of this
Regulatory Agreement have been inserted for convenience of reference only, and
are not to be considered a part hereof and shall not in any way modify or
restrict any of the terms or provisions hereof or be considered or given any
effect in construing this Regulatory Agreement or any provisions hereof or in
ascertaining intent, if any question of intent shall arise.
Section 2. Acquisition, Construction, Equipping and Completion of the Project.
The Borrower hereby represents as of the date hereof, covenants and agrees as
follows:
(a) The Borrower has acquired the Project and has incurred substantial
binding obligations for the renovation, equipping and completion of the Project,
pursuant to which the Borrower is and has been obligated to expend at least 5%
of the proceeds of the Loan.
(b) The Borrower's reasonable expectations respecting the total cost of the
acquisition, renovation, equipping and completion of the Project are accurately
set forth in the Borrower Cost Certificate submitted to the Issuer.
(c) The Borrower has acquired the Project and since acquiring it has
proceeded and will continue to proceed with due diligence to complete
renovation, equipping and completion of the Project.
(d) The Borrower reasonably expects to complete the renovation, equipping
and completion of the Project and to expend the full amount of the proceeds of
the Loan (excluding, however, amounts in
5
a reasonably required credit enhancement reserve fund) for Project Costs prior
to the date 12 months from the Closing Date.
(e) The Borrower will submit, or cause to be submitted, to the Trustee, on
or before the Closing Date, a certificate stating that the full amount of each
disbursement will be applied to pay or to reimburse the Borrower for the payment
of Project Costs and that, after taking into account the proposed disbursement,
(i) the aggregate disbursements of Loan proceeds will have been applied to pay
or to reimburse the Borrower for the payment of Qualified Project Costs in an
amount equal to 95% or more of the aggregate disbursements of the Loan
(excluding, however, amounts in a reasonably required debt service reserve
fund); (ii) less than 25% of the proceeds of the Loan have been disbursed to pay
or to reimburse the Borrower for the cost of acquiring land, (iii) not more than
2% of the proceeds of the Bonds will be disbursed to pay Costs of Issuance and
(iv) Loan proceeds equal to at least 15% of the cost of acquiring the Project
Facilities will be expended for rehabilitation costs as required by Code Section
147(d)(3) (the "Borrower Cost Certificate").
(f) The Borrower (and any Affiliated Party) will not take or omit to take,
as is applicable, any action if such action or omission would in any way cause
the proceeds from the Loan to be applied in a manner contrary to the
requirements of this Regulatory Agreement, nor will it take or omit to take any
such action if the Borrower (or any Affiliated Party) knows that such action or
omission may cause the proceeds from the sale of the Bonds to be applied in a
manner contrary to the Indenture, this Agreement, the Financing Agreement, the
Act or the Code.
In the event the Loan should be insufficient to pay Qualified Project Costs in
full, the Issuer shall be under no obligation to provide for payment of any
costs of completing the Project.
The Borrower further agrees to spend additional moneys for payment of any costs
of the Project sufficient to insure that (i) the portion of Prior Bond proceeds
spent on land is no more than 25% of the amount spent for all purposes, (ii) the
portion of Prior Bond proceeds spent on costs of the Project paid or incurred by
or on account of the Borrower or any Related Person on or after the date 60 days
prior to the Inducement Date and chargeable to the capital account of the
Project (or so chargeable either with a proper election by the Borrower to
deduct such amounts, within the meaning of Treasury Regulation 1.103-8(a)(1)) so
that the amounts expended on such costs of the Project are at least 97% of the
amount spent for all purposes (excluding, however, amounts in a reasonably
required Credit Enhancement Reserve Fund under the Indenture), except that, upon
receipt by the Borrower, the Trustee and the Issuer of an approving opinion of
Bond Counsel, the percentage of such amounts so used may be 95%, and (iii) all
amounts spent on renovation of the Project will equal 15% of the costs of
acquisition of the Project Facilities.
Section 3. Residential Rental Property. The Borrower hereby acknowledges and
agrees that the Project is to be owned, managed and operated as a "qualified
residential rental project" (within the meaning of Section 142(d) of the Code)
for a term equal to the Qualified Project Period. To that end, and for the term
of this Regulatory Agreement, the Borrower hereby represents, covenants,
warrants and agrees as follows:
(a) The Project has been developed for the purpose of providing multifamily
residential rental property, and the Borrower will own, manage and operate the
Project as a project to provide multifamily residential rental property
comprising a building or structure or several interrelated buildings or
structures, together with any functionally related and subordinate facilities,
and no other facilities in accordance with Section 142(d) of the Code and
Section 1.103-8(b) of the Regulations and the Act, as the
6
same shall be amended from time to time, and in accordance with such
requirements as may be imposed thereby on the Project from time to time.
(b) All of the Dwelling Units in the Project are similarly constructed
units, and each Dwelling Unit in the Project will contain complete separate and
distinct facilities for living, sleeping, eating, cooking and sanitation for a
single person or a family, including a sleeping area, bathing and sanitation
facilities and cooking facilities equipped with a cooking range, a sink and a
refrigerator.
(c) None of the Dwelling Units in the Project will at any time be utilized
on a transient basis; none of the Dwelling Units in the Project shall be leased
or rented for a period of less than six months; and that neither the Project nor
any portion thereof shall be used as a hotel, motel, dormitory, fraternity
house, sorority house, rooming house, hospital, sanitarium, nursing home, rest
home, trailer park, trailer court, mobile home park, or recreational vehicle
park or by a cooperative housing corporation (as defined in section 216(b)(1) of
the Code).
(d) No part of the Project will at any time be owned by a cooperative
housing corporation, nor shall the Borrower take any steps in connection with a
conversion to such ownership or uses.
(e) Once available for occupancy, each Dwelling Unit will be available for
rental on a continuous basis to members of the general public on a nontransient
basis, and the Borrower will not give preference to any particular class or
group in renting the Dwelling Units in the Project, except to the extent that
Dwelling Units are required to be leased or rented to Low Income Tenants.
(f) The Project Site consists of a parcel or parcels that are contiguous
except for the interposition of a road, street or stream, and all of the Project
Facilities comprise a single geographically and functionally integrated project
for residential rental property, which havesimilarly constructed units financed
pursuant to a common plan, together with functionally related and subordinate
facilities which shall be owned by the Borrower as evidenced by the ownership,
management, accounting and operation of the Project.
(g) No dwelling unit in the Project shall be occupied by the Borrower;
provided, however, that this subsection shall not be construed to prohibit
occupancy of not more than six (6) dwelling units by one or more resident
managers or maintenance personnel any of whom may be the Borrower.
(h) The Borrower shall not discriminate on the basis of race, religion,
creed, color, ethnic group identification, sex, source of income (e.g., AFDC),
mental or physical disability, age, national origin or marital status in the
rental, lease, use or occupancy of the Project or in connection with the
employment or application for employment of persons for the operation and
management of the Project.
(i) The Borrower will accept as tenants, on the same basis as all other
prospective tenants, persons who are holders of vouchers or certificates for
federal housing assistance payments for existing housing pursuant to Section 8
of the United State Housing Act of 1937 ("Section 8")or a successor federal
program, and, in connection therewith, the Borrower will not apply tenant
selection criteria to such voucher or certificate holders which are more
burdensome than the criteria applied to any other prospective tenants.
(j) The Borrower will not discriminate against prospective tenants on the
basis of their receipt of, or eligibility for, housing assistance under any
federal, state or local program or on the basis that they have a minor child or
children living with them.
7
Section 4. Low Income Tenants; Records and Reports. Pursuant to the requirements
of the Code, the Borrower hereby represents, warrants and covenants as follows:
(a) Within 30 days after the commencement of the Qualified Project Period,
the Borrower shall execute and deliver to the Issuer and the Trustee a copy of a
certificate identifying the beginning date and earliest ending date of the
Qualified Project Period, in substantially the form attached as Exhibit D hereto
or such other form as may be required by the Issuer.
(b) Commencing on the first day of the Qualified Project Period, at least
40% of all units in the Project (excluding units occupied by property managers)
will be occupied by or set aside for occupancy by, Low Income Tenants; and for
the Qualified Project Period no less than 40% of the total number of completed
units of the Project shall at all times be rented to and occupied by, or set
aside for occupancy by, Low Income Tenants. For the purposes of this paragraph
(b), a vacant unit which was most recently occupied by a Low Income Tenant is
treated as rented and occupied by a Low Income Tenant until reoccupied, other
than for a temporary period of not more than 31 days, at which time the
character of such unit shall be redetermined. In determining whether the
requirements of this subsection (b) have been met, fractions of units shall be
treated as entire units.
(c) No tenant qualifying as a Low Income Tenant shall be denied continued
occupancy of a unit in the Project because, after admission, such tenant's
Adjusted Income increases to exceed the qualifying limit for Low Income Tenants;
provided, however, that should a Low Income Tenant's Adjusted Income, as of the
most recent determination thereof, exceed 140% of the then applicable income
limit for a Low Income Tenant of the same family size, the next available unit
of comparable or smaller size must be rented to (or held vacant and available
for immediate occupancy by) a Low Income Tenant; and provided further that,
until such next available unit is rented to a tenant who is not a Low Income
Tenant, the former Low Income Tenant who has to qualify as such shall be deemed
to continue to be a Low Income Tenant for purposes of the 40% requirement of
paragraph (b) of this Section 4.
(d) The Borrower will obtain, complete, and maintain on file Income
Certifications (substantially in the form attached hereto as Exhibit C) from
each Low Income Tenant, including (i) an Income Certification dated immediately
prior to the initial occupancy of such Low Income Tenant in the Project and (ii)
thereafter, annual Income Certifications which must be filed each December 1.
The Borrower will obtain such additional information as may be required in the
future by the Issuer and by Section 142(d) of the Code, as the same may be
amended from time to time, or in such other form and manner as may be required
by applicable rules, rulings, policies, procedures, Regulations or other
official statements now or hereafter promulgated, proposed or made by the
Department of the Treasury or the Internal Revenue Service with respect to
obligations which are Tax- exempt under Section 142(d) of the Code. A copy of
the most recent Income Certification for Low Income Tenants commencing or
continuing occupation of a Low and Moderate Income Unit (and not previously
filed with the Issuer) shall be attached to the Certificate of Continuing
Program Compliance which is to be filed with the Issuer and the Trustee no later
than the fifteenth day of each month following the receipt by the Trustee of the
Completion Certificate to and including the month in which such report indicates
that 40% of the units are occupied by Low Income Tenants, and thereafter no
later than the fifteenth day of the first month of each calendar quarter until
the end of the Qualified Project Period. The Borrower shall make a good faith
effort to verify that the income information provided by an applicant in an
Income Certification is accurate by taking one or more of the following steps as
part of the verification process: (1) obtain a pay stub for the most recent pay
period, (2) obtain an income tax return for the two most recent tax years, (3)
conduct a TRW or similar search or (4) contact the applicant's current employer,
and any additional inquiries or documentation that the Issuer shall deem
relevant or other forms of independent verification satisfactory to the Issuer.
8
(e) The Borrower will maintain complete and accurate records pertaining to
the Low Income Units and will with reasonable notice permit any duly authorized
representative of the Issuer, the Trustee, the Department of the Treasury or the
Internal Revenue Service to inspect the books and records of the Borrower
pertaining to the Project, including those records pertaining to the occupancy
of the Low Income Units.
(f) [Reserved]
(g) On or before each December 1 during the Qualified Project Period the
Borrower will submit to the Issuer a draft of the completed Internal Revenue
Code Form 8703 or such other annual certification required by the Code to be
submitted to the Secretary of the Treasury as to whether the Project continues
to meet the requirements of Section 142(d) of the Code. On or before each March
1 during the Qualified Project Period the Borrower will submit such completed
form to the Secretary of the Treasury, regardless of whether or not the Issuer
has responded to such draft.
(h) Each lease or rental agreement pertaining to a Low Income Unit shall
contain a provision to the effect that the Borrower has relied on the income
certification and supporting information supplied by the Low Income Tenant in
determining qualification for occupancy of the Low Income Unit, and that any
material misstatement in such certification (whether or not intentional) will be
cause for immediate termination of such lease or rental agreement. Each such
lease or rental agreement shall also provide that the tenant's income is subject
to annual certification in accordance with Section 4(c) hereof and to
recertification if the number of occupants in the units increases and that if
upon any such certification such tenant's Adjusted Income exceeds 140% of the
then applicable income limit for a Low Income Tenant of the same family size,
such tenant may cease to qualify as a Low Income Tenant, and such tenant's rent
is subject to increase.
Section 5. Tax-exempt Status of the Bonds. The Borrower makes the following
representations, warranties and agreements for the benefit of the holders of the
Bonds from time to time.
(a) The Borrower will not knowingly take or permit actions within its
control, or omit to take or cause to be taken, as is appropriate, any action
that would adversely affect the Tax-exempt nature of the interest on the Bonds
and, if it should take or permit, or omit to take or cause to be taken, any such
action, it will take all lawful actions necessary to rescind or correct such
actions or omissions promptly upon obtaining knowledge thereof.
(b) The Borrower will take such action or actions as may be necessary, in
the written opinion of Bond Counsel filed with the Issuer and the Trustee, with
a copy to the Borrower, to comply fully with all applicable rules, ruling,
policies, procedures, Regulations or other official statements promulgated,
proposed or made by the Department of the Treasury or the Internal Revenue
Service pertaining to obligations the interest on which is Tax-exempt under
Section 142(d) of the Code.
(c) The Borrower will file or record such documents and take such other
steps as are necessary, in the written opinion of Bond Counsel filed with the
Issuer and the Trustee, with a copy to the Borrower, in order to insure that the
requirements and restrictions of this Regulatory Agreement will be binding upon
all owners of the Project, including, but not limited to, the execution and
recordation of this Regulatory Agreement in the records of the Circuit and
County Clerk for Pulaski County, Arkansas.
9
(d) The Borrower will not enter into any agreements which would result in
the payment of principal or interest on the Bonds being "federally guaranteed"
within the meaning of Section 149(b) of the code.
(e) Subject to Section 11 hereof, the Borrower hereby covenants to include
the requirements and restrictions contained in this Regulatory Agreement in any
documents transferring any interest in the Project prior to the expiration of
the Qualified Project Period to another person to the end that such transferee
has notice of, and is bound by, such restrictions, and to obtain the agreement
from any transferee to abide by all requirements and restrictions of this
Regulatory Agreement.
The Borrower agrees and acknowledges that it will not purchase Bonds in amounts
related to the principal amount of the Note.
Section 6. Modification of Covenants. The Borrower, the Trustee and the Issuer
hereby agree as follows:
(a) To the extent any amendments to the Regulations or the Code shall, in
the written opinion of Bond Counsel filed with the Issuer and Trustee, who shall
deliver a copy thereof to the Borrower, impose requirements upon the ownership
or operation of the Project more restrictive than those imposed by this
Regulatory Agreement in order to maintain the Tax-exempt status of interest on
the Bonds, this Agreement shall be deemed to be automatically amended, without
the consent or approval of any other person, to impose such additional or more
restrictive requirements. The parties hereto hereby agree to execute such
amendment hereto as shall be necessary to document such automatic amendment
hereof.
(b) To the extent that the Regulations or the Code, or any amendments
thereto, shall, in the written opinion of Bond Counsel filed with the Issuer,
the Trustee and the Borrower, impose requirements upon the ownership or
operation of the Project less restrictive than imposed by this Regulatory
Agreement, this Regulatory Agreement may be amended or modified to provide such
less restrictive requirements but only by written amendment signed by the
Issuer, the Trustee and the Borrower and approved by the written opinion of Bond
Counsel to the effect that such amendment will not affect the Tax-exempt status
of interest on the Bonds. The Issuer shall be under no obligation to agree to
any such amendment, it being understood that each of the requirements of this
Regulatory Agreement is a specific requirement of the Issuer, whether or not
required by state or federal law.
(c) The Borrower, the Issuer and, if applicable, the Trustee shall execute,
deliver and, if applicable, file of record any and all documents and instruments
necessary to effectuate the intent of this Section 6, and the Issuer hereby
appoints the Trustee as its true and lawful attorney-in-fact to execute, deliver
and, if applicable, file of record on behalf of the Issuer, as is applicable,
any such document or instrument (in such form as may be approved in writing by
bond Counsel) if the Issuer defaults in the performance of its obligations under
this subsection (c); provided, however, that unless directed in writing by the
Issuer, the Trustee shall take no action under this subsection (c) without first
notifying the Issuer and without first providing the Issuer an opportunity to
comply with the requirements of this Section 6. Nothing in this Section 6(c)
shall be construed to allow the Trustee to execute an amendment to this
Regulatory Agreement on behalf of the Issuer.
Section 7. [Reserved]
Section 8. Consideration. The Issuer has issued the Bonds to refund the Prior
Bonds which were issued to provide funds to finance the Project, all for the
purpose, among others, of inducing the Borrower to acquire, renovate, equip and
complete the Project. In consideration of the issuance of the Bonds by the
10
Issuer, the Borrower has entered into this Regulatory Agreement and has agreed
to restrict the uses to which this Project can be put on the terms and
conditions set forth herein.
Section 9. Reliance. The Borrower hereby recognizes and agrees that the
representations and covenants set forth herein may be relied upon by all persons
interested in the legality and validity of the Bonds, and in the exemption from
federal income taxation of the interest on the Bonds. In performing their duties
and obligations hereunder, the Issuer and the Trustee may rely upon statements
and certificats of the Low Income Tenants, and upon audits of the books and
records of the Borrower pertaining to the Project. In addition, the Issuer and
the Trustee may consult with counsel, and the opinion of such counsel shall be
full and complete authorization and protection in respect of any action taken or
suffered by the Issuer or the Trustee hereunder in good faith and in conformity
with such opinion. In determining whether any default or lack of compliance by
the Borrower exists under this Regulatory Agreement, the Trustee may, but shall
not be required to, conduct any investigation into or review of the operations
or records of the Borrower and may rely solely on any written notice or
certificate delivered to the Trustee by the Borrower or the Issuer with respect
to the occurrence or absence of a default unless it knows that the notice or
certificate is erroneous or misleading.
Moreover, the parties recognize and agree that the terms of this Regulatory
Agreement and the enforcement hereof are essential to the security of Xxxxxx Xxx
and are entered into for the benefit of Xxxxxx Mae. Xxxxxx Xxx shall accordingly
have contractual rights in this Regulatory Agreement and shall be entitled (but
not obligated) to enforce separately or jointly with the Issuer and the Trustee,
or to cause the Issuer or the Trustee to enforce, the terms of this Regulatory
Agreement. In addition, Xxxxxx Mae is intended to be and shall be a third-party
beneficiary of this Regulatory Agreement; and Xxxxxx Xxx shall have the right
(but not the obligation) to enforce the terms of this Regulatory Agreement
insofar as this Regulatory Agreement sets for the obligations of the Borrower.
Section 10. Location of the Project; Sale or Transfer of the Project. The
Borrower hereby represents and warrants that the Project is located entirely
within Pulaski County, Arkansas. The Borrower hereby covenants and agrees not to
voluntarily sell, transfer or otherwise dispose of the Project, or any portion
thereof (other than for individual tenant use as contemplated hereunder),
without obtaining the prior written consent of the Issuer and theTrustee, which
consent shall not be unreasonably withheld by the Issuer or the Trustee and
shall be given by the Trustee and the Issuer if (a) the Borrower shall not be in
default hereunder; (b) the purchaser or assignees shall certify that the
continued operation of the Project shall comply with the provisions of this
Agreement; (c) the Issuer receives evidence reasonably satisfactory to the
Issuer that the purchaser or assignee shall be willing and capable of complying
with the terms and conditions of this Agreement; (d) the purchaser or assignee
shall execute any document requested by the Issuer or the Trustee with respect
to the assumption of the Borrower's obligations under this Agreement, including,
without limitation, an instrument of assumption hereof, and shall deliver to the
Issuer an opinion of counsel for the transferee to the effect that each such
document and this Agreement are valid, binding and enforceable obligations of
such purchaser or assignee; (e) either (i) evidence satisfactory to the Issuer
that the purchaser or assignee has at least three years' experience in the
ownership, operation and management of rental housing projects, without any
record of material violations of discrimination restrictions or other state or
federal laws or regulations applicable to such projects or (ii) the purchaser or
assignee agrees to retain a property management firm which the Issuer determines
has the experience and record described in subclause (i) above or (iii) the
Issuer shall not have any reason to believe that the purchaser or assignee is
incapable, financially or otherwise, of complying with, or may be unwilling to
comply with, the terms of all agreements binding on such purchaser or assignee
relating to the Project; (f) the Issuer and the Trustee shall have received (i)
reasonable evidence satisfactory to the Issuer and the Trustee that the
Borrower's purchaser or transferee has assumed in writing and in full, the
Borrower's duties and obligations under this Regulatory Agreement, (ii) an
opinion
11
of counsel to the transferee that the transferee has duly assumed the
obligations of the Borrower under this Regulatory Agreement and that such
obligations and this Regulatory Agreement are binding on the transferee, (iii)
an opinion of Bond Counsel that such transfer shall not adversely affect the
Tax-exempt nature of the interest on the Bonds and (iv) a Certificate of
Continuing Program Compliance (and a "bring-down" certificate, if necessary)
current as of the date of transfer; (g) the Borrower shall pay all costs of the
transfer of title, including, but not limited to, the cost of meeting the
conditions specified in this Section 10; and (h) such other conditions are met
as the Issuer and the Trustee may reasonably impose to assure compliance by the
Project with the requirements of this Agreement. Once such written consent of
the Issuer and Trustee is obtained by Borrower, that consent shall constitute
conclusive evidence that the sale is not in violation of these transfer
requirements and restrictions. Except as provided in Section 11 hereof, it is
hereby expressly stipulated and agreed that any sale, transfer or other
disposition of the Project in violation of this Section 10 shall be null, void
and without effect, shall cause a reversion of title to the Borrower, and shall
be ineffective to relieve the Borrower of its obligations under this Regulatory
Agreement. Nothing contained in this Section 10 shall (i) apply to any
foreclosure, deed in lieu thereof or comparable conversion or to any transfer by
Xxxxxx Mae following such a foreclosure, deed in lieu or comparable conversion
or (ii) affect any provision of any other document or instrument between the
Borrower and the Issuer, Xxxxxx Xxx or any other party which requires the
Borrower to obtain the consent of the Issuer, Xxxxxx Mae or such other party as
a precondition to sale, transfer or other disposition of the Project. Upon any
sale or other transfer which complies with this Agreement, the borrower shall be
fully released from future obligations hereunder,to the extent such obligations
have been assumed by the transferee of the Project, without the necessity of
further documentation, but nothing herein shall release the Borrower from its
past obligations hereunder or from any obligation not expressly assumed by the
transferee of the Project. Any transfer of the Project to any entity, whether or
not affiliated with the Borrower, shall be subject to the provisions of this
Section 10.
Section 11. Term.
(a) This Regulatory Agreement and all and each of the provisions hereof
shall become effective upon its execution and delivery, and shall remain in full
force and effect for the periods provided herein and, except as otherwise
provided in this Section 11, shall terminate in its entirety at the end of the
Qualified Project Period, it being expressly agreed and understood, if
appropriate, that the provisions hereof are intended to survive the retirement
of the Bonds, discharge of the Loan and termination of the Indenture and the
Financing Agreement.
(b) Notwithstanding the foregoing, the provisions of this Regulatory
Agreement shall, in the case of the Trustee, survive the term of this Regulatory
Agreement or the replacement of the Trustee, but only as to claims arising from
events occurring during the term of this Agreement or the Trustee's tenure as
Trustee under the Indenture, and shall, in the case of the Issuer, survive the
term of this Agreement, but only as to claims arising from events occurring
during the term of this Agreement.
(c) The terms of this Regulatory Agreement to the contrary notwithstanding,
the requirements set forth herein shall terminate and be of no further force and
effect in the event of (a) involuntarily noncompliance with the provisions of
this Regulatory Agreement caused by fire, seizure, requisition, foreclosure or
transfer of title by deed in lieu of foreclosure or comparable conversion,
change in a federal law or an action of a federal agency after the Closing Date
which prevents the Issuer and the Trustee from enforcing the provisions hereof,
or condemnation or a similar event, and (b) the payment in full and retirement
of the Bonds within a reasonable period thereafter; provided however, that the
proceeding provisions of this sentence shall cease to apply and the restrictions
contained herein shall be automatically reinstated if, at any time subsequent to
the termination of the Mortgage, foreclosure, transfer of title by deed in lieu
of foreclosure, comparable conversion or similar event, the Borrower or any
related person
12
(within the meaning of Section 147(a)(2) of the Code and Section
1.103-10(e) of the Regulations) obtains an ownership interest in the Project for
federal income tax purposes, in which event, all and several of the terms hereof
shall be reinstated and of full force and effect until expiration of the
original term as described above.
(d) Upon the termination of the terms of this Regulatory Agreement, the
parties hereto agree to execute, deliver and record appropriate instruments of
release and discharge of the terms hereof (which shall be prepared, completed
and recorded at the expense of the Borrower); provided, however, that the
execution and delivery of such instruments shall not be necessary or a
prerequisite to the termination of this Agreement in accordance with its terms.
(e) Notwithstanding any other provision of this Regulatory Agreement, this
Regulatory Agreement may be terminated upon agreement by the Issuer, the
Trustee, Xxxxxx Xxx and the Borrower upon receipt of an opinion of Bond Counsel
acceptable to the Trustee that such termination will not adversely affect the
exemption from federal income taxation of the interest on the Bonds.
Section 12. Covenants to Run With the Land. The Borrower hereby subjects the
Project (including the Project Site) to the covenants, reservations and
restrictions set forth in this Regulatory Agreement. The Issuer and the Borrower
hereby declare their express intent that the covenants, reservations and
restrictions set forth herein shall be deemed covenants running with the land
and shall pass to and be binding upon the Borrower's successors in title to the
Project; provided, however, that on the termination of this Agreement said
covenants, reservations and restrictions shall expire. Each and every contract,
deed or other instrument hereafter executed covering or conveying the Project or
any portion thereof shall conclusively be held to have been executed, delivered
and accepted subject to such covenants, reservations and restrictions,
regardless of whether such covenants, reservations and restrictions are set
forth in such contract, deed or other instruments.
No breach of any of the provisions of this Agreement shall impair, defeat or
render invalid the lien of any mortgage, deed of trust or like encumbrance made
in good faith and for value encumbering the Project or any portion thereof. In
particular, this Regulatory Agreement is subordinate to the Mortgage with
respect to any additional requirements and restrictions of the Issuer or other
regulatory entity that are in addition to the rental restrictions required by
federal tax law to maintain the exclusion from gross income of the interest of
the Bonds, and shall not bind any future owners following a foreclosure, deed in
lieu of foreclosure or comparable conversion with respect to such matters.
Section 13. Burden and Benefit. The Issuer and the Borrower hereby declare their
understanding and intent that the burden of the covenants set forth herein touch
and concern the land in that the Borrower's legal interest in the Project is
rendered less valuable thereby. The Issuer and the Borrower hereby further
declare their understanding and intent that the benefit of such covenants touch
and concern the land by enhancing and increasing the enjoyment and use of the
Project by Low Income Tenants, the intended beneficiaries of such covenants,
reservations and restrictions, and by furthering the public purposes for which
the Bonds were issued.
Section 14. Uniformity; Common Plan. The covenants, reservations and
restrictions hereof shall apply uniformly to the entire Project in order to
establish and carry out a common plan for the use, development and improvement
of the Project Site.
Section 15. Default; Enforcement. If the Borrower defaults in the performance or
observance of any covenant, agreement or obligation of the Borrower set forth in
this Regulatory Agreement, and if such default remains uncured for a period of
30 days after notice thereof shall have been given by the Issuer or
13
the Trustee to the Borrower, then theTrustee shall declare an "Event of Default"
to have occurred hereunder, provided, however, that if the default stated in the
notice is of such a nature that it cannot be corrected within 30 days, such
default shall not constitute an Event of Default hereunder for 180 days after
such notice so long as (i) the Borrower institutes corrective action within said
30 days and diligently pursues such action until the default is corrected, and
(ii) in the opinion of Bond Counsel, the failure to cure said default within 30
days will not adversely affect the tax- exempt status of interest on the Bonds.
The Trustee hereby consents to any correction of the default by the Issuer on
behalf of the Borrower.
Following the declaration of an Event of Default hereunder, the Trustee may, at
its option and subject to the provisions of the Indenture, take any one or more
of the following steps:
(i) by mandamus or other suit, action or proceeding at law or in equity,
including injunctive relief, require the Borrower to perform its obligations and
covenants hereunder or enjoin any acts or things which may be unlawful or in
violation of the right of the Issuer or the Trustee hereunder;
(ii) have access to and inspect, examine and make copies of all of the
books and records of the Borrower pertaining to the Project; and
(iii) take such other action at law or in equity as may appear necessary or
desirable to enforce the obligations, covenants and agreements of the Borrower
hereunder.
The Trustee shall have the right, in accordance with this Section 15 and the
provisions of the Indenture, without the consent, approval or knowledge of the
Issuer, to exercise any or all of the rights or remedies of the Issuer
hereunder, provided that prior to taking any such act the Trustee shall give the
Issuer written notice of its intended action. All fees, costs and expenses of
the Trustee incurred in taking any action pursuant to this Section 15 shall be
the sole responsibility of the Borrower.
After the Indenture has been discharged, the Issuer may act on its own behalf to
declare an "Event of Default" to have occurred and to take any one or more of
the steps specified hereinabove to the same extent and with the same effect as
if taken by a Trustee.
In the event the Borrower shall fail to submit to the Issuer or the Trustee the
Income Certifications or the Certificates of Continuing Program Compliance at
the times set forth in Section 4 hereof and the Issuer or the Trustee shall
determine to inspect the books and records of the Borrower to determine whether
the Borrower is in compliance with the terms of this Regulatory Agreement, the
Borrower shall, upon demand by the Issuer or the Trustee, pay all expenses and
costs of the Issuer and the Trustee in determining whether or not the Borrower
is in compliance with the terms of this Regulatory Agreement.
Notwithstanding anything contained in this Regulatory Agreement or the Indenture
to the contrary, the occurrence of an Event of Default under this Regulatory
Agreement shall not be deemed, under any circumstances whatsoever, to be a
default under the Mortgage Loan Documents except as may be otherwise specified
in the Mortgage Loan Documents. There parties hereto agree that the maturity
date of the Mortgage may be accelerated solely by Xxxxxx Xxx upon the occurrence
of a default on the part of the Borrower under the Mortgage Loan Documents in
accordance with their respective terms and for no other reason.
Notwithstanding any other provision of this Regulatory Agreement to the
contrary, neither the Issuer, the Trustee nor any person under their control
shall, without prior written consent of Xxxxxx Mae, exercise any remedies or
direct any proceeding hereunder other than to enforce rights of specific
performance
14
hereunder, provided that such enforcement shall not include seeking a judgment
lien against the property for monetary damages.
Notwithstanding any provisions of this Regulatory Agreement to the contrary, all
obligations of the Borrower under this Regulatory Agreement for the payment of
money and all claims or judgments for monetary damages against the Borrower
occasioned by breach or alleged breach by the Borrower of its obligations under
this Regulatory Agreement shall be unsecured by, and subordinate in priority and
right to, payment and in all other respects to the obligations, liens, rights
(including without limitation the right to payment and interests arising or
created under the Mortgage Loan Documents. This Regulatory Agreement shall not
be deemed to create a lien or security interest of any kind in the Project in
favor of the Issuer, the Trustee, or any other person with respect to any
monetary obligations of the Borrower arising under this Agreement, and no such
person shall have recourse to the Project in respect thereof.
No subsequent owner of the Project shall by liable or obligated to pay damages
for the breach or default of any obligation of or covenant of any prior owner of
the Project, including the Borrower, under this Regulatory Agreement. The
Borrower at the time the default or breach was alleged to have occurred shall
remain liable for any and all damages occasioned by thereby even after such
person ceases to be the owner of the Project and no person seeking such damages
shall have recourse against the Project.
Section 16. The Trustee. The Trustee shall act as specifically provided herein
and in the Indenture. The Trustee is entering into this Regulatory Agreement
solely in its capacity as trustee under the Indenture, and the duties, powers,
rights and liabilities of the Trustee in acting hereunder shall be subject to
the provisions of the Indenture.
After the date on which no Bonds remain outstanding as provided in the
Indenture, the Trustee shall no longer have any duties or responsibilities under
this Regulatory Agreement and all references to the Trustee in this Regulatory
Agreement shall be deemed references to the Issuer.
Section 17. Recording and Filing. The Borrower shall cause this Regulatory
Agreement, and all amendments and supplements hereto and thereto, to be recorded
and filed in the records of the Circuit and County Clerks and Pulaski County,
Arkansas and in such other places as the Issuer or the Trustee may reasonably
request. The Borrower shall pay all fees and charges incurred in connection with
any such recording. This Regulatory Agreement shall be recorded in the
grantor-grantee index to the name of the Borrower as grantor and the Issuer as
Grantee.
Section 18. Governing Law. This Regulatory Agreement shall be governed by the
laws of the State of Arkansas. The Trustee's rights, duties and obligations
hereunder are governed in their entirety by the terms and provisions of the
Indenture.
Section 19. Amendments. This Regulatory Agreement may not be amended by the
parties hereto without the express written consent of Xxxxxx Xxx and shall be
amended only by a written instrument executed by the parties hereto or their
successors in title, and duly recorded in the records of the Circuit and County
Clerks of Pulaski County, Arkansas and only upon receipt by the Issuer of an
opinion from Bond Counsel that such amendment will not adversely affect the
Tax-exempt status of interest on the Bonds and is not contrary to the provisions
of the Act and with the written consent of the Trustee.
Anything to the contrary contained here notwithstanding, the Issuer, the Trustee
and the Borrower hereby agree to amend this Agreement to the extent required, in
the opinion of Bond Counsel, in order that interest on the Bonds remain
Tax-exempt. The party or parties requesting such amendment shall notify the
other parties to this Regulatory Agreement of the proposed amendment, with a
copy of such
15
requested amendment to Bond Counsel and a request that such Bond Counsel render
to the Issuer an opinion as to the effect of such proposed amendment upon the
Tax-exempt status of interest on the Bonds.
Section 20. Notices. Upon determining that a violation of the Regulatory
Agreement has occurred, the Issuer or the Trustee must, by notice in writing to
the Servicer and Xxxxxx Xxx, inform the Servicer and Xxxxxx Mae that such
violation has occurred, the nature of the violation and that the violation has
been cured or has not been cured, but is curable within a reasonable period of
time, or is incurable; notwithstanding the occurrence of such violation, neither
the Issuer nor the Trustee may have, and each of them must acknowledge that they
shall not have, any right to cause or direct acceleration of the Mortgage Loan,
to enforce the Mortgage Note or to foreclose on the Mortgage.
Any notice required to be given hereunder shall be made in writing and shall be
given by personal delivery, certified or registered mail, postage prepaid,
return receipt requested, at the addresses specified below, or at such other
addresses as may be specified in writing by the parties hereto:
Issuer: Pulaski County Public Facilities Board
000 Xxxxxxx Xxxxxx Xxxxxxxxxxxxxx Xxxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Chairman
Trustee: State Street Bank and Trust Company of Missouri, N.A.
One Metropolitan Square, Suite 3900
000 Xxxxx Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Corporate Trust
Borrower: Waterton Raintree, L.L.C.
000 Xxxx Xxxxxxxxxx Xx., Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Manager
Xxxxxx Xxx: If by mail or overnight courier:
Xxxxxx Mae
0000 Xxxxxxxxx Xxxxxx, X.X.
Drawer AM
Washington, D.C. 20016
Attention: Director, Multifamily Operations
Asset Management
Telecopy: (000) 000-0000
Re: Barrington Hills Apartments Project, Berkshire
Mortgage Finance
If by messenger:
Xxxxxx Xxx
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Director, Multifamily Operations
Asset Management
Telecopy: (000) 000-0000
Re: Barrington Hills Apartments Project,
Berkshire Mortgage Finance
with copy to:
If by mail or overnight courier:
Xxxxxx Mae
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Vice President, Multifamily Operations
Asset Management
Telecopy: (000) 000-0000
Re: Barrington Hills Apartments Project,
Berkshire Mortgage Finance
16
If by messenger:
Xxxxxx Xxx
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Vice President, Multifamily Operations
Asset Management
Telecopy: (000 000-0000
Re: Barrington Hills Apartments Project,
Berkshire Mortgage Finance
Notice shall be deemed given three Business Days after the date of mailing.
Section 21. Severability. If any provision of this Regulatory Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining portions hereof shall not in any way be affected or impaired
thereby.
Section 22. Multiple Counterparts. This Regulatory Agreement may be
simultaneously executed in multiple counterparts, all of which shall constitute
one and the same instrument, and each of which shall be deemed to be an
original.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
17
IN WITNESS WHEREOF, the Issuer, the Trustee and the Borrower have executed
this Regulatory Agreement by duly authorized representatives, all as of the date
first above written.
PULASKI COUNTY PUBLIC FACILITIES BOARD
By: /s/ Xx Xxxxxxxxx
Xx Xxxxxxxxx, Chairman
00
XXXXX XXXXXX XXXX AND TRUST COMPANY
OF MISSOURI, N.A., as Trustee
By: /s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxxx
Assistant Vice President
19
WATERTON RAINTREE, L.L.C.
a Delaware limited liability company
By: Waterton Residential Property Fund II, L.P.,
its Managing Member
By: Waterton Fund II Managers, L.P.,
its General Partner
By: VS Managers, L.L.C., its General Partner
By: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx, its Managing Member
20
ACKNOWLEDGMENT
STATE OF ARKANSAS
COUNTY OF PULASKI
On this 22nd day of July, 1999, before me, a Notary Public, personally
appeared Or Xxxxxxxxx, personally known to me (or provided to me on the basis of
satisfactory evidence) to be the person who executed the foregoing instrument as
Chairman of the Pulaski County Public Facilities Board (the "Issuer"), and
acknowledged to me that the Issuer executed it for the purposes forth therein.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission Expires:
3-17-2007 Xxxxx X. Xxxxxx
Notary Public
[Seal]
00
XXXXXXXXXXXXXX
XXXXX XX XXXXXXXX
XXXX XX XX. XXXXX
Xx this 28th day of July, 1999, before me, a Notary Public, personally
appeared Xxxxxx Xxxxxxx, Assistant Vice President of State Street Bank and Trust
Company of Missouri, N.A., proved to me on the basis of satisfactory evidence to
be the person and officer whose name is subscribed to the foregoing instrument,
and acknowledged to me that she executed the same for the purposes and
consideration therein expressed, in the capacity therein stated, and as the act
and deed of __________________.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission Expires:
April 2, 2001 X.X. Xxxxxx
Notary Public
[Seal]
00
XXXXXXXXXXXXXX
XXXXX XX XXXXXXXX
XXXXXX XX XXXXXXX
Xx this 22nd day of July, 1999, before me, a Notary Public, personally
appeared Xxxxx Xxxxx, proved to me on the basis of satisfactory evidence to be
the person who executed the foregoing instrument as the authorized
representative of Waterton Raintree, L.L.C., a Delaware limited liability
company ("the Borrower"), and acknowledged to me that the Borrower executed it
for the purposes set forth therein.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission Expires:
3-17-2007 Xxxxx X. Xxxxxx
Notary Public
24
