Exhibit 99.1
CREDIT AGREEMENT
BY AND AMONG
XXXXX PROPERTY HOLDINGS LINCOLN TOWERS L.L.C. and
XXXXX PROPERTY HOLDINGS XxXXXXX COURT L.L.C., as Borrower
AND
COLUMBIA NATIONAL REAL ESTATE FINANCE, INC., as Lender
May __, 2000
TABLE OF CONTENTS
1. DEFINITIONS.................................................................................... 1
1.1. Definitions.............................................................................. 1
1.2. Construction............................................................................. 11
1.2.1. Number; Inclusion................................................................ 11
1.2.2. Determination.................................................................... 11
1.2.3. Lender's Discretion and Consent; References to Lender's Requirements............. 11
1.2.4. Documents Taken as a Whole....................................................... 12
1.2.5. Headings......................................................................... 12
1.2.6. Implied References to this Agreement............................................. 12
1.2.7. Persons.......................................................................... 12
1.2.8. Modifications to Documents....................................................... 12
1.2.9. From, To and Through............................................................. 12
1.2.10. Conflicts with Other Loan Documents.............................................. 12
1.3. Accounting Principles.................................................................... 13
2. REVOLVING CREDIT FACILITY...................................................................... 13
2.1. Revolving Credit Commitment.............................................................. 13
2.1.1. Sublimits........................................................................ 13
2.1.2. Term............................................................................. 13
2.2. Nature of Lender's Obligations with Respect to the Loan.................................. 14
2.3. Fees..................................................................................... 14
2.3.1. Fees Paid Prior to the Closing Date.............................................. 14
2.3.2. Fees Due on the Closing Date..................................................... 14
2.4. Unused Facility Fee...................................................................... 14
2.5. Loan Requests............................................................................ 15
2.6. The Loan................................................................................. 15
2.7. Revolving Credit Note.................................................................... 16
2.8. Use of Proceeds.......................................................................... 16
2.9. Additions to the Collateral Pool......................................................... 16
2.9.1. Procedure for Proposing a Real Property for Inclusion in the Collateral Pool..... 16
2.9.2. Procedure for Including a Real Property in the Collateral Pool................... 16
2.9.3. Addition Fee..................................................................... 18
2.10. Release of Collateral.................................................................... 18
2.11. Substitution of Collateral............................................................... 19
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2.12. Release of Collateral Followed by a Permanent Loan........................................ 19
2.12.1. Permanent Loan................................................................... 19
2.12.2. Procedure for Making a Permanent Loan............................................ 19
2.13. Borrower Appraisals....................................................................... 20
2.14. Valuations................................................................................ 21
2.14.1. Timing and Procedure of Valuation................................................ 21
2.14.2. Valuations that Disclose a Decrease in Collateral Pool Value..................... 21
2.14.3. Valuations that Disclose an Increase in Collateral Pool Value.................... 21
2.15. Guaranty of Borrowing Tranche............................................................. 22
2.16. Borrower's Right to Terminate the Credit Facility......................................... 22
2.17. Material Adverse Change to Borrower or a Collateral Pool Property......................... 22
3. INTEREST RATES.................................................................................. 23
3.1.1 Interest Rate............................................................................. 23
3.2. Interest Rate Determinations.............................................................. 23
3.2.1. Prime Rate and Base Rate Determination............................................ 23
3.2.2. Rate and Margin Quotations........................................................ 24
3.3. Interest Periods.......................................................................... 24
3.3.1. Ending Date and Business Day...................................................... 24
3.3.2. Termination Before Expiration Date................................................ 24
3.3.3. Renewals.......................................................................... 24
3.3.4. Interest After Default............................................................ 25
3.3.5. Late Charge....................................................................... 25
3.4. LIBO Rate Unascertainable: Illegality; Increased Costs; Deposits Not Available............ 26
3.4.1. Unascertainable................................................................... 26
3.4.2. Illegality; Increased Costs; Deposits Not Available............................... 26
3.4.3. Lender's Rights................................................................... 26
4. PAYMENTS........................................................................................ 27
4.1. Payments.................................................................................. 27
4.2. Interest Payment Dates.................................................................... 27
4.3. Prepayments............................................................................... 27
4.3.1. Voluntary Prepayments............................................................. 27
4.3.2. Mandatory Prepayment / Collateral Substitution.................................... 28
4.4. Prepayment Fee............................................................................ 28
4.5. Additional Payment Obligations............................................................ 29
4.6. Additional Compensation in Certain Circumstances.......................................... 29
4.6.1. Increased Costs Resulting from Taxes, Etc......................................... 29
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4.6.2. Indemnity........................................................................ 29
5. REPRESENTATIONS AND WARRANTIES.................................................................. 30
5.1. Representations and Warranties............................................................ 30
5.1.1. Organization and Qualification.................................................... 30
5.1.2. Single Asset Borrower............................................................. 30
5.1.3. Power and Authority............................................................... 31
5.1.4. Validity and Binding Effect....................................................... 31
5.1.5. No Conflict....................................................................... 31
5.1.6. Litigation........................................................................ 31
5.1.7. Title to Collateral Pool Properties............................................... 32
5.1.8. Use of Proceeds................................................................... 32
5.1.9. Full Disclosure................................................................... 32
5.1.10. Taxes............................................................................. 32
5.1.11. Consents and Approvals............................................................ 32
5.1.12. No Event of Default; Compliance with Instruments.................................. 33
5.1.13. Security Interests................................................................ 33
5.1.14. Mortgage Liens.................................................................... 33
5.1.15. Insurance......................................................................... 34
5.1.16. Material Contracts; Burdensome Restrictions....................................... 34
5.1.17. Investment Companies; Regulated Entities.......................................... 34
5.1.18. Pension Plans and Benefit Arrangements............................................ 34
5.1.19. Other Indebtedness................................................................ 35
5.1.20. Solvency.......................................................................... 35
5.1.21. Agreements........................................................................ 36
5.1.22. No Bankruptcy Filing.............................................................. 36
5.1.23. Location of Chief Executive Offices............................................... 36
5.1.24. Compliance........................................................................ 36
5.1.25. Not a Foreign Person.............................................................. 36
5.1.26. Labor Matters..................................................................... 36
5.1.27. Condemnation...................................................................... 36
5.1.28. Utilities and Public Access....................................................... 37
5.1.29. No Joint Assessment; Separate Lots................................................ 37
5.1.30. Assessments....................................................................... 37
5.1.31. No Liabilities.................................................................... 37
5.1.32. No Prior Assignment............................................................... 37
5.1.33. Certificate of Occupancy.......................................................... 38
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5.1.34. Intellectual Property............................................................ 38
5.1.35. Conduct of Business.............................................................. 38
5.1.36. Title Insurance.................................................................. 38
5.1.37. No Default....................................................................... 38
5.1.38. Condition of the Collateral Pool Properties...................................... 38
5.1.39. Non-Residential Leases........................................................... 39
5.1.40. No Low Income Housing Tax Credit................................................. 39
5.1.41. No Restrictions.................................................................. 39
5.1.42. No Adverse Affect on the Loan.................................................... 39
5.1.43. Term of Leases................................................................... 39
5.2. Updates to Schedules..................................................................... 39
5.3. Survival of Representations and Warranties............................................... 40
6. CONDITIONS OF LENDING.......................................................................... 40
6.1. Initial Borrowing Tranche................................................................ 40
6.1.1. Delivery of Loan Documents....................................................... 40
6.1.2. Officer's Certificate............................................................ 40
6.1.3. Secretary's Certificate.......................................................... 41
6.1.4. Opinion of Counsel............................................................... 41
6.1.5. Legal Details.................................................................... 41
6.1.6. Payment of Fees.................................................................. 41
6.1.7. Consents......................................................................... 42
6.1.8. Officer's Certificate Regarding No Material Adverse Change....................... 42
6.1.9. No Violation of Laws............................................................. 42
6.1.10. No Actions or Proceedings........................................................ 42
6.1.11. Collateral Initially Included in Collateral Pool................................. 42
6.1.12. Other Conditions................................................................. 42
6.2. Each Additional Borrowing Tranche........................................................ 42
7. COVENANTS...................................................................................... 43
7.1. Covenants................................................................................ 43
7.1.1. Preservation of Existence........................................................ 43
7.1.2. Maintenance of Real Estate Properties and Leases................................. 43
7.1.3. Collateral Agreements............................................................ 44
7.1.4. Inspection Rights................................................................ 44
7.1.5. Single Asset Borrower............................................................ 44
7.1.6. Use of Proceeds.................................................................. 44
7.1.7. Further Assurances............................................................... 44
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7.1.8. Collateral Pool Properties........................................................ 44
7.1.9. Subsequent Periodic Appraisals and Valuations..................................... 45
7.1.10. Special ERISA Related Covenants................................................... 45
7.1.11. Indebtedness...................................................................... 46
7.1.12. Liens............................................................................. 46
7.1.13. Liquidations, Mergers, Consolidations, Acquisitions............................... 47
7.1.14. Dispositions of Assets or Affiliates.............................................. 47
7.1.15. Affiliate Transactions............................................................ 47
7.1.16. Continuation of or Change in Business............................................. 47
7.1.17. Changes in Organizational Documents............................................... 47
7.1.18. Properties Under Development...................................................... 47
7.1.19. Further Documentation............................................................. 48
7.1.20. Compliance with Lender Requirements............................................... 48
7.1.21. Subordination of Leases........................................................... 48
7.1.22. Enforceability of Loan Documents.................................................. 48
7.1.23. ERISA Matters..................................................................... 49
7.2. Reporting Requirements.................................................................... 49
7.2.1. Notice of Default................................................................. 49
7.2.2. Notice of Litigation.............................................................. 49
7.2.3. Notice of Material Adverse Change................................................. 50
8. DEFAULT......................................................................................... 50
8.1. Events of Default......................................................................... 50
8.1.1. Payments Under Loan Documents..................................................... 50
8.1.2. Breach of Representation or Warranty.............................................. 50
8.1.3. Breach of Covenant................................................................ 50
8.1.4. Event of Default under the Loan Documents......................................... 50
8.1.5. Final Judgments or Orders......................................................... 51
8.1.6. Notice of Lien or Assessment...................................................... 51
8.1.7. Insolvency........................................................................ 51
8.1.8. Cessation of Business............................................................. 51
8.1.9. Lien Priority..................................................................... 51
8.1.10. Bankruptcy and Other Proceedings.................................................. 52
8.2. Consequences of Event of Default.......................................................... 52
8.3. Notice of Sale............................................................................ 52
9. MISCELLANEOUS................................................................................... 52
9.1. Cooperation by Borrower; Borrower's Obligations........................................... 52
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9.2. Successors and Assigns.................................................................... 52
9.3. Modifications, Amendments or Waivers...................................................... 52
9.4. Forbearance............................................................................... 53
9.5. Remedies Cumulative....................................................................... 53
9.6. Reimbursement and Indemnification of Lender and Servicer by Borrower; Taxes............... 53
9.7. Holidays.................................................................................. 54
9.8. Notices................................................................................... 54
9.9. Severability.............................................................................. 55
9.10. Governing Law; Consent to Jurisdiction and Venue.......................................... 56
9.11. Prior Understanding....................................................................... 56
9.12. Duration; Survival........................................................................ 56
9.13. Disclosure of Information................................................................. 56
9.14. Exceptions................................................................................ 57
9.15. Relationship of Parties; No Third Parties Benefited....................................... 57
9.16. Authority to File Notices................................................................. 57
9.17. WAIVER OF TRIAL BY JURY................................................................... 57
9.18. Interpretation............................................................................ 58
9.19. Brokerage Fee............................................................................. 58
9.20. Advertising............................................................................... 58
9.21. Time of Essence........................................................................... 58
9.22. Counterparts.............................................................................. 58
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CREDIT AGREEMENT
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THIS CREDIT AGREEMENT ("Agreement") is dated as of May __, 2000 and is
made by and among Xxxxx Property Holdings Lincoln Towers L.L.C., a Virginia
limited liability company, having an address at care of the Xxxxxxx X. Xxxxx
Companies, 0000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx
Xxxxx, and Xxxxx Property Holdings XxXxxxx Court L.L.C., a Delaware limited
liability company, having an address at care of the Xxxxxxx X. Xxxxx Companies,
0000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx Xxxxx, and
Columbia National Real Estate Finance, Inc., a Maryland corporation
("Columbia"), having an address at 0000 Xxxxxxxx Xxxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxx 00000, and for the sole purpose of agreeing to the provisions of
Sections 2.4, 2.10 and 2.15 of this Agreement, Xxxxxxx X. Xxxxx Residential
Realty, L.P, a Delaware limited partnership, having an address at care of the
Xxxxxxx X. Xxxxx Companies, 0000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxxxx Xxxxx.
RECITALS
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WHEREAS, Borrower desires to obtain a revolving credit loan from
Lender in an amount up to, but not exceeding Three Hundred Million and NO/100
Dollars ($300,000,000);
WHEREAS, Borrower has offered to grant Lender a security interest in
certain real properties and other assets owned by Borrower as security for
Borrower's repayment of such revolving credit loan; and
WHEREAS, Lender is willing to make a revolving credit loan to Borrower
secured by an interest in such real properties and other assets owned by
Borrower.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
1. DEFINITIONS
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1.1. Definitions.
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In addition to words and terms defined elsewhere in this Agreement,
the following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
"Addition Fee" shall have the meaning set forth in Section 2.9.3.
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"Additional Collateral Facility" shall mean the amount of any increase
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in the Maximum Facility Available provided to Borrower hereunder and calculated
as follows: (i) with respect to any real property to be included in the
Collateral Pool pursuant to the provisions of Section 2.9, sixty-five percent
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(65%) of the Market Value of each such real property, and (ii) with respect to
any increase in the Market Value of any Collateral Pool Property as determined
pursuant to Section 2.13, sixty-five percent (65%) of such increase in the
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Market Value of such Collateral Pool Property.
"Affiliate" or "Affiliates" as to any Person shall mean any other
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Person (i) which directly or indirectly controls, is controlled by, or is under
common control with such Person, (ii) which beneficially owns or holds 5% or
more of any class of the voting or other equity interests of such Person, or
(iii) 5% or more of any class of voting interests or other equity interests of
which is beneficially owned or held, directly or indirectly, by such Person.
Control, as used in this definition, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, including the power to elect a majority of the directors
or trustees of a corporation or trust, as the case may be.
"Agreement" shall mean this Credit Agreement, as the same may be
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supplemented or amended from time to time, including all schedules attached
hereto.
"Allonge" shall have the meaning set forth in Section 2.9.2.2.
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"Appraisal" shall mean an appraisal commissioned by Borrower, at
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Borrower's sole cost and expense, performed in accordance with Lender's then
current requirements, and submitted to Lender in connection with Lender's
determination of the Market Value.
"Appraisal Addition Fee" shall have the meaning set forth in Section
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2.13.
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"Assets" shall mean all Real Estate Properties and other assets owned
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by a Person and its consolidated and unconsolidated Affiliates, including, but
not limited to, the Collateral.
"Authorized Officer" shall mean those individuals, designated by
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written notice to Lender from Borrower, authorized to execute notices, reports
and other documents on behalf of Borrower required hereunder; provided, further,
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that the individuals so designated as the Authorized Officers of Borrower shall
be the sole representatives of Borrower for the purpose of giving or receiving
any notices permitted or required by this Agreement. Borrower may amend such
list of individuals from time to time by giving written notice of such amendment
to Lender.
"Available Credit Commitment" shall mean, at any given time, the
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lesser of: (i) the Commitment less the Loan; or (ii) the maximum aggregate
amount of the Loan which would be permitted to be outstanding from time to time
by the Sublimits as set forth in Section 2.1.1 less the Loan.
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"Base Rate" shall mean the LIBO Rate plus the Margin.
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"Benefit Arrangement" shall mean at any time an "employee benefit
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plan," within the meaning of Section 3(3) of ERISA, including without limitation
a Pension Plan or a Multiemployer Plan and which is maintained, sponsored or
otherwise contributed to by any member of the ERISA Group.
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"Borrower" shall mean, collectively, Xxxxx Property Holdings Lincoln
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Towers L.L.C. and Xxxxx Property Holdings XxXxxxx Court L.L.C., together with
any Proposed Borrower that joins in this Credit Agreement pursuant to the terms
and conditions of Section 2.9.2.
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"Borrower's knowledge" or words of like import shall mean, except as
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otherwise expressly provided herein, the actual knowledge (without any
presumption of independent investigation) of all Authorized Officers.
"Borrowing Date" shall mean, with respect to any Borrowing Tranche,
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the date of borrowing, which shall be a Business Day.
"Borrowing Tranche" shall mean each advance hereunder having a
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particular Interest Period outstanding at any one time. Two (2) or more
Borrowing Tranches may be combined to form a single Borrowing Tranche with the
same Interest Period (a) without Prepayment Fee or other penalty or fee in the
event two (2) or more Borrowing Tranches are advanced or mature and are renewed
at the same time with the same Interest Period or (b) with the applicable
Prepayment Fee if one (1) or more Borrowing Tranches are advanced or prepaid and
at the request of the Borrower then combined with one (1) or more other
Borrowing Tranches with the same Interest Period. For all purposes hereunder,
all Prime Rate fundings shall be aggregated and deemed a single Borrowing
Tranche.
"Business Day" shall mean any day other than (i) a Saturday or Sunday
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or a legal holiday on which either Lender or Servicer is closed for business,
and (ii) any day on which business is not carried on in the London interbank
market.
"Closing Date" shall mean the date on which this Agreement is
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executed. The closing shall take place on the Closing Date at the offices of
Lender's counsel, or at such other time and place as the parties agree.
"Collateral" shall mean the Collateral Pool Properties, and all other
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property of Borrower on which liens and security interests have been granted for
the benefit of Lender to secure the Loan and all other obligations of Borrower
under the Collateral Pool Property Documents. Lender's security interest in the
Collateral shall consist of first priority liens on the particular Collateral
Pool Property.
"Collateral Agreements" shall mean (a) any agreements between Borrower
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and Lender for the purpose of establishing replacement reserves for the
Collateral Pool Properties or a particular Collateral Pool Property, including
(1) agreements establishing a fund to assure the completion of repairs or
improvements specified in any such agreement, or (2) agreements assuring a
reduction of the outstanding principal balance of the Loan if the occupancy
income from a Collateral Pool Property does not increase to a level specified in
such agreement, or (b) any other agreement or agreements between Borrower and
Lender which provide for the establishment of any other fund, reserve or
account, all of the foregoing to be imposed only pursuant to an express written
agreement between Borrower and Lender entered into (x) at the
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Closing Date, or (y) with respect to real properties added to the Collateral
Pool pursuant to Section 2.9, at or prior to such addition.
"Collateral Pool", "Collateral Pool Property" and "Collateral Pool
--------------- ------------------------ ---------------
Properties" shall mean the Real Estate Properties or a Real Estate Property, as
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the case may be, as set forth in Schedule 1.1(A), together with any real
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properties, which have been added into the Collateral Pool pursuant to Section
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2.9.2 and less any real properties which have been released from the Collateral
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Pool pursuant to Section 2.10.
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"Collateral Pool Property Documents" shall mean the then current
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versions of such mortgages, deeds of trust, or deeds to secure debt, assignments
of leases and rents, guaranties, indemnities, Collateral Agreements, O&M
Programs, and any other documents now or in the future executed by Borrower, any
guarantor or any other person or entity in connection with the Loan or the
Collateral, as such documents may be amended from time to time, provided,
however, that any future versions of such documents shall include the exceptions
and waivers customarily given by Lender to Borrower. The Collateral Pool
Property Documents shall include those documents set forth in Schedule 1.1(B).
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"Collateral Pool Value" shall mean the sum of the aggregate of the
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Market Values for the Collateral Pool Properties. Collateral Pool Value may be
(i) increased as a result of (a) an increase in the Market Value(s) of one (1)
or more Collateral Pool Properties following an Appraisal pursuant to Section
2.13, (b) an addition of a real property pursuant to Section 2.9, or (c) a
Valuation (but only in the circumstances described in Section 2.14.3), or (ii)
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decreased as a result of (a) a decrease in the Market Value(s) of one (1) or
more Collateral Pool Properties following a Valuation pursuant to Section 2.14,
or (b) a release of one (1) or more Collateral Pool Properties pursuant to
Section 2.10.
"Columbia" shall have the meaning set forth in the first paragraph of
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this Agreement.
"Commitment" shall mean Three Hundred Million and NO/100 Dollars
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($300,000,000.00).
"Credit Facility" shall mean Lender's obligation to disburse funds
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under this Agreement.
"Dollar, U.S. Dollars" and the symbol $ shall mean lawful money of the
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United States of America.
"ERISA" shall mean the Employee Retirement Income Security Act of
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1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
"ERISA Group" shall mean, at any time, Borrower and all members of a
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controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
Borrower, are treated as a single employer under Section 414 of the Internal
Revenue Code.
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"Event of Default" shall mean any of the events described in Section
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8.1 and referred to therein as an "Event of Default."
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"Expiration Date" shall mean the earlier of (i) May 31, 2010, (ii) the
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date specified by Borrower as the Expiration Date under Section 2.16 or (iii)
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the date the Credit Facility is terminated by Lender under Section 2.10.
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"Facility Debt Service" shall mean the principal, in the event
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Borrower is required to pay monthly installments of principal pursuant to
Section 4.5, the interest due on the Loan hereunder and under the Revolving
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Credit Note and any amounts payable under Section 3.2.2, exclusive of any
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principal payments required under Section 4.3.2. Facility Debt Service shall be
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annualized at the time of determination based on the debt service then accruing
under all outstanding Borrowing Tranches, notwithstanding the duration of any
Interest Period.
"Facility Debt Service Coverage Ratio" shall mean at the time of
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determination the Net Operating Income for the then current period of the
Collateral Pool Properties divided by the Facility Debt Service for the then
current period.
"Xxxxxxx Mac" shall mean the Federal Home Loan Mortgage Corporation.
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"GAAP" shall mean generally accepted accounting principles as are in
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effect from time to time, subject to the provisions of Section 1.3, and applied
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on a consistent basis both as to classification of items and amounts.
"Guarantor" shall mean Xxxxxxx X. Xxxxx Residential Realty LP.
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"Guaranty" shall mean the guaranty agreement executed by Guarantor in
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favor of Lender, substantially in the form attached hereto as Schedule 1.1.(C).
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"Inclusion Date" shall have the meaning given to such term in Section
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2.9.2.2.
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"Insolvency Proceeding" shall mean, with respect to any Person: (a) a
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case, action or proceeding with respect to such Person (i) before any court or
any other Official Body under any bankruptcy, insolvency, reorganization or
other similar Law now or hereafter in effect, or (ii) for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of Borrower or an Affiliate, or otherwise relating to the
liquidation, dissolution, winding-up or relief of such Person, or (b) any
general assignment for the benefit of creditors, composition, marshaling of
assets for creditors, or other, similar arrangement in respect of such Person's
creditors generally or any substantial portion of its creditors undertaken under
any Law.
"Interest Period" shall have the meaning assigned to such term in
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Section 3.3.
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"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
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as the same may be amended or supplemented from time to time, and any successor
statute of similar import, and the rules and regulations thereunder, as from
time to time in effect.
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"Law" shall mean any law (including common law), constitution,
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statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Official Body.
"Lender" shall mean at any time and from time to time, the entity that
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is the holder of the Revolving Credit Note, provided that Lender may in its sole
discretion designate Servicer to perform some or all of Lender's obligations
under this Agreement, the Revolving Credit Note and the other Loan Documents.
Promptly after the initial closing under this Agreement, Columbia, the initial
Lender, shall sell the Revolving Credit Note to Xxxxxxx Mac and shall assign all
of its interests in this Agreement and the other Loan Documents to Xxxxxxx Mac,
which shall be Lender for the remainder of the term of this Agreement.
"LIBO Rate" shall mean, with respect to each Borrowing Tranche, the
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rate of interest, rounded to the nearest basis point (i.e. one-hundredth of one
percent (.0001), displayed on the Bloomberg, L.P., page "BBAM", as the British
Bankers Association ("BBA") LIBO Rate (such page, or such other page as may
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replace page BBAM on that service, or at the option of Lender the applicable
page on another credible and generally recognized service which electronically
transmits or displays BBA LIBO Rates is referred to as the "Designated Bloomberg
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Page"), for purposes of calculating effective rates of interest for loans or
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obligations for an amount comparable to such Borrowing Tranche and having a
borrowing date equal to the Borrowing Date and a maturity comparable to the
Interest Period. If the Designated Bloomberg Page is not available but is
generally still published the LIBO Rate for such Interest Period will be the BBA
LIBO Rate most recently published for such Interest Period. In the event the
BBA ceases to set or publish a LIBO Rate, for any Interest Period, or in the
event the Designated Bloomberg Page is no longer generally published, Lender
shall use the U.S. Treasury securities having maturity dates as close as
possible to the applicable Interest Period as an alternative index. In the
event that U.S. Treasury securities having maturity dates as close as possible
to the applicable Interest Period are no longer available, Lender shall, in its
reasonable discretion, designate an alternative index.
"Lien" shall mean any mortgage, deed of trust, deed to secure debt,
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pledge, lien, security interest, charge or other encumbrance or security
arrangement of any nature whatsoever, whether voluntarily or involuntarily
given, including any conditional sale or title retention arrangement, and any
assignment, deposit arrangement or lease intended as, or having the effect of,
security and any filed financing statement or other notice of any of the
foregoing (whether or not a lien or other encumbrance is created or exists at
the time of the filing).
"Loan" shall mean the sum of all Borrowing Tranches outstanding at any
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one time.
"Loan Document" or "Loan Documents" shall mean any or all of this
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Agreement, the Revolving Credit Note, the Guaranty, the Collateral Pool Property
Documents and any other instruments, certificates or documents delivered or
contemplated to be delivered hereunder or thereunder or in connection herewith
or therewith, as the same may be supplemented or amended from time to time in
accordance herewith or therewith.
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"Loan Request" shall have the meaning given to such term in Section
------------ -------
2.5.
---
"Margin" shall mean the applicable percentage set forth in Schedule
------ --------
3.2 or Schedule 3.2A, as the case may be.
--- -------------
"Market Value" shall mean as to each individual Collateral Pool
------------
Property the lesser of (i) the value of each Collateral Pool Property as
determined by Lender in accordance with its then current underwriting policies,
practices and procedures consistently applied, as such Market Value may be (a)
increased as the result of (1) an Appraisal pursuant to the terms of Section
-------
2.13, or (2) a Valuation (but only in the circumstances described in Section
---- -------
2.14.3), (b) established by an addition of a real property pursuant to the terms
------
of Section 2.9 or (c) decreased as the result of a Valuation pursuant to the
-----------
terms of Section 2.14, or (ii) One Hundred and Fifty Three Million Eight Hundred
------------
and Fifty Thousand and NO/100 Dollars ($153,850,000.00). The Market Values of
the Collateral Pool Properties as of the Closing Date are set forth in Schedule
1.1(A).
"Material Adverse Change" shall mean any set of circumstances or
-----------------------
events which (a) has or is then reasonably expected to have any material adverse
effect whatsoever upon the validity or enforceability of this Agreement or the
other Loan Documents taken as a whole, (b) impairs materially or is then
reasonably expected to impair materially the ability of Borrower or Guarantor as
the case may be to duly and punctually pay or perform its Obligations, or (c)
impairs materially or is then reasonably expected to impair materially the
ability of Lender, to the extent permitted, to enforce its legal remedies
pursuant to this Agreement or the other Loan Documents taken as a whole.
"Maximum Facility Available" shall mean at any one time the maximum
--------------------------
amount which Borrower may borrow under this Agreement without violating the
Sublimit set forth in Section 2.1.1.1.
---------------
"Minimum Servicing Fee" shall have the meaning set forth in Section
--------------------- -------
3.2.2.
-----
"Month" shall mean the appropriate calendar month.
-----
"Multiemployer Plan" shall mean any employee benefit plan which is a
------------------
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which Borrower or any member of the ERISA Group is then making or accruing an
obligation to make contributions or, within the preceding five (5) Pension Plan
years, has made or had an obligation to make such contributions.
"Net Operating Income" shall mean an annualized dollar amount equal to
--------------------
all income from the operations of the Collateral Pool Properties that is
available for repayment of debt and return of equity after deducting for
economic vacancy and all expenses (exclusive of Facility Debt Service). Net
Operating Income shall be calculated by Lender for each individual Collateral
Pool Property, in accordance with Lender's then current methodology,
consistently applied, excluding from such calculation expenses from
depreciation, amortization, interest expenses, non-recurring items and capital
expenses, but including in such calculation an assumed
-7-
capital expense reserve in an amount consistent with Lender's then current
requirements for such capital reserves, as of the Closing Date and thereafter
(i) as of each anniversary of the Closing Date, and (ii) upon the inclusion,
deletion or substitution of any real property in the Collateral Pool pursuant to
the provisions hereof.
"Notices" shall have the meaning assigned to that term in Section 9.8.
------- -----------
"O&M Programs" shall mean a written program of operations and
------------
maintenance for a Collateral Pool Property approved in writing by Lender.
"Obligation" shall mean any obligation or liability of Borrower to
----------
Lender, howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due,
under or in connection with this Agreement, the Revolving Credit Note or any
other Loan Document, excluding any Permanent Loan or any other liability of
Borrower to Lender not created under this Agreement, the Revolving Credit Note
or the other Loan Documents.
"Official Body" shall mean any national, federal, state, local or
-------------
other government or political subdivision or any agency, authority, bureau,
commission, department or instrumentality of either, or any court, tribunal,
grand jury or arbitrator, in each case whether foreign or domestic.
"Payment Date" shall have the meaning set forth in Section 4.2.
------------ ------------
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA or any successor.
"Pension Plan" shall mean at any time an employee pension benefit plan
------------
which is covered by Title IV of ERISA or is subject to the minimum funding
standards under Section 412 of the Internal Revenue Code and either (i) is
maintained by any member of the ERISA Group for employees of any member of the
ERISA Group or (ii) has at any time within the preceding five (5) years been
maintained by any entity which was at such time a member of the ERISA Group for
employees of any entity which was at such time a member of the ERISA Group.
"Permanent Loan" shall have the meaning assigned to that term in
--------------
Section 2.12.
------------
"Permanent Loan Collateral" shall have the meaning assigned to that
-------------------------
term in Section 2.12.
------------
"Permitted Exceptions" shall mean:
--------------------
(a) Liens for taxes, assessments, or similar charges, incurred in the
ordinary course of business and which are not yet due and payable;
(b) Liens of mechanics, materialmen, warehousemen, carriers, or other
like Liens, securing obligations incurred in the ordinary course of business
that are not yet due and payable;
-8-
(c) Encumbrances consisting of zoning restrictions, easements or other
restrictions on the use of Real Estate Property, none of which (i) materially
impairs the use of such property or the value thereof, (ii) is violated in any
material respect by existing or proposed structures or land use or (iii) impairs
Borrower's ability to rebuild, repair or restore any improvements located on a
Collateral Pool Property following a casualty;
(d) Liens, security interests and mortgages in favor of Lender for the
benefit of Lender; and
(e) Encumbrances listed as exceptions to Lender's title insurance
policies for the Collateral Pool Properties.
"Person" shall mean any individual, corporation, partnership, limited
------
liability company, association, joint-stock company, trust, unincorporated
organization, joint venture, government or political subdivision or agency
thereof, or any other entity.
"Potential Default" shall mean any event or condition which, with the
-----------------
passage of time, the giving of notice, or a determination by Lender, or any
combination of the foregoing, would constitute an Event of Default.
"Prepayment Fee" shall have the meaning set forth in Section 4.4.
-------------- -----------
"Prime Rate" shall mean the rate of interest per annum established
----------
from time to time and published in the Wall Street Journal as the prime rate, or
-------------------
any comparable publication reasonably selected by Lender in the event the Wall
----
Street Journal no longer publishes the prime rate.
--------------
"Prior Security Interest" shall mean a valid and enforceable perfected
-----------------------
first-priority security interest under the Uniform Commercial Code in the
Collateral which is subject only to Liens for taxes not yet due and payable to
the extent such prospective tax payments are given priority by statute.
"Prohibited Transaction" shall mean any prohibited transaction as
----------------------
defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
which neither an individual nor a class exemption has been issued by the United
States Department of Labor.
"Proposed Borrower" shall mean a single asset entity that is an
-----------------
Affiliate of Borrower or Guarantor and is the owner of a real estate property
which has been proposed to be included in the Collateral Pool, pursuant to the
terms hereof.
"Real Estate Property" or "Real Estate Properties" shall mean any
-------------------- ----------------------
multifamily real property (including any and all leases, rents, equipment and
fixtures related thereto or used in conjunction therewith) located in the United
States of America solely owned by Borrower including all of Lender's present and
future rights, title and interests in such real property as set forth in the
mortgage or deed of trust granted by Borrower in favor of Lender with respect to
such real property.
-9-
"Renewal Request" shall have the meaning given to such term in Section
--------------- -------
3.3.3.
-----
"Reportable Event" shall mean a reportable event described in Section
----------------
4043 of ERISA and regulations thereunder with respect to a Pension Plan or
Multiemployer Plan.
"Revolving Credit Note" shall mean the Multifamily Revolving Credit
---------------------
Note of Borrower, in the face amount of the Commitment, which evidences the
Loan, together with all amendments, extensions, renewals, replacements,
refinancings or refundings thereof in whole or in part.
"Servicer" shall mean any independent contractor appointed by Lender,
--------
at Lender's sole cost and expense, to administer the Credit Facility and the
Loan Documents or otherwise perform certain functions in connection therewith
under the terms of a Servicing Agreement. Pursuant to the terms of any
Servicing Agreement, Lender may designate Servicer to perform some or all of
Lender's obligations under this Agreement, the Revolving Credit Note and the
other Loan Documents.
"Servicing Agreement" shall mean any agreement between Lender and an
-------------------
independent contractor pursuant to which Lender appoints said independent
contractor as Servicer under this Agreement, the Revolving Credit Note and the
other Loan Documents.
"Solvent" shall mean, with respect to any Person on a particular date,
-------
that on such date (i) the fair value of the assets of such Person is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (ii) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (iii) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (iv) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability of such Person after giving
effect to any rights of contribution, subrogation or indemnification of such
Person.
"Streamlined Refinancing Program" shall mean Lender's then current
-------------------------------
program for refinancing a performing loan in its loan portfolio.
"Sublimits" shall have the meaning assigned to that term in Section
--------- -------
2.1.1.
-----
"Substitution Fee" shall have the meaning set forth in Section 2.11.
---------------- ------------
"Substituted Collateral Facility" shall mean the amount equal to
-------------------------------
sixty-five percent (65%) of the excess, if any, of the Market Value of any real
property included in the Collateral
-10-
Pool pursuant to the provisions of Section 2.9 over the Market Value of any real
-----------
property simultaneously released from the Collateral Pool pursuant to the
provisions of Section 2.10. For purposes of this definition, "simultaneously"
------------
shall mean a release under Section 2.10 followed by an addition under Section
------------ -------
2.9, or vice-versa, within ninety (90) days of each other.
---
"Underwriting Fee" shall mean a non-refundable fee in the amount of
----------------
Three Thousand and NO/100 Dollars ($3,000.00) per real property.
"Underwriting Materials" shall mean all materials required by Lender
----------------------
pursuant to Lender's then current loan underwriting requirements.
"Uniform Commercial Code" shall have the meaning assigned to that term
-----------------------
in Section 5.1.13.
--------------
"Unused Facility Fee" shall have the meaning assigned to that term in
-------------------
Section 2.4.
-----------
"Valuation" shall have the meaning set forth in Section 2.14.1.
--------- --------------
"Valuation Caused Decrease" shall have the meaning set forth in
-------------------------
Section 2.14.3.
--------------
"Valuation Caused Increase" shall have the meaning set forth in
-------------------------
Section 2.14.3.
--------------
1.2. Construction.
------------
Unless the context of this Agreement otherwise clearly requires, the
following rules of construction shall apply to this Agreement and each of the
other Loan Documents.
1.2.1. Number; Inclusion.
-----------------
References to the plural include the singular, the plural, the part
and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase `including
without limitation";
1.2.2. Determination.
-------------
References to "determination" of or by Lender shall be deemed to
include good-faith estimates by Lender (in the case of quantitative
determinations) and good-faith beliefs by Lender (in the case of qualitative
determinations) and such determinations shall be conclusive absent manifest
error;
1.2.3. Lender's Discretion and Consent; References to Lender's
-------------------------------------------------------
Requirements.
------------
Whenever Lender is granted the right herein to act in its sole
discretion or to grant or withhold consent such right shall be exercised in good
faith and whenever a reference is made to "Lender's then current requirements",
"Lender's then current programs" or the like, such reference shall be deemed to
mean such requirements, programs and the like as are then standard
-11-
in the secondary multifamily mortgage industry, as such standards are generally
reflected in the then current version of the Xxxxxxx Mac Multifamily
Seller/Servicer Guide with such exceptions and waivers customarily given by
Lender to Borrower and other borrowers;
1.2.4. Documents Taken as a Whole.
--------------------------
The words "hereof," "herein," "hereunder," "hereto" and similar terms
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document as a whole and not to any particular provision of this
Agreement or such other Loan Document;
1.2.5. Headings.
--------
The section and other headings contained in this Agreement or such
other Loan Document and the Table of Contents preceding this Agreement or such
other Loan Document are for reference purposes only and shall not control or
affect the construction of this Agreement or such other Loan Document or the
interpretation thereof in any respect;
1.2.6. Implied References to this Agreement.
------------------------------------
Article, section, subsection, clause, and schedule references are to
this Agreement or other Loan Documents, as the case may be, unless otherwise
specified and schedules attached hereto are incorporated herein by this
reference;
1.2.7. Persons.
-------
Reference to any Person includes such Person's successors and assigns
but, if applicable, only if such successors and assigns are permitted by this
Agreement or such other Loan Document, as the case may be, and reference to a
Person in a particular capacity excludes such Person in any other capacity;
1.2.8. Modifications to Documents.
--------------------------
Reference to any agreement (including this Agreement and any other
Loan Document together with any schedules and exhibits hereto or thereto),
document or instrument means such agreement, document or instrument as amended,
modified, replaced, substituted for, superseded or restated;
1.2.9. From, To and Through.
--------------------
Relative to the determination of any period of time, "from" means
"from and including," "to" means "to but excluding," and "through" means
"through and including"; and
1.2.10. Conflicts with Other Loan Documents.
-----------------------------------
In the event of any conflict between the terms and provisions of this
Agreement and any other Loan Document, the terms and provisions of this
Agreement shall prevail.
-12-
1.3. Accounting Principles.
---------------------
Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
on an accrual basis in accordance with GAAP (including principles of
consolidation where appropriate) and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP. In the event of any change
after the date hereof in GAAP, and if such change would result in the inability
to determine compliance with any financial covenants set forth herein, then the
parties hereto agree to endeavor, in good faith, to agree upon an amendment to
this Agreement that would adjust such financial covenants in a manner that would
not affect the substance thereof, but would allow compliance therewith to be
determined in accordance with Borrower's financial statements at that time.
2. REVOLVING CREDIT FACILITY
-------------------------
2.1. Revolving Credit Commitment.
---------------------------
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, Lender agrees to advance funds
to Borrower at any time or from time to time on or after the date hereof until
the Expiration Date, provided that after giving effect to any particular advance
the Loan amount outstanding at any one time shall not exceed the amount of the
Commitment which would be permitted to be outstanding under the Sublimits as the
same may be constituted at such time. Within such limits of time and amount and
subject to the other provisions of this Agreement, Borrower may borrow, repay
and reborrow pursuant to this Section 2.1.
------------
2.1.1. Sublimits.
---------
Notwithstanding anything to the contrary set forth herein, Borrower
may borrow hereunder only to the extent that after giving effect to such
borrowing:
2.1.1.1. the Loan shall not exceed sixty-five percent (65%) of
the Collateral Pool Value;
2.1.1.2. the Facility Debt Service Coverage Ratio shall not be
less than 1.35 : 1.00; and
2.1.1.3. the number of Borrowing Tranches outstanding shall not
exceed fifteen (15).
2.1.2. Term.
----
The term of the Credit Facility shall commence on the Closing Date and
terminate on the Expiration Date unless otherwise terminated earlier pursuant to
the provisions hereof.
-13-
2.2. Nature of Lender's Obligations with Respect to the Loan.
-------------------------------------------------------
Subject to the provisions of this Agreement, the aggregate amount of
the Loan outstanding hereunder at any time shall never exceed the amount of the
Commitment which would be permitted to be outstanding under the Sublimits as the
same may be constituted at such time. Lender shall have no obligation to make
any advance hereunder on or after the Expiration Date.
2.3. Fees.
----
2.3.1. Fees Paid Prior to the Closing Date.
-----------------------------------
Lender acknowledges that, in addition to Borrower's obligations under
Section 6.1.6, Borrower has paid to Lender, as consideration for Lender's costs
-------------
in underwriting the Available Credit Commitment, an Underwriting Fee for each
property described at Schedule 1.1(A) and proposed by Borrower to be included in
---------------
the Collateral Pool on the Closing Date.
2.3.2. Fees Due on the Closing Date.
----------------------------
Borrower shall pay to Lender on the Closing Date (simultaneously with
the closing of the Credit Facility), as further consideration for Lender's cost
in underwriting the Commitment, a non-refundable transaction fee in the amount
of Six Hundred and Eighty Seven Thousand Five Hundred and NO/100 Dollars
($687,500.00).
2.4. Unused Facility Fee.
-------------------
Accruing from the date hereof until the Expiration Date, Borrower
agrees to pay to Lender, as consideration for Lender's Commitment hereunder, a
nonrefundable unused facility fee (the "Unused Facility Fee") equal to ten basis
-------------------
points (.0010) per annum (computed on the basis of a year of 360 days and actual
days elapsed) on the average daily difference between the amount of (i) the
Maximum Facility Available, and (ii) the principal amount of the Loan
outstanding. In the event that Borrower exercises its right under Section 2.10
------------
to release all assets in the Collateral Pool from any Lien securing the Loan
Documents and thereby creates a Maximum Facility Available of zero, the Unused
Facility Fee shall, notwithstanding any other provisions hereunder, be
calculated with an assumed Maximum Facility Available equal to One Hundred
Million and NO/100 Dollars ($100,000,000.00); in such event all Unused Facility
Fees shall be payable as a primary obligation of Guarantor. In the event
Borrower elects to terminate the Credit Facility prior to the fifth (5th)
anniversary of the Closing Date in accordance with the provisions of Section
-------
2.16, Borrower shall, as a condition precedent to such termination, pay Lender a
----
liquidated Unused Facility Fee to be calculated with an assumed Maximum Facility
Available equal to One Hundred Million and NO/100 Dollars ($100,000,000.00) for
each Month which will elapse from the Month the termination notice is delivered
pursuant to Section 2.16 to the Month in which the fifth (5th) anniversary date
------------
of the Closing Date occurs, such monthly liquidated Unused Facility Fees to be
discounted to net present value as of the date such termination notice is
delivered, at a discount rate of ten percent (10%) per year, together with any
regular Unused Facility Fee due and payable through such Expiration Date. In the
event
-14-
Borrower elects to terminate the Credit Facility on or after the fifth (5th)
anniversary date of the Closing Date in accordance with the provisions of
Section 2.16, Borrower shall, as a condition precedent to such termination, pay
------------
Lender the applicable Unused Facility Fee accruing through such Expiration Date
and no additional Unused Facility Fee shall accrue from and after such date.
Except as otherwise provided in connection with Borrower's election to terminate
this Credit Facility prior to tenth (10th) anniversary of the Closing Date, all
Unused Facility Fees shall be payable monthly in arrears at the same time and in
the same manner as are payments of debt service under Section 4.2 hereof.
-----------
2.5. Loan Requests.
-------------
Except as otherwise provided herein, Borrower may from time to time
prior to the Expiration Date request Lender to make an advance to the extent of
the Available Credit Commitment, by delivering to Lender via facsimile, a
request therefor (a "Loan Request") in the form attached hereto as Schedule 2.5.
------------
Borrower may at any one time submit one or more Loan Requests; each Loan Request
shall specify the items set forth on Schedule 2.5, including, but not limited to
------------
(i) the proposed Borrowing Date (which Borrowing Date shall be in accordance
with the requirements of Section 3.3); (ii) the amount of the proposed Borrowing
-----------
Tranche, which shall each not be less than Three Million and NO/100 Dollars
($3,000,000.00); (iii) the Interest Period for purposes of determining the LIBO
Rate, if a Base Rate funding is requested, (iv) in the case of a Loan Request
for a Base Rate Borrowing Tranche, the Base Rate and the LIBO Rate and Margin
that comprise such Base Rate; and (v) in the event the Guaranty is then in
effect, a reaffirmation of Guarantor's obligations with respect to both the Base
Rate Borrowing Tranche to be created pursuant to the Loan Request and any
outstanding Base Rate Borrowing Tranche. Lender shall be under no obligation to
make any advance hereunder absent Lender's receipt of a Loan Request which is
fully completed, authorized and executed by an Authorized Officer of Borrower
and Servicer, and, if applicable, reaffirmed by Guarantor.
2.6. The Loan.
--------
After receipt by Lender of a Loan Request pursuant to Section 2.5, and
-----------
subject to the Sublimits of Section 2.1.1 and the provisions of Section 6.2,
------------- -----------
Lender shall fund the amount requested in such Loan Request to Borrower in U.S.
Dollars and immediately available funds on the Borrowing Date. The Borrowing
Date shall at the option of Borrower be either (i) the Business Day that Lender
receives a fully completed, authorized and executed Loan Request, provided that
Lender receives such Loan Request prior to 10:00 a.m. Eastern Time on such
Business Day or (ii) the next Business Day following Lender's receipt of the
fully completed, authorized and acknowledged Loan Request. Any Loan Request
received prior to the Business Day before the proposed Borrowing Date shall be
null and void and of no further force and effect. Lender shall fund the amounts
requested in any Loan Request by 3:00 p.m. Eastern Time on the Borrowing Date.
-15-
2.7. Revolving Credit Note.
---------------------
The obligation of Borrower to repay the aggregate unpaid principal
amount of the Loan, together with interest thereon, shall be evidenced by the
Revolving Credit Note dated the Closing Date payable to the order of Lender in a
face amount equal to the Commitment.
2.8. Use of Proceeds.
---------------
The proceeds of the Loan may be used for any lawful purpose and as set
forth in Borrower's organizational documents.
2.9. Additions to the Collateral Pool
--------------------------------
2.9.1. Procedure for Proposing a Real Property for Inclusion in
--------------------------------------------------------
the Collateral Pool.
-------------------
Borrower or Proposed Borrower, as the case may be, may propose to
include one or more real property(ies) in the Collateral Pool by delivering to
Lender (i) a written proposal for inclusion of the proposed real property(ies),
(ii) an Underwriting Fee for each proposed real property, and (iii) the
Underwriting Materials with respect to the proposed real property(ies) and with
respect to Proposed Borrower, if applicable, provided that no more than one (1)
-------------
such proposal shall be submitted to Lender in any one (1) Month. Upon Lender's
receipt of the Underwriting Fee and all Underwriting Materials, Lender shall
notify Borrower or Proposed Borrower of the same. The determination of whether
Borrower or Proposed Borrower has provided Lender with all Underwriting
Materials shall be in Lender's discretion. For purposes of this Section 2.9,
-----------
Borrower or Proposed Borrower may submit a real property for inclusion in the
Collateral Pool, if Borrower or Proposed Borrower has a contract to purchase
such real property, provided that Borrower or Proposed Borrower consummates the
-------------
purchase of such real property on or before the date such real property is
proposed to be included in the Collateral Pool. The Underwriting Fee shall be
deemed earned upon submission, whether or not Lender approves or disapproves
such real property for inclusion hereunder. Borrower shall pay all reasonable
costs and expenses that Lender or Servicer incur in connection with any such
proposal to include a real property in the Collateral Pool, including, but not
limited to attorney's fees, whether or not Lender approves or disapproves such
real property for inclusion hereunder.
2.9.2. Procedure for Including a Real Property in the Collateral
---------------------------------------------------------
Pool.
----
2.9.2.1. With respect to any real property that Borrower or
Proposed Borrower, as the case may be, proposes for inclusion in the Collateral
Pool, Lender shall, within thirty (30) days of the date on which Lender notifies
Borrower or Proposed Borrower that it has received all Underwriting Materials,
use its best efforts to accept or reject in writing the proposed real property
on the basis of whether such proposed real property meets Lender's then current
requirements for inclusion in the Collateral Pool, and in the event that Lender
accepts the proposed real property for inclusion in the Collateral Pool, Lender
shall use best efforts to include such real property in the Collateral Pool
within thirty (30) days of the date of such acceptance, subject to Borrower's or
Proposed Borrower's timely performance of all
-16-
obligations listed under Section 2.9.2.2. Notwithstanding anything contained
-------
herein to the contrary, no real property shall be submitted for inclusion which
has a Market Value of less than Seven Million and Seven Hundred Thousand and
NO/100 Dollars ($7,700,000.00). The failure of Lender to respond to Borrower or
Proposed Borrower's request within such thirty (30) day period shall be deemed a
rejection by Lender of the proposal to include the real property in the
Collateral Pool. If Lender provide(s) the reason(s) for such rejection, Borrower
or Proposed Borrower shall have forty-five (45) days to cure or otherwise
resolve to the satisfaction of Lender, the objections of Lender to such proposed
real property (Lender, in its sole discretion, may require that Borrower provide
within such forty-five (45) day cure period necessary updates of any or all of
the Underwriting Materials). If Borrower or Proposed Borrower does not satisfy
Lender's objections, then such proposal shall be deemed terminated; provided,
however, such termination shall not prevent Borrower or Proposed Borrower from
subsequently resubmitting a real property (together with an Underwriting Fee and
the Underwriting Materials) for inclusion in the Collateral Pool, further
provided that Borrower may not resubmit the same real property for inclusion in
the Collateral Pool more often than one (1) time in any twelve (12) month
period.
2.9.2.2. If and upon the date (the "Inclusion Date") of
--------------
acceptance by Lender of a real property submitted for inclusion in the
Collateral Pool (such acceptance to be in writing, together with Lender's
determination of the Market Value of such real property and the Net Operating
Income of such property), whether following the initial proposal of such real
property or after satisfying any objections of Lender, such real property shall
be added to the Collateral Pool, provided that Borrower or Proposed Borrower (i)
-------- ----
pay the Addition Fee and/or the Substitution Fee pursuant to Sections 2.9.3
--------------
and/or 2.11, (ii) pay all costs and expenses that Lender or Servicer incur in
----
connection with the inclusion of such real property, including, but not limited
to, attorney's fees, and (iii) submit the following to Lender: (1) all
Collateral Pool Property Documents requested by Lender fully executed and where
appropriate duly acknowledged and filed of record in the appropriate official
public records, (2) copies of all filing receipts and acknowledgements issued by
any governmental authority evidencing any recordation or filing necessary to
perfect Lender's Lien on the subject real property or other evidence
satisfactory to Lender of such recordation and filing of the mortgage, (3)
evidence satisfactory to Lender that (x) in the case of personal property, the
Lien constitutes a Prior Security Interest in favor of Lender and, (y) in the
case of real property, the mortgage constitutes a valid and perfected first
priority Lien in favor of Lender (such evidence to be in the form of a title
insurance policy acceptable to Lender in both form and substance), and (4)
evidence satisfactory to Lender that subsequent to the addition of the proposed
real property, the Collateral Pool Properties shall be located in at least two
standard metropolitan statistical areas, as determined by Lender in its
discretion, provided however that, the requirements of this subsection (4) shall
not apply in the event that at the time of the proposed inclusion there are no
real properties in the Collateral Pool and only one real property is proposed
for inclusion hereunder, and (iv) in the case of a Proposed Borrower, such
Proposed Borrower shall execute (1) an allonge to the Revolving Credit Note (the
"Allonge") and (2) a joinder agreement in form satisfactory to Lender in its
-------
sole discretion. If Borrower or Proposed Borrower fails to perform any of the
acts, where applicable, or to submit any of the documents and evidence listed
under (i), (ii) and (iii) above together with any and all updates to the
Underwriting Materials reasonably requested by Lender within forty-five (45)
days of the Inclusion Date, Lender may at its option reject the proposed real
property and terminate such proposal. In the event that Borrower or
-17-
Proposed Borrower performs all of the acts and submits all of the documents and
evidence listed in (i), (ii) and (iii) within forty-five (45) days of the
Inclusion Date the proposed real property shall be deemed a Real Estate Property
and added to the Collateral Pool.
2.9.3. Addition Fee.
------------
Subject to the provisions of Section 2.11 below, Borrower shall pay a
------------
fee (the "Addition Fee") equal to the sum of (i) an amount equal to twenty-five
basis points (.0025) of the Additional Collateral Facility of any real property
added to the Collateral Pool and (ii) an amount equal to fifteen basis points
(.0015) of the Additional Collateral Facility of any real property added to the
Collateral Pool, provided however, that the amount determined in (ii) above
shall be no less than Twenty-Five Thousand and NO/100 Dollars ($25,000.00) and
no more than Seventy-Five Thousand and NO/100 Dollars ($75,000.00). Subject to
the provisions of Section 2.11, Borrower shall pay to Lender the Addition Fee
------------
upon consummation of the addition of the proposed real property into the
Collateral Pool.
2.10. Release of Collateral.
---------------------
Other than payment in full of all principal and interest then
outstanding on the Loan on the Expiration Date, in which event no advance
written notice shall be necessary (except as required pursuant to Section 2.16),
-------------
Lender shall, upon thirty (30) days advance written notice, release the Liens
granted hereunder with respect to a Collateral Pool Property, provided that (i)
prior to such release Borrower shall pay Lender and Servicer all reasonable
costs and expenses that Lender or Servicer incur in connection with such
release, (ii) at the time of the request for such release, no Event of Default
or Potential Default shall exist, and (iii) after giving effect to such release,
no Event of Default or Potential Default shall exist, and Borrower will be in
compliance with all provisions hereof, including the Sublimits set forth in
Section 2.1.1, provided further that if such release shall cause Borrower to be
-------------
in non-compliance with the Sublimits, Borrower shall have the opportunity to
cure the same by either adding a real property pursuant to Section 2.9 prior to
-----------
such release, or prepaying, in accordance with the provisions of Section 4.3, so
-----------
much of the Loan as is necessary to cause compliance with this Section 2.10.
------------
Notwithstanding such thirty (30) day time period to obtain a release, Lender
shall upon three (3) Business Days notice provide a "payoff letter" stating the
amount necessary to obtain a release so as to effectuate a sale or refinance of
the subject Collateral Pool Property. Upon the release of a Lien on a real
property, if the owner of such property owns no other properties in the
Collateral Pool, such owner shall be released from its obligations under the
Loan Documents, except as otherwise expressly provided in the Loan Documents.
Furthermore, upon the release of a Lien on a real property, the Collateral Pool
Value shall be decreased by the then current Market Value attributable to such
released Property. Borrower shall have the right to (x) repay the outstanding
principal balance of the Loan (subject to any Prepayment Fee due hereunder), or
(y) a release of all assets in the Collateral Pool from any Lien securing the
Loan Documents, thereby creating a Collateral Pool Value, Available Credit
Commitment and Maximum Facility Available of zero, each without terminating this
Agreement or the Credit Facility (provided in the event all Collateral Pool
Properties have been released from the Lien of any mortgage granted hereunder,
Guarantor agrees to pay the Unused Facility Fee pursuant to the provisions of
Section 2.4), and subsequently reborrow hereunder (if any Collateral Pool
-----------
Property remains subject to a mortgage
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in favor of Lender, or by adding Collateral pursuant to Section 2.9), provided
-----------
that, if the Collateral Pool Value remains at zero for more than one (1) year
following the release of the last Collateral Pool Property, Lender may terminate
this Agreement and the Credit Facility after thirty (30) days written notice
from Lender to such Borrower and to Guarantor, unless Borrower or Proposed
Borrower shall submit a real property for inclusion in the Collateral Pool in
accordance with the provisions of Section 2.9.2 in which event the termination
-------------
of this Agreement and the Credit Facility shall be stayed until the later to
occur of (a) Lender's rejection of the proposed real property pursuant to the
provisions in Section 2.9 or (b) the expiration of such thirty (30) day period.
-----------
Notwithstanding the foregoing, in the event such real property is added to the
Collateral Pool, pursuant to Section 2.9, the termination notice described above
-----------
shall be rendered null and void and of no further force and effect.
2.11. Substitution of Collateral.
--------------------------
If the Borrower simultaneously releases a Collateral Pool Property
under Section 2.10 and submits a real property for inclusion under Section 2.9
------------ -----------
which is accepted by Lender, then Borrower shall pay a fee (the "Substitution
Fee") equal to the sum of (i) an amount equal to fifteen basis points (.0015) of
the Substituted Collateral Facility and (ii) an amount equal to fifteen basis
points (.0015) of the Substituted Collateral Facility, provided however, that
the amount determined in (ii) above shall be no less than Twenty-Five Thousand
and NO/100 Dollars ($25,000.00) and no more than Seventy-Five Thousand and
NO/100 Dollars ($75,000.00). For purposes of this Section 2.11,
------------
"simultaneously" shall mean a release under Section 2.10 followed by an addition
------------
under Section 2.9, or vice-versa, within ninety (90) days of each other for
-----------
purposes of determining whether Borrower pays an Addition Fee or Substitution
Fee for the inclusion of a real property into the Collateral Pool.
Notwithstanding the foregoing, the Collateral Pool Value shall decrease by the
Market Value of the real property released from the Collateral Pool as of the
date of such release and shall increase by the Market Value of the real property
added to the Collateral Pool as of the date of such addition. Any Substitution
Fee payable hereunder shall be in lieu of and not in addition to the Addition
Fee under Section 2.9.3. In the event a real property is released from the
-------------
Collateral Pool pursuant to Section 2.10 and thereafter a real property is added
------------
to the Collateral Pool pursuant to Section 2.9, within ninety (90) days of each
-----------
other, the Substitution Fee shall be due and payable upon the addition of such
real property. In the event a real property is added to the Collateral Pool
pursuant to Section 2.9 and thereafter a real property is released from the
-----------
Collateral Pool pursuant to Section 2.10, within ninety (90) days of each other,
------------
Lender shall refund to Borrower the difference between the Addition Fee paid
pursuant to Section 2.9 and the Substitution Fee payable pursuant to this
-----------
Section 2.11.
------------
2.12. Release of Collateral Followed by a Permanent Loan.
--------------------------------------------------
2.12.1. Permanent Loan.
--------------
Borrower may request that Lender cause Servicer to make a
permanent loan (the "Permanent Loan") to be secured by certain Collateral Pool
--------------
Property(ies) designated by Borrower (the "Permanent Loan Collateral") to be
-------------------------
simultaneously released from the Collateral Pool and encumbered in favor of
Lender as security for Borrower's obligations under the
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Permanent Loan. The Permanent Loan shall be made in accordance with the terms
and conditions of the Streamlined Refinancing Program.
2.12.2. Procedure for Making a Permanent Loan
-------------------------------------
Borrower may request that Lender cause Servicer to make a Permanent
Loan to Borrower, which request shall specify (1) the Collateral Pool
Property(ies) that will constitute the Permanent Loan Collateral, (2) the
original principal amount of the requested Permanent Loan, (3) the related
reduction in the Collateral Pool Value and the Maximum Facility Available, (4)
whether Borrower has selected Lender's then current early rate lock delivery
option, and (5) any payment or prepayment of a Borrowing Tranche, (ii) an
Underwriting Fee for each Collateral Pool Property proposed by Borrower to be
subject to the Permanent Loan, and (iii) the Underwriting Materials. Following
receipt of such notice, the Underwriting Fee and the Underwriting Materials,
Lender shall use best efforts to consent to Borrower's request within thirty
(30) days of such notice, provided that (a) at the time of such request no Event
of Default or Potential Default exists, (b) the permanent loan amount shall be
in an amount not less than Five Million Dollars ($5,000,000.00), (c) the
Permanent Loan shall be made in accordance with the terms and conditions of the
Streamlined Refinancing Program, (d) after giving effect to such release no
Event of Default or Potential Default shall exist and Borrower will be in
compliance with all provisions hereof, including the Sublimits set forth in
Section 2.1.1, further provided that if any Permanent Loan shall cause Borrower
-------------
to be in non-compliance with the Sublimits, Borrower shall have the opportunity
to cure the same, prior to the consummation of the Permanent Loan (which shall
occur pursuant to the Streamlined Refinancing Program), by either adding a real
property pursuant to Section 2.9, or prepaying, in accordance with the
-----------
provisions of Section 4.3, so much of the Loan as is necessary to cause
-----------
compliance with the Sublimits, (e) Borrower shall provide evidence to Lender of
title insurance in form and substance acceptable to Lender and in the face
amount of the Permanent Loan, (f) Borrower under the Permanent Loan shall
execute and deliver such documents as Lender, in its discretion, may request in
order to evidence the making of the Permanent Loan and in order to grant Lender
a Prior Security Interest in the personal property and a first priority Lien on
the real property constituting the Permanent Loan Collateral, and (g) Borrower
shall pay Lender (1) a fee equal to fifteen basis points (.0015) of the amount
of the Permanent Loan, provided however, that the amount of such fee shall be no
less than Twenty-Five Thousand and NO/100 Dollars ($25,000.00) and no more than
Seventy-Five Thousand and NO/100 Dollars ($75,000.00), (2) a streamlined
refinancing fee to be determined in accordance with Lender's then current
guidelines and (3) an early rate lock fee, in the event Borrower selects the
early rate lock option, to be determined in accordance with Lender's then
current guidelines. Thereafter, Lender shall use best efforts to consummate the
Permanent Loan within thirty (30) days of the granting of Lender's consent
hereunder. Notwithstanding the foregoing, in the event that Borrower selects
Lender's then current early rate lock delivery option, Lender shall use best
efforts, subject to Borrower's timely compliance with Lender's requests, to lock
the interest rate for the requested Permanent Loan within seven (7) Business
Days of Borrower's notice hereunder. Any Permanent Loan granted pursuant to the
foregoing provisions shall not reduce the Commitment hereunder. Simultaneous
with the closing of the Permanent Loan, Lender shall release the Lien granted
hereunder on the Permanent Loan Collateral. Lender shall reasonably cooperate
with Borrower to structure and evidence each Permanent Loan so as to eliminate
or reduce any applicable recording taxes or title
-20-
insurance premiums (including, without limitation, amending any existing
recorded mortgage to secure a Permanent Loan in lieu of recording a new
mortgage), provided that for the purposes of this Section 2.12.2 the term
--------------
"reasonably cooperate" shall not obligate Lender to incur additional credit risk
or legal risk as a result of such action, all of which shall be determined in
Lender's discretion.
2.13. Borrower Appraisals
-------------------
With respect to any Collateral Pool Property, Borrower may at its
election and at its sole cost and expense, submit to Lender an Appraisal,
accompanied by (i) a certified operating statement, (ii) a rent roll, and (iii)
a certified operating statement of results for the previous three (3) calendar
years (or in the event such results are not available for the previous three (3)
years, the results for the previous two (2) years), provided that Borrower may
not submit more than one (1) Appraisal per Collateral Pool Property per year.
Lender, in its sole discretion, shall have thirty (30) days after receipt of any
new Appraisal and accompanying information to determine in its sole discretion
the Market Value of the Collateral Pool Property. The failure of Lender to
respond within such thirty (30) day period shall be deemed a rejection by Lender
of the value of the Collateral Pool Property as listed in the Appraisal. If
after receipt of an Appraisal, Lender determines that the Market Value of the
Collateral Pool Property which is the subject of the Appraisal has increased in
an amount above the then current Market Value of such Collateral Pool Property,
then the Market Value of such Collateral Pool Property and the Collateral Pool
Value shall be deemed to have increased by such amount and Lender shall
thereafter notify Borrower within five (5) Business Days after Lender's
determination of the increased Market Value of such Collateral Pool Property and
the amount of the Additional Collateral Facility, and Borrower shall within five
(5) days of such notice (1) pay a fee (the "Appraisal Addition Fee") to Lender
equal to thirty-five basis points (.0035) of the Additional Collateral Facility
resulting from such increase and (2) provide evidence to Lender of additional
title insurance acceptable to Lender in Lender's discretion in an amount not
less than the Additional Collateral Facility resulting from such increase.
Borrower shall pay all costs and expenses that Lender or Servicer incur in
connection with any Appraisal submitted by Borrower, including, but not limited,
to attorney's fees, whether or not Lender determines that the Market Value of
any Collateral Pool Property has increased in an amount above the then current
Market Value of such Collateral Pool Property.
2.14. Valuations.
----------
2.14.1. Timing and Procedure of Valuation
---------------------------------
In addition to any other provisions requiring valuations hereunder,
Lender shall perform an annual valuation (the "Valuation") of the Collateral
Pool Properties within forty-five (45) days after the end of each calendar year.
Lender shall provide Borrower with written notice of the results of the
Valuation within five (5) Business Days of Lender's final determination of such
results.
2.14.2. Valuations that Disclose a Decrease in Collateral Pool
------------------------------------------------------
Value.
-----
-21-
If any Valuation discloses that the Market Value of any Collateral
Pool Property has decreased below the then current Market Value of such
Collateral Pool Property, then the Market Value of such Collateral Pool Property
and the Collateral Pool Value shall be deemed to have decreased by such amount
and Lender shall thereafter notify Borrower of the decreased Market Value of
such Collateral Pool Property(ies) at the time Lender delivers the results of
the Valuation to Borrower. In the event that any such Valuation shall cause
Borrower to be in non-compliance with the Sublimits set forth in Section 2.1.1,
-------------
Borrower shall within fifteen (15) days of notice from Lender of such decrease,
cure the same by bringing the Loan into compliance with the Sublimits by either
(i) adding a real property pursuant to Section 2.9, (ii) prepaying, in
-----------
accordance with provisions of Section 4.3, so much of the Loan as is necessary
-----------
to cause compliance with the Sublimits, or (iii) delivering a standby,
irrevocable letter of credit in favor of Lender in an amount equal to the
required reduction of the Loan as would be necessary to bring Borrower within
compliance with the Sublimits, provided that such letter of credit shall (a) be
-------- ----
in form and substance acceptable to Lender and issued by an institution with a
credit rating of "A" or better, (b) be renewed by Borrower within thirty (30)
days of its expiration date, unless such letter of credit is no longer necessary
in order to cause compliance with the Sublimits, and (c) be maintained in an
amount equal to the required reduction of the Loan as would be necessary to
bring Borrower within compliance with the Sublimits.
2.14.3. Valuations that Disclose an Increase in Collateral Pool
---------------------------------------
Value.
-----
If any Valuation(s) pursuant to Section 2.14.2 previously resulted in
--------------
a decrease in Collateral Pool Property Value (in the aggregate, the "Valuation
Caused Decrease"), and thereafter a Valuation discloses that the Market Value of
any Collateral Pool Property has increased over the then current Market Value of
such Collateral Pool Property, then the Market Value of such Collateral Pool
Property shall be deemed to have increased (the "Valuation Caused Increase"),
without the payment of any Addition Fee, Appraisal Addition Fee or Substitution
Fee, to the extent of the lesser of (x) the amount of such increase in Market
Value, or (y) the Valuation Caused Decrease, and the Valuation Caused Decrease
shall simultaneously be deemed reduced (but not below zero) by an amount equal
to the Valuation Caused Increase.
2.15. Guaranty of Borrowing Tranche
-----------------------------
Guarantor may elect to (but shall not be obligated to) guaranty a
portion of the Loan by executing and delivering the Guaranty to Lender, but only
such portion of the Loan which constitutes Base Rate fundings, provided that (i)
at the time of such election Guarantor shall provide Lender with evidence
satisfactory to Lender, in the form of the last audited financial statements of
Guarantor, that Guarantor's current net worth is greater than or equal to Four
Hundred and Fifty Million and NO/100 Dollars ($450,000,000.00), and (ii)
Guarantor shall make the first such election prior to the fifth anniversary of
the Closing Date. The Guaranty shall thereafter remain in full force and effect
until the earlier to occur of (a) the Expiration Date or (b) the date, if any,
on which Borrower repays the Loan in full, and Lender, at the request of
Guarantor, shall issue a written confirmation that the Guaranty is null and void
and of no further force and effect upon the occurrence of either such event. In
the event that Borrower, subsequent to full repayment of the Loan, reborrows
money under the Credit Facility, Guarantor may also elect to (but shall not be
obligated to) guaranty a portion of the Loan (but only such portion of
-22-
the Loan which constitutes Base Rate fundings) by executing and delivering the
Guaranty to Lender.
2.16. Borrower's Right to Terminate the Credit Facility
-------------------------------------------------
Borrower shall have the right to terminate the Credit Facility
provided that (i) Borrower delivers to Lender thirty (30) days advance written
notice of its intent to terminate the Credit Facility, such notice shall be
irrevocable and shall specify the Expiration Date and (ii) Borrower repays the
Loan in full and performs all Obligations under this Agreement, the Revolving
Credit Note and the other Loan Documents, including, but not limited to,
Borrower's obligation to pay the Unused Facility Fees specified in Section 2.4
-----------
and the Minimum Servicing Fee specified in Section 3.2.2. In the event that
-------------
Borrower shall comply with the requirements set forth in (i) and (ii) above
Lender shall release the Liens granted hereunder on the Expiration Date in
accordance with Section 2.10.
------------
2.17. Material Adverse Change to Borrower or a Collateral Pool Property.
-----------------------------------------------------------------
If Borrower or a Collateral Pool Property experiences a Material
Adverse Change, Borrower shall promptly notify Lender of the same and Lender
shall upon notice of such Material Adverse Change promptly conduct a Valuation
of the affected Collateral Pool Property pursuant to Section 2.14. Until such
------------
time as such Valuation shall be completed the Collateral Pool Property which
experienced the Material Adverse Change, or which is owned by a Borrower that
experienced a Material Adverse Change, shall be deemed (but only for the
purposes of determining whether any new borrowing request satisfies all of the
Sublimits set forth in Section 2.1.1) to have a Market Value equal to a value to
-------------
be reasonably determined and quantified by Lender upon the information then
available to Lender. Lender shall promptly provide Borrower with written notice
of the results of such Valuation. If the results of such Valuation disclose
that the Market Value of the affected Collateral Pool Property has decreased,
then the Market Value shall thereafter be deemed to be the amount shown in such
Valuation. In the event that such Valuation hereunder shall cause Borrower to
be in non-compliance with the Sublimits set forth in Section 2.1.1, Borrower
-------------
shall cure the non-compliance as set forth in Section 2.14.2.
--------------
3. INTEREST RATES
--------------
3.1. Interest Rate.
-------------
The interest rate on each Borrowing Tranche shall be either the Prime
Rate or the Base Rate, as specified in the Loan Request. Interest rates under
this Credit Agreement and the Revolving Credit Note shall be computed on the
basis of a year of 360 days and actual days elapsed.
3.2. Interest Rate Determinations.
-----------------------------
3.2.1. Prime Rate and Base Rate Determination
--------------------------------------
-23-
The initial Prime Rate applicable to any Borrowing Tranche hereunder
shall equal the Prime Rate as of the Borrowing Date, the Prime Rate shall
thereafter fluctuate in accordance with any changes to the Prime Rate as
published from time to time during the term of the Prime Rate Borrowing Tranche.
The Base Rate applicable to any Borrowing Tranche hereunder shall, subject to
the provisions set forth in the following sentence, equal the Base Rate set
forth in the Loan Request. In the event that the LIBO Rate published on the
Borrowing Date is more than twenty-five basis points (.0025) higher or lower
than the LIBO Rate set forth in the Loan Request, the Base Rate shall be equal
to the LIBO Rate plus the Margin, as each exists on the Borrowing Date.
Thereafter, the Base Rate shall be redetermined as of each (i) renewal of a
Borrowing Tranche pursuant to Section 3.3.3 and (ii) date on which Guarantor
-------------
elects to guarantee the Loan pursuant to Section 2.15. In all events, the Base
------------
Rate shall be equal to the applicable LIBO Rate plus the applicable Margin. The
Margin shall be determined based on the Facility Debt Service Coverage Ratio in
accordance with the table set forth in Schedule 3.2, provided however, that in
------------
the event the Guaranty is then in full force and effect the Margin shall be
determined in accordance with the table set forth in Schedule 3.2A.
-------------
Notwithstanding the foregoing, in the event (1) Guarantor's net worth falls
below Four Hundred and Fifty Million and NO/100 Dollars ($450,000,000.00) or (2)
of a Material Adverse Change affecting the Guarantor, the Margin shall be
determined in accordance with the table set forth in Schedule 3.2 until such
------------
time as (x) Guarantor provides Lender with evidence satisfactory to Lender, in
the form of the last audited financial statements of Guarantor, that Guarantor's
net worth is greater than or equal to Four Hundred and Fifty Million and NO/100
Dollars ($450,000,000.00) in the event that Guarantor's net worth fell below
Four Hundred and Fifty Million and NO/100 Dollars ($450,000,000.00), or (y)
Guarantor provides Lender with evidence satisfactory to Lender that the Material
Adverse Change has been cured, in the event that Guarantor was affected by a
Material Adverse Change. The Facility Debt Service Coverage Ratio and the
Margin shall be determined and redetermined as of each (1) Loan Request, (2)
anniversary of the Closing Date, (3) addition, deletion or substitution of a
real property to or from the Collateral Pool pursuant to Sections 2.9, 2.10 and
----------------------
2.12 respectively, and (4) expiration of an Interest Period for any Base Rate
----
Borrowing Tranche.
3.2.2. Minimum Servicing Fee.
---------------------
As additional compensation, for Lender's agreement to service the Loan
pursuant to this Credit Agreement, Borrower shall pay Lender an annual fee (the
"Minimum Servicing Fee") equal to Twenty Thousand and NO/100 Dollars
($20,000.00), such fee shall be due and payable quarterly in arrears beginning
on the Payment Date that is on or closest to July 1, 2000 and continuing on the
first Payment Date of each successive calendar quarter. Minimum Servicing Fee
payments which cover a period of less than one (1) calendar quarter shall be
prorated on the actual number of days elapsed. Any accrued Minimum Servicing
Fee shall also be payable on the Expiration Date. Notwithstanding the
characterization assigned to the payments under this Section 3.2.2, such payment
-------------
obligation shall be deemed interest payable under the Agreement for the purpose
of calculating the Facility Debt Service Coverage Ratio.
3.2.3. Rate and Margin Quotations.
--------------------------
-24-
Borrower may call Lender on or before the date on which a Loan Request
is to be delivered or prior to the end of an Interest Period, to receive both a
calculation of the resulting Facility Debt Service Coverage Ratio for a proposed
Borrowing Tranche and an indication of the rates then in effect, including the
Margin, but it is acknowledged that such projection shall not be binding on
Lender or Borrower, nor shall such projection affect the rate of interest which
thereafter is actually in effect when the election is made.
3.3. Interest Periods.
----------------
Upon each Loan Request for a new Base Rate funding, and upon each
Renewal Request applicable to a Base Rate Borrowing Tranche, Borrower shall
notify Lender of the period (the "Interest Period") (which may only be a thirty
(30) day, sixty (60) day, ninety (90) day, one-hundred and twenty (120) day,
one-hundred and eighty (180) day, two hundred and seventy (270) day or three
hundred and sixty (360) day period (if available to Lender)) for which the LIBO
Rate shall be determined. If the maturity date of any Interest Period is not a
Business Day, the Interest Period shall be deemed to mature on the Business Day
immediately following such maturity date.
3.3.1. Ending Date and Business Day.
----------------------------
Any Interest Period which would otherwise end on a date which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in the next calendar Month, in which case such Interest
Period shall end on the immediately preceding Business Day.
3.3.2. Termination Before Expiration Date.
----------------------------------
Borrower shall not select or renew an Interest Period for any
Borrowing Tranche that would end after the Expiration Date. If at the time of
any such selection or renewal the period of time remaining prior to the
Expiration Date is less than thirty (30) days then such Borrowing Tranche shall
bear interest at the Prime Rate.
3.3.3. Renewals.
--------
In the case of a redetermination of an Interest Period at the end of
an Interest Period, the first day of the new Interest Period shall be the last
day of the preceding Interest Period, without duplication in payment of interest
for such day. For each Borrowing Tranche bearing interest at the Base Rate, if
no new Interest Period is specified by 10:00 a.m. on the expiration date of such
Interest Period by delivery to Lender via facsimile of a fully completed,
authorized and executed request therefor (a "Renewal Request") in the form
attached hereto as Schedule 3.3.3, the Borrowing Tranche shall be deemed to be
--------------
renewed at the then applicable Base Rate for a thirty (30) day Interest Period.
Borrower may convert a Prime Rate Borrowing Tranche to a Base Rate Borrowing
Tranche by delivering to Lender via facsimile a fully completed, authorized and
executed Renewal Request in the form attached hereto as Schedule 3.3.3. If the
--------------
Guaranty is then in effect, each Base Rate Borrowing Tranche shall remain
guaranteed throughout any renewed Interest Period or deemed renewal period.
-25-
3.3.4. Interest After Default.
----------------------
So long as (i) any payment under this Agreement remains past due for
thirty (30) days or more, or (ii) any other Event of Default has occurred or is
continuing, interest on all Borrowing Tranches shall accrue on the unpaid
principal balance from the date of the Event of Default at a rate equal to the
lesser of four percentage points (4.0%) above the then current rate of interest
or the maximum interest rate which may be collected from Borrower under
applicable Law (provided, such default interest shall not be included in the
calculation of the Facility Debt Service Coverage Ratio). If the unpaid
principal balance and all accrued interest are not paid in full on the
Expiration Date, the unpaid principal balance and all accrued interest shall
bear interest from the Expiration Date at the rate set forth in this Section
-------
3.3.4. Borrower acknowledges that its failure to make timely payments will
-----
cause Lender to incur additional expenses in servicing and processing the Loan,
that, during the time that any installment is delinquent for more than thirty
(30) days, Lender will incur additional costs and expenses arising from its loss
of the use of the money due and from the adverse impact on Lender's ability to
meet its other obligations and to take advantage of other investment
opportunities, and that it is extremely difficult and impractical to determine
those additional costs and expenses. Borrower also acknowledges that, during
the time that any installment is delinquent for more than thirty (30) days or
any other Event of Default has occurred and is continuing, Lender's risk of
nonpayment will be materially increased and Lender is entitled to be compensated
for such increased risk. Borrower agrees that the increase in the rate of
interest set forth above represents a fair and reasonable estimate, taking into
account all circumstances existing on the date of this Agreement, of the
additional costs and expenses Lender will incur by reason of Borrower's
delinquent payment and the additional compensation Lender is entitled to receive
for the increased risks of nonpayment associated with a delinquent loan.
3.3.5. Late Charge.
-----------
If any amount payable under this Agreement, the Revolving Credit
Note or any other Loan Document, other than the then outstanding amount of the
Loan payable on the Expiration Date or upon acceleration of the Revolving Credit
Note, is not received by Lender on the due date, Borrower shall pay to Lender,
immediately and without demand by Lender, a late charge equal to four percent
(4%) of such amount. Borrower acknowledges that its failure to make timely
payments will cause Lender to incur additional expenses in servicing and
processing the Loan, and that it is extremely difficult and impractical to
determine those additional expenses. Borrower agrees that the late charge
payable pursuant to this Section 3.3.5 represents a fair and reasonable
-------------
estimate, taking into account all circumstances existing on the date of this
Agreement, of the additional expenses Lender will incur by reason of such late
payment. The late charge is payable in addition to, and not in lieu of, any
interest payable at the Default Rate pursuant to Section 3.3.4.
-------------
3.4. LIBO Rate Unascertainable: Illegality; Increased Costs;
-------------------------------------------------------
Deposits Not Available.
----------------------
3.4.1. Unascertainable.
---------------
-26-
If on any date on which a LIBO Rate would otherwise be determined,
Lender shall have reasonably determined that:
3.4.1.1. adequate and reasonable means do not exist for
ascertaining such LIBO Rate or alternative rate permitted or designated
hereunder, or
3.4.1.2. a contingency has occurred which materially and
adversely affects the London interbank market,
then Lender shall have the rights specified in Section 3.4.3.
-------------
3.4.2. Illegality; Increased Costs; Deposits Not Available.
---------------------------------------------------
If at any time Lender shall have reasonably determined that:
3.4.2.1. the making, maintenance or funding of any Borrowing
Tranche bearing interest at the Base Rate has been made unlawful by compliance
by Lender in good faith with any Law or any interpretation or application
thereof by any Official Body or with any request or directive of any such
Official Body (whether or not having the force of Law but other than as a result
of any misconduct by Lender), or
3.4.2.2. the Base Rate will not adequately and fairly
reflect the cost to Lender of the establishment or maintaining of any such
Borrowing Tranche, or
3.4.2.3. after making all reasonable efforts, deposits of
the relevant amount in Dollars for the relevant Interest Period for a Borrowing
Tranche are not available to Lender with respect to such Borrowing Tranche, in
the London interbank market,
then Lender shall have the rights specified in Section 3.4.3.
-------------
3.4.3. Lender's Rights.
---------------
In the case of any event specified in Section 3.4.1 or Section 3.4.2
------------- -------------
above, Lender shall promptly notify Borrower thereof. Upon the date as shall be
specified in such notice, the obligation of Lender to make advances under any
Borrowing Tranche(s) at the Base Rate shall be suspended until Lender shall have
later notified Borrower of Lender's reasonable determination that the
circumstances giving rise to such previous determination no longer exist. If at
any time Lender notifies Borrower that it has made a determination under Section
-------
3.4.1 or Section 3.4.2 then with respect to any Loan Request previously
----- -------------
submitted but not yet funded and with respect to each Borrowing Tranche on which
an Interest Period shall thereafter expire, the applicable Borrowing Tranche(s)
shall be deemed to bear interest at the Prime Rate.
4. PAYMENTS
--------
4.1. Payments.
-27-
All payments and prepayments to be made in respect of principal,
interest, Unused Facility Fees or other fees or amounts due from Borrower
hereunder shall be due and payable on the date when due without presentment,
demand, protest, or notice of any kind, including, but not limited to, notice of
Lender's intent to accelerate Borrower's Obligations under the Loan and notice
of such acceleration , all of which (unless expressly provided in the Loan
Documents) are hereby waived by Borrower, and without set-off, counterclaim or
other deduction of any nature, and an action therefor shall immediately accrue.
Such payments shall be made to Lender in immediately available funds when due.
Lender's statement of account, ledger or other relevant record shall, in the
absence of manifest error, be conclusive as the statement of the amount of
principal of and interest on the Loan and other amounts owing under this
Agreement, provided, however, that Borrower may challenge the accuracy of any
such statement, ledger or other record within one (1) year of the date of such
statement, ledger or other record.
4.2. Interest Payment Dates.
Interest on the Loan shall be due and payable in arrears prior to
12:00 noon Eastern Time on (i) the date that is two (2) Business Days after
Borrower's receipt from Lender of an invoice detailing the interest (and
principal, if applicable hereunder) due and payable, together with the Unused
Facility Fee due and payable for the current Month (the "Payment Date") and (ii)
on the Expiration Date or upon acceleration of the Revolving Credit Note. In
the instance of a renewal of an Interest Period pursuant to Section 3.3.3,
-------------
interest on such renewed Borrowing Tranche shall be due and payable on the next
Payment Date, subject to any adjustments in interest rates, as if the Interest
Period had not expired and then been renewed. Interest on prepayments under
Section 4.3 shall be due on the date such prepayment is due. Interest on the
-----------
principal amount of the Loan or other monetary Obligation shall be due and
payable on demand after such principal amount or other monetary Obligation
becomes due and payable (whether on the stated maturity date, upon acceleration
or otherwise). Any payments received from Borrower between the date the notice
is delivered and the Payment Date shall be credited on the invoice issued for
the following Month and shall not affect Borrower's obligations to pay the
invoice in full on the Payment Date.
4.3. Prepayments.
-----------
4.3.1. Voluntary Prepayments.
---------------------
Borrower shall have the right, at its option, from time to time to
prepay the Loan in whole or part at any time, but no prepayment may be less than
the outstanding principal balance and accrued interest of the applicable
Borrowing Tranche(s) being prepaid. Whenever Borrower desires to prepay any
part of the Loan, Borrower shall provide a prepayment notice to Lender at least
one (1) day prior to the date of the proposed prepayment setting forth the
following information:
(x) the estimated date on which the proposed prepayment is to be made;
and
(y) a statement indicating the application of the prepayment to a
particular Borrowing Tranche or Borrowing Tranches.
-28-
All prepayment notices shall be revocable upon one (1) day's notice.
The principal amount of the Borrowing Tranche(s) for which a prepayment notice
is given, together with interest on such principal amount, shall be due and
payable by 12:00 Noon Eastern Time on the date specified in such prepayment
notice as the date on which the proposed prepayment is to be made as the same
may be extended by Borrower. Notwithstanding anything to the contrary contained
herein, prepayment of any Borrowing Tranche bearing interest at the Prime Rate
may be made upon two (2) days prior notice, and need not be made on a Payment
Date.
4.3.2. Mandatory Prepayment / Collateral Substitution.
----------------------------------------------
4.3.2.1. If at the time of the release of a portion of the
Collateral pursuant to Section 2.10, Borrower shall be in violation of any of
------------
the provisions of this Agreement, including the Sublimits set forth in Section
-------
2.1.1, Borrower shall cure such violation by prepaying that portion of the Loan
-----
outstanding as is necessary to cause compliance with such Sublimit prior to or
simultaneously with such release, without any Prepayment Fee or similar fee or
penalty.
4.3.2.2. If at the time of (i) a Valuation pursuant to
Section 2.14 or (ii) a redetermination of Net Operating Income by Lender,
------------
Borrower shall be in violation of any of the provisions of this Agreement,
including the Sublimits set forth in Section 2.1.1, Borrower shall cure such
-------------
violation by either (a) making a proposal to add a real property to the
Collateral Pool pursuant to Section 2.9 within thirty (30) days of Borrower's
-----------
receipt of notice of such Valuation or such redetermination of Net Operating
Income or (b) prepaying that portion of the Loan outstanding as is necessary to
cause compliance with such Sublimit within fifteen (15) days of Borrower's
receipt of notice of such Valuation or redetermination of Net Operating Income,
without any Prepayment Fee or similar fee or penalty.
4.4. Prepayment Fee.
--------------
Unless Borrower (i) repays a Borrowing Tranche accruing interest at
the Prime Rate, (ii) has elected to prepay in advance all of the interest,
applicable to the particular Borrowing Tranche being prepaid, which would have
otherwise accrued over the applicable Interest Period, or (iii) repays all or a
part of a Borrowing Tranche upon the expiration of such Borrowing Tranche's
Interest Period, any prepayment under Section 4.3 shall be accompanied by a
-----------
prepayment fee (the "Prepayment Fee") which shall be determined in accordance
--------------
with Schedule 4.4. The Prepayment Fee shall not constitute the payment of
------------
interest and therefore shall not be included in the calculation of Facility Debt
Service Coverage Ratio or the determination of Borrower's compliance with the
Sublimits set forth in Section 2.1.1. In addition, upon Lender's exercise of
-------------
any right of acceleration under this Agreement, the Revolving Credit Note, or
any other Loan Document following an Event of Default, Borrower shall pay to
Lender the Prepayment Fee on the entire unpaid principal amount of the Loan
outstanding (except for any portion of the Loan which is then bearing interest
at the Prime Rate) at the time of acceleration in addition to all interest
accrued thereon, and all other sums and fees payable to Lender hereunder.
4.5. Additional Payment Obligations.
------------------------------
-29-
Notwithstanding anything to the contrary set forth herein, if Lender
shall determine in accordance with the provisions of Section 3.2.1 that the
-------------
Facility Debt Service Coverage Ratio is less than or equal to 1.80 : 1.00 and
such Facility Debt Service Coverage Ratio remains less than or equal to 1.80 :
1.00 for a period of one hundred and eighty (180) consecutive days, Borrower
shall, upon Lender's election, commence to pay, beginning with the next
succeeding Payment Date, monthly installments of principal on the then
outstanding principal amount of the Loan in amounts sufficient to amortize the
Loan over a thirty (30) year period (such monthly installment amount to be
calculated and payable in accordance with the provisions of the following
sentence) without any Prepayment Fee. The amount of any monthly principal
amortization installment required pursuant to the terms of this Section 4.5
-----------
shall equal the figure obtained by dividing the then outstanding principal
amount of the Loan by three hundred and sixty (360) months and such monthly
principal amortization installment shall be proportionately applied among the
then outstanding Borrowing Tranches. Borrower's obligations under this Section
-------
4.5 shall continue until the later of the following two (2) dates: (i) the
---
anniversary date of Borrower's obligation to commence amortizing loan payments
pursuant to this Section 4.5 or (ii) the date that the Facility Debt Service
-----------
Coverage Ratio exceeds 1.80 : 1.00, as timely and reasonably determined by
Lender in accordance with the provisions of this Agreement.
4.6. Additional Compensation in Certain Circumstances.
------------------------------------------------
4.6.1. Increased Costs Resulting from Taxes, Etc.
-----------------------------------------
If any change in any Law, guideline or interpretation or application
thereof by any Official Body charged with the interpretation or administration
thereof or compliance with any written request or directive of any Official Body
(other than as a result of any misconduct by Lender) which is applicable to
Lender:
4.6.1.1. subjects Lender to any tax or changes the basis of
taxation with respect to this Agreement, the Revolving Credit Note, the Loan or
payments by Borrower of any principal, interest, fees, or other amounts due from
Borrower hereunder or under the Revolving Credit Note (except for taxes on the
overall net income of Lender);
4.6.1.2. imposes upon Lender any condition or denies Lender
any right, the result of which is to increase the cost to, reduce the income
receivable by, or impose any expense (including breakage costs) upon Lender with
respect to this Agreement, the Revolving Credit Note or the making, maintenance
or funding of any Borrowing Tranche by an amount which Lender in its discretion
deems to be material.
then Lender shall from time to time notify Borrower of the amount
determined in good faith (using any averaging and attribution methods employed
in good faith) by Lender to be necessary to compensate Lender for such increase
in cost. Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by Borrower to Lender
thirty (30) days after such notice is given.
4.6.2. Indemnity.
---------
-30-
In addition to the compensation required by Section 4.6.1, Borrower
-------------
shall jointly and severally indemnify Lender against all liabilities, losses or
expenses (including breakage costs, any loss or expense incurred in liquidating
or employing deposits from third parties ) which Lender sustains or incurs as a
consequence of any:
4.6.2.1. attempt by Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any Loan Request under
Section 2.5, any request to release a Collateral Pool Property under Section
----------- -------
2.10, or notice relating to prepayments under Section 4.3, or
---- -----------
4.6.2.2. default by Borrower in the performance or observance of
any covenant or condition contained in this Agreement or any other Loan
Document, including any failure of Borrower to pay when due (by acceleration or
otherwise) any principal, interest, Unused Facility Fee or any other amount due
hereunder.
If Lender sustains or incurs any such loss or expense, it shall from
time to time notify Borrower of the amount determined in good faith by Lender
(which determination may include such assumptions, allocations of costs and
expenses and averaging or attribution methods as Lender shall deem reasonable)
to be necessary to indemnify Lender for such loss or expense. Such notice shall
set forth in reasonable detail the basis for such determination (which shall be
conclusive absent manifest error). Such amount shall be due and payable by
Borrower to Lender thirty (30) days after such notice is given.
5. REPRESENTATIONS AND WARRANTIES
------------------------------
5.1. Representations and Warranties.
Borrower represents and warrants to Lender as follows:
5.1.1. Organization and Qualification.
------------------------------
Borrower is a corporation, partnership, limited liability company, or
real estate investment trust, duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization or formation, as the
case may be, Borrower has the lawful power to own or lease its Real Estate
Properties and to engage in the business it presently conducts or proposes to
conduct. Borrower is duly licensed or qualified and in good standing in all
jurisdictions where the property owned or leased by it or the nature of the
business transacted by it or both makes such licensing or qualification
necessary and where the failure to be so qualified would result in a Material
Adverse Change.
5.1.2. Single Asset Borrower.
---------------------
Borrower represents and warrants that it is a single asset entity,
with a purpose limited to owning, maintaining and operating only the Real Estate
Property.
-31-
5.1.3. Power and Authority.
-------------------
Borrower has full power to enter into, execute, deliver and carry out
this Agreement and the other Loan Documents to which it is a party, to incur the
Loan contemplated by the Loan Documents and to perform its Obligations under the
Loan Documents to which it is a party, and all such actions have been duly
authorized by all necessary proceedings on its part.
5.1.4. Validity and Binding Effect.
---------------------------
This Agreement has been duly and validly executed and delivered by
Borrower and each other Loan Document which Borrower is required to execute and
deliver on or after the date hereof will have been duly executed and delivered
by Borrower on the required date of delivery of such Loan Document. This
Agreement and each other Loan Document constitutes, or will constitute, legal,
valid and binding obligations of Borrower on and after its date of delivery
thereof, enforceable against Borrower in accordance with its terms, except to
the extent that enforceability of any of such Loan Documents may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting the
right of specific performance. There is no offset, defense, counterclaim or
right of recision with respect to any of the Loan Documents.
5.1.5. No Conflict.
-----------
Neither the execution and delivery of this Agreement or the other Loan
Documents by Borrower nor the consummation of the transactions herein or therein
contemplated or compliance with the terms and provisions hereof or thereof by
any of them will conflict with, constitute a default under or result in any
breach or violation of (i) the terms and conditions, as applicable, of the
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents of Borrower or (ii) any Law or any
material agreement or instrument or order, writ, judgment, injunction or decree
to which Borrower is a party or by which Borrower is bound or to which Borrower
is subject, or (iii) result in the creation or enforcement of any Lien, charge
or encumbrance whatsoever upon any property (now or hereafter acquired) of
Borrower (other than Liens granted under the Loan Documents), nor will they
result in or require (except as specifically contemplated by this Agreement) the
creation or imposition of any lien of any nature upon any of the collateral of
Borrower.
5.1.6. Litigation.
----------
There are no actions, suits, proceedings or investigations pending or
to the knowledge of Borrower threatened, against Borrower or its Affiliates at
law or equity before any Official Body which individually or in the aggregate
may result in any Material Adverse Change. Neither Borrower nor its Affiliates
are in violation of any order, writ, injunction or any decree of any Official
Body which may result in any Material Adverse Change.
-32-
5.1.7. Title to Collateral Pool Properties.
-----------------------------------
Borrower has good and marketable title to all Collateral Pool
Properties and all other Assets which it purports to own or which are reflected
as owned on its books and records, free and clear of all Liens and encumbrances
except the Permitted Exceptions. The Permitted Exceptions do not and will not
materially and adversely affect (i) the ability of Borrower to pay in full all
sums due under the Revolving Credit Note or any of its other obligations in a
timely manner or (ii) the use of any Collateral Pool Property for the use
currently being made thereof, the operation of any Collateral Pool Property as
currently being operated or the value of any Collateral Pool Property.
5.1.8. Use of Proceeds.
---------------
Borrower intends to use the proceeds of the Loan in accordance with
Section 2.8.
-----------
5.1.9. Full Disclosure.
---------------
Neither this Agreement nor any other Loan Document, nor any material
certificate, statement, agreement or other documents furnished to Lender in
connection herewith or therewith, contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein and therein, in light of the circumstances under which they
were made, not misleading. There is no fact known to Borrower which materially
adversely affects the business, property, assets, financial condition, results
of operations or prospects of Borrower, or any of its Affiliates which has not
been set forth in this Agreement or in the certificates, statements, agreements,
Financial Projections or other documents furnished in writing to Lender prior to
or at the date hereof in connection with the transactions contemplated hereby.
5.1.10. Taxes.
-----
All federal, state, local and other tax returns required to have been
filed with respect to Borrower and its Affiliates have been filed, and payment
or adequate provision has been made for the payment of all taxes, fees,
assessments and other governmental charges which have or may become due pursuant
to said returns or to assessments received, except to the extent that such
taxes, fees, assessments and other charges are being contested in good faith by
appropriate proceedings diligently conducted and for which such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall have
been made. There are no agreements or waivers extending the statutory period of
limitations applicable to any federal income tax return of Borrower, or its
Affiliates for any period.
5.1.11. Consents and Approvals.
----------------------
Except for the filing of financing statements and the relevant
Collateral Pool Property Documents in the state and county filing offices and
except as listed on Schedule 5.1.11, there are no other consents and approvals
---------------
necessary for the execution of this Agreement by Borrower or its performance
hereunder or under the Loan Documents, all of which shall have been obtained or
made on or prior to the Closing Date.
-33-
5.1.12. No Event of Default; Compliance with Instruments.
------------------------------------------------
No event has occurred and is continuing and no condition exists or
will exist after giving effect to the borrowings or other extensions of credit
to be made on the Closing Date or thereafter under or pursuant to the Loan
Documents, which constitutes an Event of Default or a Potential Default.
Neither Borrower, nor any of its Affiliates are in violation of (i) any term of
its certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents or (ii) any material agreement or
instrument to which it is a party or by which it or any of its Real Estate
Properties may be subject or bound where such violation would constitute a
Material Adverse Change.
5.1.13. Security Interests.
------------------
The Liens and security interests granted to and for the benefit of
Lender pursuant to the Loan Documents constitute and will continue to constitute
Prior Security Interests under the Uniform Commercial Code as in effect in each
applicable jurisdiction (the "Uniform Commercial Code") or other applicable Law,
-----------------------
entitled to all the rights, benefits and priorities provided by the Uniform
Commercial Code or such Law. Upon the filing of financing statements relating
to said security interests in each office all such action as is necessary or
advisable to establish such rights of Lender will have been taken, and there
will be, upon execution and delivery of the Loan Documents, such filings and
such taking of possession, no necessity for any further action in order to
preserve, protect and continue such rights, except the filing of continuation
statements with respect to such financing statements within six Months prior to
the expiration of such filing of such financing statements. All filing fees and
other expenses in connection with each such action have been or will be paid by
Borrower. All continuations and any assignments of any such financing
statements have been or will be timely filed or refiled, as appropriate, in the
appropriate recording offices.
5.1.14. Mortgage Liens.
--------------
The Liens granted to and for the benefit of Lender pursuant to the
Collateral Pool Property Documents constitute a valid first priority Lien under
applicable law, subject to any Permitted Exceptions. All such action as will be
necessary or advisable to establish such Lien of Lender and its priority as
described in the preceding sentence will be taken at or prior to the time
required for such purpose, and there will be as of the date of execution and
delivery of the Collateral Pool Property Documents no necessity for any further
action in order to protect, preserve and continue such Lien and such priority
(except for the timely filing in the required offices of Uniform Commercial Code
financing statement continuations). All filing fees and other expenses in
connection with each such action have been or will be paid by Borrower.
5.1.15. Insurance.
---------
All insurance policies and other bonds to which Borrower and its
respective Affiliates is a party are valid and in full force and effect. No
notice has been given or claim made and no grounds exist to cancel or avoid any
of such policies or bonds or to reduce the
-34-
coverage provided thereby. Such policies and bonds provide adequate coverage
from reputable and financially sound insurers in amounts sufficient to insure
the assets and risks of Borrower in accordance with prudent business practice in
the industry of Borrower.
5.1.16. Material Contracts; Burdensome Restrictions.
-------------------------------------------
All material contracts relating to Borrower and its Affiliates taken
as a whole, are valid, binding and enforceable upon Borrower and, to Borrower's
knowledge, each of the other parties thereto in accordance with their respective
terms (except as disclosed in writing by Borrower to Lender prior to the date
hereof), and there is no default thereunder, to the knowledge of Borrower with
respect to parties other than Borrower or its Affiliates except where the
failure of any such contract to be in compliance with the foregoing would not
result in a Material Adverse Change. Neither Borrower nor its Affiliates is
bound by any contractual obligation, or subject to any restriction in any
organization document, or any requirement of Law which is reasonably expected to
result in a Material Adverse Change.
5.1.17. Investment Companies; Regulated Entities.
----------------------------------------
Borrower is not an "investment company" registered or required to be
registered under the Investment Company Act of 1940 or under the "control" of an
"investment company" as such terms are defined in the Investment Company Act of
1940 and shall not become such an "investment company" or under such "control."
Borrower is not subject to any other Federal or state statute or regulation
limiting its ability to incur any debt.
5.1.18. Pension Plans and Benefit Arrangements.
--------------------------------------
5.1.18.1. Borrower has no employees, other than as set forth
in Schedule 5.1.18, and Borrower does not maintain or participate in any Benefit
---------------
Arrangement.
5.1.18.2. Borrower and each other member of the ERISA Group
are in compliance in all material respects with any applicable provisions of
ERISA with respect to all Benefit Arrangements, Pension Plans and Multiemployer
Plans. There has been no Prohibited Transaction with respect to any Benefit
Arrangement or any Pension Plan or, with respect to any Multiemployer Plan,
which could result in any material liability of Borrower or any other member of
the ERISA Group. Borrower and all members of the ERISA Group have made when due
any and all payments required to be made under any agreement relating to a
Multiemployer Plan or any Law pertaining thereto. With respect to each Pension
Plan and Multiemployer Plan, Borrower and each member of the ERISA Group (i)
have fulfilled in all material respects their obligations under the minimum
funding standards of ERISA, (ii) have not incurred any liability to the PBGC,
and (iii) have not had asserted against them any penalty for failure to fulfill
the minimum funding requirements of ERISA.
5.1.18.3. Each Multiemployer Plan is able to pay benefits
thereunder when due.
5.1.18.4. Borrower nor any other member of the ERISA Group
has instituted or intends to institute proceedings to terminate any Pension
Plan.
-35-
5.1.18.5. No event requiring notice to the PBGC under Section
302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur with
respect to any Pension Plan, and no amendment with respect to which security is
required under Section 307 of ERISA has been made or is reasonably expected to
be made to any Pension Plan.
5.1.18.6. The aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Pension Plan, determined on a
plan termination basis, as disclosed in, and as of the date of, the most recent
actuarial report for such Pension Plan, does not exceed the aggregate fair
market value of the assets of such Pension Plan.
5.1.18.7. Borrower nor any other member of the ERISA Group has
incurred or reasonably expects to incur any material withdrawal liability under
ERISA to any Multiemployer Plan. Borrower nor any other member of the ERISA
Group has been notified by any Multiemployer Plan that such Multiemployer Plan
has been terminated within the meaning of Title IV of ERISA, and no
Multiemployer Plan is reasonably expected to be reorganized or terminated,
within the meaning of Title IV of ERISA.
5.1.18.8. To the extent that any Benefit Arrangement is insured,
Borrower and all members of the ERISA Group have paid when due all premiums
required to be paid for all periods through and including the Closing Date. To
the extent that any Benefit Arrangement is funded other than with insurance,
Borrower and all other members of the ERISA Group have made when due all
contributions required to be paid for all periods through the Closing Date.
5.1.18.9. All Pension Plans, Benefit Arrangements and
Multiemployer Plans have been administered in accordance with their terms and
applicable Law.
5.1.19. Other Indebtedness.
------------------
Borrower has not incurred any other debt other than (i) trade debt
incurred in the ordinary course of business and (ii) subordinate intercompany
debt.
5.1.20. Solvency.
--------
Borrower is Solvent. After giving effect to the transactions
contemplated by the Loan Documents, including the Loan incurred thereunder and
the Liens granted to and for the benefit of Lender, Borrower will be Solvent.
Borrower has not entered into this Credit Agreement or any Loan Document with
the actual intent to hinder, delay, or defraud any creditor, and Borrower has
received reasonably equivalent value in exchange for its obligations under the
Loan Documents. Borrower does not intend to, and Borrower does not believe that
it will, incur debts and liabilities beyond its ability to pay such debts as
they mature (taking into account the timing and amounts to be payable on or in
respect of obligations of Borrower).
5.1.21. Agreements.
----------
Borrower is not a party to any agreement or instrument or subject to
any restriction which is likely to result in a Material Adverse Change. Borrower
is not in default in
-36-
any respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any indenture, agreement or
instrument to which it is a party or by which Borrower or any Collateral Pool
Property is bound.
5.1.22. No Bankruptcy Filing.
--------------------
Borrower is not contemplating either the filing of a petition by it
under any state or federal bankruptcy or insolvency laws or the liquidation of
all or a major portion of its assets or property of Borrower and Borrower has no
knowledge of any Person contemplating the filing of any such petition against
Borrower.
5.1.23. Location of Chief Executive Offices.
-----------------------------------
The location of the principal place of business and chief executive
office of Borrower is Arlington, Virginia.
5.1.24. Compliance.
----------
Borrower, each Collateral Pool Property and the use thereof and
operations thereat by Borrower, comply in all material respects with all
applicable Laws. Borrower is not in default or violation of any order, writ,
injunction, decree or demand of any Official Body, the violation of which is
reasonably likely to result in a Material Adverse Change. All required permits,
licenses, and certificates for the lawful use and operation of the Collateral
Pool Properties, including, but not limited to, certificates of occupancy,
apartment licenses, or the equivalent have been obtained and are in full force
and effect.
5.1.25. Not a Foreign Person.
--------------------
Borrower is not a "foreign person" within the meaning of Section
1445(f)(3) of the Internal Revenue Code.
5.1.26. Labor Matters.
-------------
Borrower is not a party to any collective bargaining agreements.
5.1.27. Condemnation.
------------
No taking, condemnation or eminent domain proceeding has been
commenced or, to the knowledge of Borrower, is contemplated with respect to all
or any portion of any Collateral Pool Property or for the relocation of roadways
providing access to any Collateral Pool Property.
5.1.28. Utilities and Public Access.
---------------------------
Each Collateral Pool Property has adequate rights of access to public
ways and is served by adequate water, sewer, sanitary sewer and storm drain
facilities as are adequate for full utilization of such Collateral Pool Property
for its use as a multifamily residential property. All
-37-
public utilities necessary to the continued use and enjoyment of each Collateral
Pool Property as presently used and enjoyed are located in the public right-of-
way abutting the premises, and all such utilities are connected so as to serve
each Collateral Pool Property either (i) without passing over other property or,
(ii) if such utilities pass over other property, pursuant to valid easements.
All roads necessary for the full utilization of each Collateral Pool Property
for its current purpose have been completed and dedicated to public use and
accepted by all Official Bodies or are the subject of access easements for the
benefit of such Collateral Pool Property.
5.1.29. No Joint Assessment; Separate Lots.
----------------------------------
Borrower has not and shall not suffer, permit or initiate the joint
assessment of any Collateral Pool Property (i) with any other Real Estate
Property constituting a separate tax lot, and (ii) with any portion of such
Collateral Pool Property which may be deemed to constitute personal property, or
any other procedure whereby the lien of any taxes which may be levied against
such personal property shall be assessed or levied or charged to such Collateral
Pool Property as a single lien. Each Collateral Pool Property is comprised of
one or more parcels, each of which constitutes a separate tax lot and none of
which constitutes a portion of any other tax lot.
5.1.30. Assessments.
-----------
Except as disclosed in the title insurance policies, there are no
pending or, to the knowledge of Borrower proposed special or other assessments
for public improvements or otherwise affecting any Collateral Pool Property,
nor, to the knowledge of Borrower are there any contemplated improvements to any
Collateral Pool Property that may result in such special or other assessments.
5.1.31. No Liabilities.
--------------
Borrower has no liabilities or obligations including, without
limitation, contingent obligations (including, without limitation, liabilities
or obligations in tort, in contract, at law, in equity, pursuant to a statute or
regulation, or otherwise) other than those liabilities and obligations expressly
permitted by this Agreement.
5.1.32. No Prior Assignment.
-------------------
As of the Closing Date, (i) Lender shall be Assignee of Borrower's
interest under any leases, and (ii) there are no prior assignments of any leases
or any portion of the rents due and payable or to become due and payable which
are presently outstanding.
5.1.33. Certificate of Occupancy.
------------------------
Borrower has obtained (in its own name or is the express successor or
assignee of) all permits necessary to use and operate the Collateral Pool
Properties for the uses described in Section 2.8, and all such permits are in
-----------
full force and effect. The use being made of each Collateral Pool Property is
in conformity in all respects with the certificate of occupancy and/or permits
for such Collateral Pool Property and any other restrictions, covenants or
conditions
-38-
affecting such Collateral Pool Property, including without limitation, the
applicable zoning and land use ordinances. Each Collateral Pool Property
contains all equipment necessary to use and operate such Collateral Pool
Property in a first-class manner.
5.1.34. Intellectual Property.
---------------------
All trademarks, trade names and service marks that Borrower owns or
has pending, or under which Borrower is licensed, are in good standing and
uncontested. Borrower has not infringed, is not infringing, and has not
received notice of infringement with respect to asserted trademarks, trade names
and service marks of others. To the knowledge of Borrower there is no
infringement by others of trademarks, trade names and service marks of Borrower.
5.1.35. Conduct of Business.
-------------------
Borrower does not conduct its business "also known as", "doing
business as" or under any other name.
5.1.36. Title Insurance.
---------------
Each Collateral Pool Property is covered by a title insurance policy
acceptable to Lender.
5.1.37. No Default.
----------
The execution, delivery and performance of the obligations imposed on
Borrower, if any, under this Agreement, the Revolving Credit Note and the other
Loan Documents will not cause Borrower to be in default under the provisions of
any agreement, judgment or order to which Borrower is a party or by which
Borrower is bound. There is no litigation or other claim pending before any
court or administrative or governmental body or overtly threatened by a written
communication against Borrower, the Collateral Pool Property, or any other
property of Borrower which would result in a Material Adverse Change or which is
not covered by insurance.
5.1.38. Condition of the Collateral Pool Properties.
-------------------------------------------
To the extent that any of the Collateral Pool Properties have been
damaged by fire, water, wind, earthquake or other cause of loss such Collateral
Pool Property has been fully restored. Borrower covenants that it shall make
all reasonable repairs to the Collateral Pool Properties that are requested by
Lender.
5.1.39. Non-Residential Leases.
----------------------
Gross income derived from the commercial space located in any
Collateral Pool Property shall not exceed twenty-five (25%) percent of the total
gross income of such Collateral Pool Property. Neither Borrower, nor any
managing member, nor Guarantor, is an Affiliate or otherwise related to the
lessee under any leases for laundry equipment, telecommunications, television or
similar systems on or about any of the Collateral Pool Properties.
-39-
5.1.40. No Low Income Housing Tax Credit.
--------------------------------
Except as disclosed to Lender in writing, Borrower has not claimed,
nor does Borrower intend to claim a low income housing tax credit for any of the
Collateral Pool Properties under Section 42 of the Internal Revenue Code of
1986, or any successor Section thereto. Should Borrower later decide to pursue
claiming such a tax credit, Borrower will not proceed without obtaining Lender's
prior written consent to do so.
5.1.41. No Restrictions.
---------------
Except as disclosed to Lender in writing, there are no rent level
restrictions or tenant income restrictions on the Collateral Pool Properties.
5.1.42. No Adverse Affect on the Loan.
-----------------------------
To Borrower's knowledge, nothing involving the Collateral Pool
Properties, Borrower or Borrower's credit standing may be reasonably expected to
(i) cause any payments under this Agreement, the Revolving Credit Note and any
other Loan Documents to become delinquent or (ii) adversely affect the
Collateral Pool Value.
5.1.43. Term of Leases.
--------------
Except as disclosed to Lender in writing, all residential leases with
respect to the Collateral Pool Property are for terms of two (2) years or less.
5.2. Updates to Schedules.
--------------------
Borrower shall provide with each Loan Request that will result in an
increase in the Loan, written revisions to any Schedule to this Agreement which
has become outdated or incorrect in any material respect or omits any material
information required by the related representation and warranty to be disclosed
therein at the time of such Loan Request. In addition, should any of the
information or disclosures provided on any of the Schedules attached hereto
become outdated or incorrect or omit information required by the related
representation and warranty to be disclosed therein and such updates,
corrections or additions relate to a matter which would be a Material Adverse
Change, Borrower shall promptly provide Lender in writing with such revisions to
such Schedule as may be necessary or appropriate to correct or update same.
Notwithstanding the providing of revised Schedules, a breach of warranty or
representation resulting from the prior inaccuracy or incompleteness of any such
Schedule shall not be deemed to have been cured thereby or waived by Lender
unless and until Lender, in its sole and absolute discretion, shall have
accepted in writing such revisions or updates to such Schedule; and provided,
further that no Schedule shall be deemed to have been updated by any such
revision unless and until Lender funds the additional Loan Request.
5.3. Survival of Representations and Warranties.
------------------------------------------
Borrower agrees that (i) all of the representations and warranties of
Borrower set forth in this Agreement and in the other Loan Documents delivered
on the Closing Date are made
-40-
as of the Closing Date (except as expressly otherwise provided) and (ii) all
representations and warranties made by Borrower shall survive the delivery of
the Revolving Credit Note and continue (a) for so long as any amount remains
owing to Lender under this Agreement, the Revolving Credit Note or any of the
other Loan Documents or (b) until the date on which Lender terminates this
Credit Facility in the event Lender releases all assets in the Collateral Pool
from any Lien securing the Loan Documents pursuant to the provisions of Section
-------
2.10, whichever is later. All representations, warranties, covenants and
----
agreements made in this Agreement or in the other Loan Documents shall be deemed
to have been relied upon by Lender notwithstanding any investigation heretofore
or hereafter made by Lender or on its behalf.
6. CONDITIONS OF LENDING
---------------------
The obligation of Lender to fund any Borrowing Tranche(s) hereunder is
subject to the performance by Borrower of its Obligations to be performed
hereunder at or prior to the funding of any such Borrowing Tranche(s) to the
satisfaction of the following further conditions:
6.1. Initial Borrowing Tranche.
On the Closing Date:
6.1.1. Delivery of Loan Documents.
--------------------------
All Loan Documents not previously executed and delivered to Lender
shall have been duly executed and delivered to Lender, together with all
appropriate financing statements.
6.1.2. Officer's Certificate.
---------------------
The representations and warranties of Borrower contained in Section 5
---------
and in each of the other Loan Documents shall be true and accurate in all
material respects on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein), and Borrower shall have performed
and complied with all covenants and conditions hereof and thereof, no Event of
Default or Potential Default shall have occurred and be continuing or shall
exist, and there shall be delivered to Lender a certificate of Borrower dated
the Closing Date and signed by an Authorized Officer of Borrower to each such
effect.
6.1.3. Secretary's Certificate.
-----------------------
There shall be delivered to and for the benefit of Lender a
certificate dated the Closing Date and signed by an Authorized Officer,
certifying as appropriate as to:
6.1.3.1. all required action taken by Borrower in connection
with this Agreement and the other Loan Documents;
-41-
6.1.3.2. the names of the officer or officers authorized to
sign this Agreement and the other Loan Documents and the true signatures of such
officer or officers and specifying the Authorized Officers permitted to act on
behalf of Borrower for purposes of this Agreement and the true signatures of
such officers, on which Lender may conclusively rely; and
6.1.3.3. copies of the organizational documents of Borrower
including its certificate of incorporation, bylaws, certificate of limited
partnership, partnership agreement, certificate of formation, and limited
liability company agreement as in effect on the Closing Date certified by the
appropriate state official where such documents are filed in a state office
together with certificates from the appropriate state officials as to the
continued existence and good standing of Borrower in each state where organized
or qualified to do business and a bring-down certificate by facsimile dated
within thirty (30) Business Days of the Closing Date.
6.1.4. Opinion of Counsel.
------------------
There shall be delivered to Lender, a written opinion of counsel for
Borrower dated the Closing Date and in form and substance satisfactory to Lender
and its counsel as to matters customary to the transactions contemplated herein,
or as Lender may reasonably request.
6.1.5. Legal Details.
-------------
All legal details and proceedings in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall be in form and
substance satisfactory to Lender and counsel for Lender, and Lender shall have
received all such other counterpart originals or certified or other copies of
such documents and proceedings in connection with such transactions, in form and
substance satisfactory to Lender and said counsel, as Lender or said counsel may
reasonably request.
6.1.6. Payment of Fees.
---------------
Borrower shall have paid or caused to be paid to Lender and Servicer
to the extent not previously paid all fees accrued through the Closing Date and
all of Lender's and Servicer's costs and expenses, including, but not limited
to, attorney's fees, title insurance premiums, surveys, appraisals, all costs
incurred in obtaining environmental, engineering and credit reports, all third
party due diligence costs and other costs and expenses incurred in connection
with the closing of this Credit Facility.
6.1.7. Consents.
--------
All material consents required to effectuate the transactions
contemplated hereby shall have been obtained.
6.1.8. Officer's Certificate Regarding No Material Adverse Change.
----------------------------------------------------------
Since the date of Borrower's formation, no Material Adverse Change
shall have occurred; prior to the Closing Date, there shall have been no
material change in the management
-42-
of Borrower; and there shall have been delivered to Lender a certificate dated
the Closing Date and signed by an Authorized Officer of Borrower to each such
effect.
6.1.9. No Violation of Laws.
--------------------
The making of the Loan shall not contravene any Law applicable to
Borrower or Lender.
6.1.10. No Actions or Proceedings.
-------------------------
No action, proceeding, investigation, regulation or legislation shall
have been instituted, threatened or proposed before any court, governmental
agency or legislative body to enjoin, restrain or prohibit, or to obtain damages
in respect of, this Agreement, the other Loan Documents or the consummation of
the transactions contemplated hereby or thereby or which, in Lender's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement or any of the other Loan Documents.
6.1.11. Collateral Initially Included in Collateral Pool.
------------------------------------------------
With respect to the Collateral which is part of the Collateral Pool at
Closing, Borrower has delivered all Underwriting Materials required hereunder
for inclusion of such Collateral into the Collateral Pool, and Lender has
approved the inclusion therein.
6.1.12. Other Conditions.
----------------
Borrower shall have satisfied such other reasonable conditions as
required by Lender or Lender's legal counsel.
6.2. Each Additional Borrowing Tranche.
---------------------------------
At the time of funding of any Borrowing Tranche (excluding renewals,
conversions and continuances of any outstanding Borrowing Tranche(s) which do
not increase the outstanding amount of the principal amount of the Loan made
hereunder) other than the funds advanced on the Closing Date, and after giving
effect to the proposed extensions of credit: (i) the representations and
warranties of Borrower contained in Section 5 and in the other Loan Documents
---------
shall be true in all material respects on and as of the date of the funding of
any Borrowing Tranche or with the same effect as though such representations and
warranties had been made on and as of the date of any such additional funding of
any Borrowing Tranche (except representations and warranties that expressly
relate solely to an earlier date or time, which representations and warranties
shall be true and correct in all material respects on and as of the specific
dates or times referred to therein and except such changes as would not
constitute a Material Adverse Change) and Borrower shall have performed and
complied with all covenants and conditions hereof; (ii) no Event of Default or,
to the knowledge of Borrower, Potential Default shall have occurred and be
continuing or shall exist; (iii) the funding of any Borrowing Tranche shall not
contravene any Law applicable to Borrower, or its Affiliates or Lender; and (iv)
Borrower shall have delivered to Lender a duly executed and completed Loan
Request as the case may be.
-43-
7. COVENANTS
---------
7.1. Covenants.
Borrower covenants and agrees that until payment in full of the Loan
and interest thereon, satisfaction of all of the other Obligations of Borrower
under the Loan Documents and termination of the Commitment, Borrower shall
comply at all times with the following covenants:
7.1.1. Preservation of Existence.
-------------------------
Borrower shall, and shall cause each of its Affiliates to, maintain
its legal existence as a corporation, general or limited partnership or limited
liability company and its license or qualification and good standing in each
jurisdiction in which its ownership or lease of property or the nature of its
business makes such license or qualification necessary.
7.1.2. Maintenance of Real Estate Properties and Leases.
------------------------------------------------
Borrower (i) shall not commit waste or permit impairment or
deterioration of the Collateral Pool Properties, (ii) shall not abandon the
Collateral Pool Properties, (iii) shall restore or repair promptly, in a good
and workmanlike manner, any damaged part of the Collateral Pool Properties to
the equivalent of its original condition, or such other condition as Lender may
approve in writing, whether or not insurance proceeds or condemnation awards are
available to cover any costs of such restoration or repair (provided that Lender
shall make any insurance proceeds or condemnation awards received by Lender
available to Borrower for restoration and repair), (iv) shall keep the
Collateral Pool Properties in good repair, including the replacement of any
personalty and fixtures located on any Collateral Pool Property with items of
equal or better function and quality, (v) shall provide for professional
management of the Collateral Pool Properties by a residential rental property
manager satisfactory to Lender under a contract approved by Lender in writing
(provided that Lender's approval is not required for a manager or a management
agreement where an Affiliate of Borrower is the manager), and (vi) shall give
notice to Lender of and, unless otherwise directed in writing by Lender, shall
appear in and defend any action or proceeding purporting to affect the
Collateral Pool Properties, Lender's security or Lender's rights under this
Agreement. Borrower shall not (and shall not permit any tenant or other person
to) remove, demolish or alter the Collateral Pool Properties or any part of the
Collateral Pool Properties except in connection with the replacement of tangible
personalty.
7.1.3. Collateral Agreements
---------------------
Borrower shall deposit with Lender such amounts as may be required by
any Collateral Agreement and shall perform all other obligations of Borrower
under each Collateral Agreement.
7.1.4. Inspection Rights.
-----------------
Lender, its agents, representatives, and designees may make or cause
to be made entries upon and inspections of the Collateral Pool Properties
(including environmental inspections and tests) during normal business hours, or
at any other reasonable time.
-44-
7.1.5. Single Asset Borrower.
---------------------
Prior to the Expiration Date, Borrower (i) shall not acquire any real
or personal property other than the Collateral Pool Properties and personal
property related to the operation and maintenance of the Collateral Pool
Properties; (ii) shall not operate any business other than the management and
operation of the Collateral Pool Properties; and (iii) shall not maintain its
assets in a way difficult to segregate and identify.
7.1.6. Use of Proceeds.
---------------
Borrower will use the proceeds of the Loan only for lawful purposes in
accordance with Section 2.8 hereof.
-----------
7.1.7. Further Assurances.
------------------
Borrower shall, from time to time, at its expense, faithfully preserve
and protect Lender's Lien on and Prior Security Interest in the Collateral as a
continuing first priority perfected Lien, subject only to Permitted Exceptions,
and shall do such other acts and things as Lender in its sole discretion may
deem necessary or advisable from time to time in order to preserve, perfect and
protect the Liens granted under the Loan Documents and to exercise and enforce
its rights and remedies thereunder with respect to the Collateral provided (x)
the terms and conditions of this Agreement and the other Loan Documents are not
changed thereby, (y) Lender will use its best efforts to minimize costs and
expenses incurred in connection with a request under this subsection, and (z)
Borrower's obligations hereunder or under any other Loan Documents are not
increased or otherwise adversely affected thereby except for incidental costs
and expenses such as recording fees and reasonable attorneys' fees and expenses.
7.1.8. Collateral Pool Properties.
--------------------------
With respect to Collateral Pool Properties:
7.1.8.1. Borrower shall be in compliance with the Sublimits
set forth in Section 2.1.1 at such times as expressly required in this
Agreement; and
7.1.8.2. Borrower will own at all times the entire equity
interest in each Collateral Pool Property.
7.1.9. Subsequent Periodic Appraisals and Valuations.
---------------------------------------------
Borrower shall cooperate with Lender and its agent and provide such
information in its possession as such parties shall reasonably require to
complete a new Valuation for each Collateral Pool Property in the Collateral
Pool.
7.1.10. Special ERISA Related Covenants.
-------------------------------
7.1.10.1. Borrower shall at all times be a "real estate
operating company" within the meaning of such term contained in 29 CFR (S)
2510.3-101(d) or an entity
-45-
whose underlying Assets are not deemed to be assets of a Pension Plan as defined
in Section 3(3) of ERISA.
7.1.10.2. Borrower shall, and shall cause each other member of
the ERISA Group to, comply with ERISA, the Internal Revenue Code and other
applicable Laws applicable to Pension Plans and Benefit Arrangements. Without
limiting the generality of the foregoing, Borrower shall cause all of its
Pension Plans and all Pension Plans maintained by any member of the ERISA Group
to be funded in accordance with the minimum funding requirements of ERISA and
shall make, and cause each member of the ERISA Group to make, in a timely
manner, all contributions due to Pension Plans, Benefit Arrangements and
Multiemployer Plans.
7.1.10.3. Borrower or members of the ERISA Group shall not
employ any employee or be a party to any Benefit Arrangement.
7.1.10.4. Borrower and members of the ERISA Group shall not:
(i) fail to satisfy the minimum funding requirements
of ERISA and the Internal Revenue Code with respect to any Pension Plan;
(ii) request a minimum funding waiver from the
Internal Revenue Service with respect to any Pension Plan;
(iii) engage in a Prohibited Transaction with any
Pension Plan, Benefit Arrangement or Multiemployer Plan which, alone or in
conjunction with any other circumstances or set of circumstances resulting in
liability under ERISA, would constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present value of
all benefit liabilities (whether or not vested) under each Pension Plan,
determined on a plan termination basis, as disclosed in the most recent
actuarial report completed with respect to such Pension Plan, to exceed, as of
any actuarial valuation date, the fair market value of the assets of such
Pension Plan;
(v) fail to make when due any contribution to any
Multiemployer Plan that Borrower or any member of the ERISA Group may be
required to make under any agreement relating to such Multiemployer Plan, or any
Law pertaining thereto;
(vi) withdraw (completely or partially) from any
Multiemployer Plan or withdraw (or be deemed under Section 4062(e) of ERISA to
withdraw) from any Multiple Employer Pension Plan, where any such withdrawal is
likely to result in a material liability of Borrower or any member of the ERISA
Group;
(vii) terminate, or institute proceedings to terminate,
any Pension Plan, where such termination is likely to result in a material
liability to Borrower or any member of the ERISA Group;
-46-
(viii) make any amendment to any Pension Plan with
respect to which security is required under Section 307 of ERISA; or
(ix) fail to give any and all notices and make all
disclosures and governmental filings required under ERISA or the Internal
Revenue Code, where such failure is likely to result in a Material Adverse
Change.
7.1.11. Indebtedness.
------------
Borrower shall not, at any time, create, incur, assume or suffer to
exist any Indebtedness, except:
7.1.11.1. Permanent Loans to Lender;
7.1.11.2. Indebtedness under the Loan Documents;
7.1.11.3. Trade debt incurred in the ordinary course of
business and any subordinate intercompany debt.
7.1.12. Liens.
-----
Borrower shall not, at any time, create, incur, assume or suffer to
exist any Lien on any of its property or assets, tangible or intangible, now
owned or hereafter acquired, or agree or become liable to do so, except
Permitted Exceptions. Upon Lender's reasonable request, which request shall not
be made more frequently than annually unless Lender has a reasonable suspicion
of a title defect, Borrower shall promptly perform or cause to be performed, at
Borrower's sole cost and expense, a title search satisfactory to Lender,
demonstrating Borrower's compliance with the provisions of this Section 7.1.12.
--------------
7.1.13. Liquidations, Mergers, Consolidations, Acquisitions.
---------------------------------------------------
Borrower shall not dissolve, liquidate or wind-up its affairs, or
become a party to any merger or consolidation, or acquire by purchase, lease or
otherwise all or substantially all of the assets or capital stock of any other
Person. Nothing contained herein or in any other Loan Document shall be deemed
to prohibit, limit or require any consent with respect to any change in control,
merger, consolidation, sale of all or substantially all assets or any similar
transaction with respect to Xxxxxxx X. Xxxxx Residential Realty, Inc. and
Xxxxxxx X. Xxxxx Residential Realty LP.
7.1.14. Dispositions of Assets or Affiliates.
------------------------------------
Borrower shall not sell, convey, assign, lease, abandon or otherwise
transfer or dispose of, voluntarily or involuntarily, all or substantially all
of its Assets, provided, however, the foregoing shall not be construed to
prevent Borrower from selling, conveying or leasing the Assets as permitted
pursuant to the terms of this Agreement.
-47-
7.1.15. Affiliate Transactions.
----------------------
Borrower shall not acquire or purchase an Asset in which any Affiliate
has a direct or indirect ownership interest otherwise than upon terms which are
no less favorable than those terms which would be obtained in an arms length
transaction with a third party.
7.1.16. Continuation of or Change in Business.
-------------------------------------
Borrower shall not engage in any business activities except as
permitted under its organizational documents and this Agreement.
7.1.17. Changes in Organizational Documents.
-----------------------------------
Borrower shall not amend in any respect its certificate of
incorporation (including any provisions or resolutions relating to capital
stock), by-laws, certificate of limited partnership, or limited partnership
agreement (as applicable) or other formation agreement or other organizational
documents without first sending notice to Lender and obtaining the prior written
consent of Lender, which shall be granted or denied within thirty (30) Business
Days of Lender's receipt of the proposed amendment, a brief explanation of its
purpose and effect, and such other documents as Lender may reasonably request.
7.1.18. Properties Under Development.
----------------------------
Except as disclosed to Lender in writing, no Collateral Pool Property
shall be raw land or property under construction or development with respect to
which property construction or reconstruction will be needed before the property
can be leased to tenants paying rent at any one time (collectively "Development
Properties").
7.1.19. Further Documentation.
---------------------
In the event any further documentation or information is required by
Lender to enable Lender to sell the Loan, Borrower shall provide, or cause to be
provided to Lender, at Borrower's sole cost and expense, such documentation or
information. Borrower shall execute and deliver to Lender such documentation,
including but not limited to, any amendments, corrections, deletions or
additions to this Agreement, the Revolving Credit Note, and the other Loan
Documents as is required by Lender; provided, however, that Borrower shall not
be required to do anything that has the effect of (a) changing the material
economic or other business terms of this Agreement, the Revolving Credit Note,
or any other Loan Documents or (b) imposing on Borrower greater liability or
obligation than that set forth in this Agreement, the Revolving Credit Note or
any other Loan Documents.
7.1.20. Compliance with Lender Requirements.
-----------------------------------
Borrower shall comply with the requirements of Lender in order to
enable Lender to sell the Loan; provided, however, that Borrower shall not be
required to do anything that has the effect of (a) changing the material
economic or other business terms of this Agreement, the Revolving Credit Note,
or any other Loan Documents or (b) imposing on Borrower greater
-48-
liability or obligation than that set forth in this Agreement, the Revolving
Credit Note or any other Loan Documents.
7.1.21. Subordination of Leases.
-----------------------
Borrower covenants, if any lease of any Collateral Pool Property is
not subordinate to the mortgage securing such Collateral Pool Property, Borrower
shall (i) use a new standard lease form containing subordination language
acceptable to Lender, for all new leases of such Collateral Pool Property; and
(ii) execute the new form of lease on any renewal of any existing leases of such
Collateral Pool Property.
7.1.22. Enforceability of Loan Documents.
--------------------------------
In the event that any of the Loan Documents shall cease to be legal,
valid and binding agreements enforceable against the party executing the same or
such party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof (except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforceability of creditors'
rights generally or limiting the right to specific performance) or shall in any
way be terminated (except in accordance with its terms) or become or be declared
ineffective or inoperative or shall in any way be challenged or contested,
resulting in the failure to provide the practical benefit of the respective
Liens, security interests, rights, titles, interests, remedies, powers or
privileges intended to be created thereby, Borrower shall use best efforts to
cure any such defect(s) in such Loan Document(s) provided, however, that, if
Borrower is unable to cure any such defect(s) within a reasonable time period,
not to exceed thirty (30) days, Lender may in its discretion, upon ten (10) days
notice to Borrower, accelerate Borrower's obligations under the Revolving Credit
Note;
7.1.23. ERISA Matters.
-------------
In the event that any of the following occurs: (i) any Reportable
Event, which Lender determines in good faith constitutes grounds for the
termination of any Pension Plan by the PBGC or the appointment of a trustee to
administer or liquidate any Pension Plan, shall have occurred and be continuing;
(ii) proceedings shall have been instituted or other action taken to terminate
any Pension Plan, or a termination notice shall have been filed with respect to
any Pension Plan; (iii) a trustee shall be appointed to administer or liquidate
any Pension Plan; (iv) the PBGC shall give notice of its intent to institute
proceedings to terminate any Pension Plan or Pension Plans or to appoint a
trustee to administer or liquidate any Pension Plan; and, in the case of the
occurrence of (i), (ii), (iii) or (iv) above, Lender determines in good faith
that the amount of Borrower's liability is likely to cause a Material Adverse
Change; (v) Borrower or any member of the ERISA Group shall fail to make any
contributions when due to a Pension Plan or a Multiemployer Plan; (vi) Borrower
or any member of the ERISA Group shall make any amendment to a Pension Plan with
respect to which security is required under Section 307 of ERISA; (vii) Borrower
or any member of the ERISA Group shall withdraw completely or partially from a
Multiemployer Plan; or (viii) any applicable Law, rule or regulation is adopted,
changed or interpreted by any governmental authority or agency or court with
respect to or
-49-
otherwise affecting one or more Pension Plans, Multiemployer Plans or Benefit
Arrangements and, with respect to any of the events specified in (v), (vi),
(vii) or (viii), Lender determines in good faith that any such occurrence would
be reasonably likely to materially and adversely affect the total enterprise
represented by Borrower and the other members of the ERISA Group, Borrower shall
use best efforts to cure such occurrence(s), provided, however, that if Borrower
is unable to cure any such occurrence(s) within a reasonable time period, not to
exceed thirty (30) days, Lender may in its discretion, upon ten (10) days notice
to Borrower, accelerate Borrower's obligations under the Revolving Credit Note;
7.2. Reporting Requirements.
----------------------
Borrower covenants and agrees that until payment in full of the Loan,
satisfaction of all of Borrower's other Obligations hereunder and under the
other Loan Documents and termination of the Commitment, Borrower will furnish or
cause to be furnished to Lender:
7.2.1. Notice of Default.
-----------------
If to the knowledge of Borrower an Event of Default or Potential
Default has occurred with respect to Borrower, a certificate signed by an
Authorized Officer of Borrower setting forth the details of such Event of
Default or Potential Default and the actions that Borrower proposes to take with
respect thereto.
7.2.2. Notice of Litigation.
--------------------
Promptly after the commencement thereof, notice of all actions, suits,
proceedings or investigations before or by any Official Body or any other Person
which (a) relate to the Collateral, or (b) involve a claim or series of claims
in excess of One Hundred Thousand and NO/100 Dollars ($100,000.00) which is not
covered by Borrower's insurance policies and which if adversely determined would
constitute a Material Adverse Change.
7.2.3. Notice of Material Adverse Change.
---------------------------------
Borrower shall promptly notify Lender of any Material Adverse Change
affecting Borrower, Guarantor or any Collateral Pool Property.
8. DEFAULT
-------
8.1. Events of Default.
The occurrence or existence of any one or more of the following events
or conditions (whatever the reason therefor and whether voluntary, involuntary
or effected by operation of Law) shall be an "Event of Default":
8.1.1. Payments Under Loan Documents.
-----------------------------
Borrower shall fail to pay any principal under any Borrowing Tranche
(including scheduled installments, mandatory prepayments or the payment due at
maturity), or shall fail to
-50-
pay any interest on any Loan or any other amount owing hereunder or under any
other Loan Documents after such principal, interest or other amount becomes due
in accordance with the terms hereof or thereof;
8.1.2. Breach of Representation or Warranty.
------------------------------------
Any representation or warranty made at any time by Borrower herein or
in any other Loan Document, or in any certificate, other instrument or statement
furnished pursuant to the provisions hereof or thereof, shall prove to have been
false or misleading in any material respect as of the time it was made or
furnished and the result of such false or misleading representation, warranty,
certificate, other instrument or statement is a Material Adverse Change which is
not cured within thirty (30) days after written notice thereof from Lender to
Borrower of such breach, or within such additional reasonable time necessary to
cure such breach, in the event Borrower commences such cure within such thirty
(30) day period and thereafter diligently pursues such cure, not to exceed sixty
(60) additional days;
8.1.3. Breach of Covenant.
------------------
Borrower shall default in the observance or performance of any
covenant, condition or provision hereof or of any other Loan Document which is
not cured within thirty (30) days after written notice thereof from Lender to
Borrower of such default, or such additional reasonable time necessary to cure
such default, in the event Borrower commences such cure within such thirty (30)
day period and thereafter diligently pursues such cure, not to exceed sixty (60)
additional days;
8.1.4. Event of Default under the Loan Documents.
-----------------------------------------
Borrower shall be in default under the Revolving Credit Note, or any
other Loan Document beyond any applicable cure period.
8.1.5. Final Judgments or Orders.
-------------------------
Any final judgments or orders for the payment of money in excess of
One Hundred Thousand and NO/100 Dollars ($100,000.00) in the aggregate shall be
entered against Borrower by a court having jurisdiction in the premises, which
judgment is not discharged, vacated, bonded or stayed pending appeal within a
period of thirty (30) days from the date of entry;
8.1.6. Notice of Lien or Assessment.
----------------------------
A notice of Lien or assessment in excess of One Million Dollars
($1,000,000) which is not a Permitted Exception is filed of record with respect
to all or any part of any of the Assets by the United States, or any department,
agency or instrumentality thereof, or by any state, county, municipal or other
governmental agency, including the PBGC, or any taxes or debts owing at any time
or times hereafter to any one of these becomes payable and the same is not paid
or otherwise discharged within thirty (30) days after the same becomes payable,
unless the same is being contested in accordance with the Loan Documents.
-51-
8.1.7. Insolvency.
----------
Borrower ceases to be Solvent or admits in writing its inability to
pay its debts as they mature;
8.1.8. Cessation of Business.
---------------------
Borrower ceases to conduct the business of Borrower, or Borrower is
enjoined, restrained or in any way prevented by court order from conducting all
or any material part of the business of Borrower, and such injunction, restraint
or other preventive order is not dismissed within ten (10) Business Days after
the entry thereof;
8.1.9. Lien Priority.
-------------
The Liens granted to and for the benefit of Lender do not constitute
valid first priority Liens (subject to Permitted Exceptions) under applicable
laws and such default shall continue unremedied for a period of thirty (30)
Business Days after Borrower's knowledge of the occurrence thereof or such
additional reasonable time period necessary to cure such default, in the event
Borrower commences such cure within such thirty (30) day periods and thereafter
diligently pursues such cure, not to exceed sixty (60) additional days (such
cure period to be applicable only in the event such default can be remedied by
corrective action of Borrower to the satisfaction of Lender as determined by
Lender in its reasonable discretion);
8.1.10. Bankruptcy and Other Proceedings.
--------------------------------
Borrower voluntarily files for bankruptcy protection under the United
States Bankruptcy Code or voluntarily becomes subject to any reorganization,
receivership, insolvency proceeding or other similar proceeding pursuant to any
other federal or state law affecting debtor and creditor rights, or an
involuntary case is commenced against Borrower by any creditor (other than
Lender) of Borrower pursuant to the United States Bankruptcy Code or other
federal or state law affecting debtor and creditor rights and is not dismissed
or discharged within one hundred and eighty (180) days after filing.
8.2. Consequences of Event of Default.
--------------------------------
Upon an Event of Default under Section 8.1 Lender shall be entitled to
-----------
all of the rights and remedies granted to Lender under the Loan Documents and
applicable Law, all of which rights and remedies shall be cumulative and non-
exclusive, to the extent permitted by Law.
8.3. Notice of Sale.
--------------
Any notice required to be given by Lender of a sale, lease, or other
disposition of the Collateral or any other intended action by Lender under the
Uniform Commercial Code, if given ten (10) days prior to such proposed action,
shall constitute commercially reasonable and fair notice thereof to Borrower.
-52-
9. MISCELLANEOUS
-------------
9.1. Cooperation by Borrower; Borrower's Obligations.
Borrower grants to Lender the right to distribute on a confidential
basis financial and other information concerning Borrower, each indemnitor,
other Person, the Collateral Pool Properties, and other pertinent information
with respect to the Credit Facility to any party purchasing securities issued by
Lender.
9.2. Successors and Assigns.
----------------------
This Agreement shall be binding upon and shall inure to the benefit of
Lender, Borrower and their respective successors and assigns, except that
Borrower may not assign or transfer any of its respective rights or Obligations
hereunder or any interest herein.
9.3. Modifications, Amendments or Waivers.
------------------------------------
Lender and Borrower may from time to time enter into written
agreements amending or changing any provision of this Agreement or any other
Loan Document or the rights of Lender or Borrower hereunder or thereunder, or
may grant written waivers or consents to a departure from the due performance of
the Obligations of Borrower hereunder or thereunder. Any such written
agreement, waiver or consent shall be effective to bind Lender and Borrower.
9.4. Forbearance.
-----------
Lender may (but shall not be obligated to) agree with Borrower, from
time to time, and without giving notice to, or obtaining the consent of, or
having any effect upon the obligations of, any guarantor or other third party
obligor, to take any of the following actions: extend the time for payment of
all or any part of the Loan; reduce the payments due under this Agreement, the
Revolving Credit Note, or any other Loan Document; release anyone liable for the
payment of any amounts under this Agreement, the Revolving Credit Note, or any
other Loan Document; modify the terms and time of payment of the Loan; join in
any extension or subordination agreement; release any Collateral Pool Property;
take or release other or additional security; modify the rate of interest or
period of amortization of the Revolving Credit Note or change the amount of the
monthly installments payable under the Revolving Credit Note; and otherwise
modify this Agreement, the Revolving Credit Note, or any other Loan Document.
Any forbearance by Lender in exercising any right or remedy under the
Revolving Credit Note, this Agreement, or any other Loan Document or otherwise
afforded by applicable Law, shall not be a waiver of or preclude the exercise of
any right or remedy. The acceptance by Lender of payment of all or any part of
the Loan after the due date of such payment, or in an amount which is less than
the required payment, shall not be a waiver of Lender's right to require prompt
payment when due of all other payments on account of the Loan or to exercise any
remedies for any failure to make prompt payment. Enforcement by Lender of any
security for the Loan shall not constitute an election by Lender of remedies so
as to preclude the exercise of any other right available to Lender. Lender's
receipt of any awards or proceeds shall not operate to cure or waive any Event
of Default.
-53-
9.5. Remedies Cumulative.
-------------------
Each right and remedy provided in this Agreement is distinct from all
other rights or remedies under this Agreement or any other Loan Document or
afforded by applicable law, and each shall be cumulative and may be exercised
concurrently, independently, or successively, in any order.
9.6. Reimbursement and Indemnification of Lender and Servicer by Borrower;
--------------------------------------------------------------------
Taxes.
-----
Borrower agrees unconditionally upon demand to pay or reimburse to
Lender and Servicer and to hold Lender and Servicer harmless against (i)
liability for the payment of all reasonable out-of-pocket costs, expenses and
disbursements (including fees and expenses of counsel for Lender and Servicer,
incurred by Lender and Servicer (a) in connection with the administration and
interpretation of this Agreement, and other instruments and documents to be
delivered hereunder, (b) relating to any amendments, waivers or consents
pursuant to the provisions hereof, (c) in connection with the enforcement of
this Agreement or any other Loan Document, or collection of amounts due
hereunder or thereunder or the proof and allowability of any claim arising under
this Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (d) in any workout or restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or under any other Loan Document or
in connection with any foreclosure, collection or bankruptcy proceedings, or
(ii) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against Lender or
Servicer, in its capacity as such, in any way relating to or arising out of this
Agreement or any other Loan Documents or any action taken or omitted by Lender
or Servicer hereunder or thereunder, provided that no Borrower shall be liable
--------
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements (A) if the same
results from Lender's negligence or willful misconduct or breach of this
Agreement or any action taken with respect to a Collateral Pool Property after
Lender has acquired title to such Collateral Pool Property in a foreclosure
proceeding, or (B) if Borrower was not given notice of the subject claim and the
opportunity to participate in the defense thereof, at its expense (except that
Borrower shall remain liable to the extent such failure to give notice does not
result in a loss to Borrower), or (C) if the same results from a compromise or
settlement agreement entered into without the consent of Borrower, which shall
not be unreasonably withheld. Borrower agrees unconditionally to pay all stamp,
document, transfer, recording or filing taxes or fees and similar impositions
now or hereafter determined by Lender to be payable in connection with this
Agreement or any other Loan Document, and Borrower agrees unconditionally to
hold Lender and Servicer harmless from and against any and all present or future
claims, liabilities or losses with respect to or resulting from any omission to
pay or delay in paying any such taxes, fees or impositions.
9.7. Holidays.
--------
Whenever the funding of a Borrowing Tranche hereunder shall be due on
a day which is not a Business Day such payment shall be due on the next Business
Day and such
-54-
extension of time shall be included in computing interest and fees, except that
the Loan shall be due on the Business Day preceding the Expiration Date if the
Expiration Date is not a Business Day. Whenever any payment or action to be made
or taken hereunder (other than payment of the Loan) shall be stated to be due on
a day which is not a Business Day, such payment or action shall be made or taken
on the next following Business Day, and such extension of time shall not be
included in computing interest or fees, if any, in connection with such payment
or action.
9.8. Notices.
-------
All notices, requests, demands, directions and other communications
(as used in this Section 9.8, collectively referred to as "notices") given to or
-----------
made upon any party hereto under the provisions of this Agreement shall be by
telephone or in writing (including telex or facsimile communication) unless
otherwise expressly permitted hereunder and shall be delivered or sent by telex,
facsimile, certified mail or hand delivery if to Lender, to Lender at the
address and numbers set forth below, and if to Borrower or Proposed Borrower, to
each of them at the addresses and numbers set forth below, or in accordance with
any subsequent unrevoked written direction from any party to the others. All
notices shall, except as otherwise expressly herein provided, be effective (a)
in the case of telex or facsimile, when received, (b) in the case of hand-
delivered notice, when hand-delivered, (c) in the case of telephone, when
telephoned, provided, however, that in order to be effective, telephonic notices
--------
must be confirmed in writing no later than the next day by letter, facsimile or
telex, (d) if given by certified mail, three (3) days after such communication
is deposited in the mail with first-class postage prepaid, return receipt
requested, and (e) if given by any other means (including by air courier), when
delivered; provided, that notices to Lender shall not be effective until
--------
received.
Lender's Notice Address and Numbers:
Columbia National Real Estate Finance, Inc.
0000 Xxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
0000 X. Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
Borrower's Notice Address:
Xxxxxxx X. Xxxxx Realty Companies
0000 Xxxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
-55-
Attention: Chief Financial Officer
with a copy to:
Xxxxxxx X. Xxxxx Realty Companies
0000 Xxxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
9.9. Severability.
------------
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision, and all
other provisions shall remain in full force and effect. This Agreement contains
the entire agreement among the parties as to the rights granted and the
obligations assumed in this Agreement. This Agreement may not be amended or
modified except by a writing signed by the party against whom enforcement is
sought.
9.10. Governing Law; Consent to Jurisdiction and Venue.
------------------------------------------------
This Agreement, and any Loan Document which does not itself expressly
identify the Law that is to apply to it, shall be governed by the Laws of the
Commonwealth of Virginia. Borrower agrees that any controversy arising under or
in relation to this Agreement or any other Loan Document which does not
expressly identify the Law that is to apply to it, shall be litigated
exclusively in the courts of the Commonwealth of Virginia. The state and
federal courts and authorities with jurisdiction in the Commonwealth of Virginia
shall have exclusive jurisdiction over all controversies which shall arise under
or in relation to this Agreement. Borrower irrevocably consents to service,
jurisdiction, and venue of such courts for any such litigation and waives any
other venue to which it might be entitled by virtue of domicile, habitual
residence or otherwise.
9.11. Prior Understanding.
-------------------
This Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto and thereto relating to the transactions provided for herein and therein,
including any prior confidentiality agreements and commitments.
9.12. Duration; Survival.
------------------
All representations and warranties of Borrower contained herein or
made in connection herewith shall survive the funding of the initial advance
hereunder and shall not be waived by the execution and delivery of this
Agreement, any investigation by Lender, the funding of any Borrowing Tranche, or
payment in full of the Loan. All covenants and
-56-
agreements of Borrower contained herein shall continue in full force and effect
from and after the date hereof so long as Borrower may borrow hereunder and
until termination of the Commitment and payment in full of the Loan. All
covenants and agreements of Borrower contained herein relating to the payment of
principal, interest, premiums, additional compensation or expenses and
indemnification, including those set forth in the Revolving Credit Note, shall
survive payment in full of the Loan and termination of the Commitments.
9.13. Disclosure of Information.
-------------------------
Lender may furnish information regarding Borrower or the Collateral
Pool Properties to third parties with an existing or prospective interest in the
servicing, enforcement, evaluation, performance, purchase or securitization of
the Loan, including but not limited to trustees, master servicers, special
servicers, rating agencies, and organizations maintaining databases on the
underwriting and performance of multifamily mortgage loans. Borrower
irrevocably waives any and all rights it may have under applicable law to
prohibit such disclosure, including but not limited to any right of privacy.
9.14. Exceptions.
----------
The representations, warranties and covenants contained herein shall
be independent of each other, and no exception to any representation, warranty
or covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.
9.15. Relationship of Parties; No Third Parties Benefited.
---------------------------------------------------
The relationship between Lender and Borrower shall be solely that of
creditor and debtor, respectively, and nothing contained in this Agreement shall
create any other relationship between Lender and Borrower. No creditor of any
party to this Agreement and no other person shall be a third party beneficiary
of this Agreement or any other Loan Document. Without limiting the generality
of the preceding sentence, (1) any agreement, including any Servicing Agreement,
between Lender and Servicer for loss sharing or interim advancement of funds
shall constitute a contractual obligation of such Servicer that is independent
of the obligation of Borrower for the payment of the Loan, (2) Borrower shall
not be a third party beneficiary of any Servicing Agreement, and (3) no payment
by Servicer under any such agreement will reduce the outstanding principal
amount of the Loan or any interest accrued thereon.
9.16. Authority to File Notices.
-------------------------
Borrower irrevocably appoints Lender as its attorney-in-fact, with
full power of substitution, to file for record, at Borrower's cost and expense
and in Borrower's name, any notices that Lender considers reasonably necessary
or desirable to protect the Collateral.
9.17. WAIVER OF TRIAL BY JURY.
-----------------------
-57-
BORROWER AND LENDER EACH (A) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS AGREEMENT OR THE
RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF RIGHT
BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
____________________________________________
Initials of the authorized representative of
Xxxxx Property Holdings XxXxxxx Court L.L.C.
____________________________________________
Initials of the authorized representative of
Xxxxx Property Holdings Lincoln Towers L.L.C.
9.18. Interpretation.
--------------
Whenever the context requires, all words used in the singular will be
construed to have been used in the plural, and vice versa, and each gender will
include any other gender. The captions of the articles, sections and schedules
of this Agreement are for convenience only and do not define or limit any terms
or provisions. In the event of a conflict between the terms of the other Loan
Documents and the terms of this Agreement, the terms of this Agreement shall
control.
9.19. Brokerage Fee.
-------------
Borrower represents to Lender that no broker or other Person is
entitled to a brokerage fee or commission as a result of Borrower's actions or
undertakings in connection with the financing contemplated hereunder and agrees
to hold Lender harmless from all claims for brokerage commissions which may be
made as a result of such actions or undertakings, if any.
9.20. Advertising.
-----------
Lender may include the name of Borrower, the name and location of any
Collateral Pool Property, the Commitment and the number of apartment units
contained in any Collateral Pool Property on Lender's client list and in any
typical advertisement.
9.21. Time of Essence.
---------------
Time is of the essence with respect to each obligation of Borrower
and Lender hereunder.
-58-
9.22. Counterparts.
------------
This Agreement may be executed by different parties hereto on any
number of separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together constitute one
and the same instrument.
9.23. Successor Servicer.
------------------
Contemporaneously with the transfer of the Revolving Credit Note,
this Agreement and the other Loan Documents from Columbia to Xxxxxxx Mac,
Xxxxxxx Mac shall engage Columbia as Servicer. If at any time during the term of
this Agreement, Columbia desires to sell, transfer, assign or otherwise convey
its servicing portfolio, including its rights to act as Servicer under this
Agreement to any third party, such successor Servicer shall be (i) acceptable to
Lender in its sole discretion and (ii) acceptable to Borrower, provided that
Borrower shall not unreasonably withhold, condition or delay its approval of
such successor Servicer. If for any reason other than those specified in the
foregoing sentence, Columbia shall cease to act as Servicer hereunder, including
but not limited to Lender's termination of Columbia as Servicer under the
Servicing Agreement, Borrower shall have the right to select in its sole
discretion a successor Servicer, but only from a list to be provided by Lender.
Lender shall use commercially reasonable efforts to ensure that such list
includes up to three (3) potential servicers acceptable to Lender in its sole
discretion, provided however, that Lender shall not be in default hereunder in
the event Lender provides a list consisting of less than three (3) servicers.
[Signatures Commence on the Following Page]
-59-
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above
written.
BORROWER:
WITNESS: XXXXX PROPERTY HOLDINGS XxXXXXX COURT L.L.C., a Delaware
limited liability company
By: Xxxxxxx X. Xxxxx Residential Realty
L.P., a Delaware limited partnership, its
sole member
----------------------
By: Xxxxxxx X. Xxxxx Residential
Seal Realty, Inc., a Maryland
corporation, its general partner
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
BORROWER:
WITNESS: XXXXX PROPERTY HOLDINGS
LINCOLN TOWERS L.L.C., a Virginia
limited liability company
By: Xxxxxxx X. Xxxxx Residential Realty
L.P., a Delaware limited partnership, its
sole member
----------------------
Seal By: Xxxxxxx X. Xxxxx Residential
Realty, Inc., a Maryland
corporation, its general partner
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
[Signatures Continue on the Following Page]
-60-
LENDER: COLUMBIA NATIONAL REAL ESTATE
FINANCE, INC., a Maryland corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
-61-
Guarantor hereby executes this Agreement for the sole purpose of agreeing to be
bound by the provisions of Section 2.4, 2.10 and 2.15 of this Agreement.
GUARANTOR: XXXXXXX X. XXXXX RESIDENTIAL
REALTY L.P. , a Delaware limited partnership
By: Xxxxxxx X. Xxxxx Residential Realty, Inc.,
a Maryland corporation, its general partner
By:
------------------------------------------
Name:
Title:
SCHEDULE 1.1(A)
LIST OF COLLATERAL POOL PROPERTIES
AND ASSOCIATED MARKET VALUES
Property Market Value
-------- ------------
XxXxxxx Court, Chicago, Illinois $95,000,000.00
Lincoln Towers, Arlington, Virginia $97,650,000.00
SCHEDULE 1.1(B)
LIST OF
COLLATERAL POOL PROPERTY DOCUMENTS
1. Mortgage/Deed of Trust/Deed to Secure Debt
2. UCC-1 Financing Statements
3. FIRPTA Certificate
4. Limited Guaranty
5. Collateral Agreements (if any)
6. O & M Programs (if any)
7. Title insurance policy acceptable to Lender, in an amount
not less than sixty five percent (65%) of the Market Value
of such real property, together with all endorsements
required by Lender.
SCHEDULE 1.1(C)
---------------
FORM OF GUARANTY
[BORROWER MAY, SUBJECT TO LENDER'S CONSENT, REVISE THIS FORM OF LOAN REQUEST TO
PROVIDE FOR MULTIPLE BORROWING TRANCHES UNDER A SINGLE LOAN REQUEST FORM]
SCHEDULE 2.5
FORM OF
LOAN REQUEST
______________, 20__
[Lender's Name and Address]
Attention:
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of , 200_,
as amended (the "Credit Agreement") by and among _______________________
----------------
(collectively, "Borrower"), and ____________________, a _______________________
--------
("Lender"). Unless otherwise defined herein, terms defined in the Credit
------
Agreement are used herein with the same meanings.
I, , the _________ of Borrower, a __________________________, do
hereby certify on behalf of Borrower as of the date hereof, as follows:
Borrower is entitled to and hereby requests Lender to make an advance
under the Credit Agreement in the amount of $__________ (which must be greater
than or equal to Three Million and NO/100 Dollars ($3,000,000.00)). Funds
should be delivered to Borrower by wire to the following account:
Bank Name and Location: ____________________________________________
ABA Number: ________________________________________________________
Account Name: ______________________________________________________
Account Number: ____________________________________________________
Further Credit Instructions: _______________________________________
Attention: _________________________________________________________
1. The requested date of the advance (the "Borrowing Date") is
--------------
______________.
2. The Borrowing Tranche shall bear interest at (check one):
_____ Prime Rate
_____ Base Rate
3. The Interest Period (if the Base Rate is selected) applicable to
the advance is (check one):
_____ thirty (30) days
_____ sixty (60) days
_____ ninety (90) days
_____ one hundred and twenty (120) days
_____ one hundred and eighty (180) days
_____ two hundred and seventy (270) days
_____ three hundred and sixty (360) days)
4. Borrower will (check one):
_____ Pay all interest due and payable under the requested
Borrowing Tranche in monthly installments pursuant to the
terms of the Credit Agreement.
_____ Prepay all interest for such Borrowing Tranche as of the
Borrowing Date.
5. If applicable, the Base Rate for the Borrowing Tranche requested
hereunder shall be ___________ (_____%) consisting of a LIBO Rate of __________
percent (___ %) and a Margin of ________ (__%).
6. Following the disbursement of the funds comprising the Borrowing
Tranche requested herein, the total number of Borrowing Tranches outstanding
will be ________(__), which is not more than fifteen (15).
7. The maturity date of the Interest Period of the Borrowing Tranche
requested herein is (choose and complete one of the following):
[____________, 20__ (which is the last day of the Interest
Period, in the event that such date is a Business Day)
______________, 20__ (which is the Business Day following the
last day of the Interest Period, in the event that such date is
not a Business Day)].
8. This request for an advance is made pursuant to and in accordance
with the provisions of the Credit Agreement. The proceeds of such advance are
to be used for a permitted purpose under Section 2.8 of the Credit Agreement.
9. The principal amount outstanding under the Credit Agreement on the
date hereof, prior to any advance in response to this request, is
$_____________.
10. To the best of Borrower's knowledge and belief following diligent
inquiry, the advance of the funds requested herein will not cause Borrower to be
in non-compliance with the Sublimits set forth in Section 2.1.1 of the Credit
Agreement.
11. To the best of Borrower's knowledge and belief following diligent
inquiry, the computations set forth in Paragraphs 19 through 22 as certified by
Servicer are accurate.
12. All of the covenants and all of the representations and
warranties contained in the Credit Agreement and the other Loan Documents, and
all of the other terms, covenants and conditions contained in the Loan Documents
continue to be materially true and correct and continue to be complied with on
the date hereof, and will continue to be materially true and correct and will
continue to be complied with as of the date of, and subsequent to, the requested
advance.
13. No Potential Default or Event of Default has occurred or is
continuing under the Loan Documents.
14. There has been no Material Adverse Change to any Collateral Pool
Property, Borrower [or, in the event the Loan is guaranteed pursuant to the
Guaranty, Guarantor] since the date of the last Loan Request that will cause
Borrower to be in violation of the Sublimits after the funding of the Borrowing
Tranche requested herein or will render the Base Rate requested herein
inaccurate.
15. All of the other terms and conditions set forth in the Credit
Agreement and the other Loan Documents pertaining to the Loan have been
satisfied.
16. All items that Borrower is required to furnish to Lender pursuant
to the Credit Agreement accompany this request and are true and complete in all
respects.
17. The undersigned is an Authorized Officer of Borrower.
18. Notice of this Loan Request shall be deemed received by Lender
when (i) sent by facsimile to (000) 000-0000 and (ii) verbally confirmed by
telephone call to either (when called in the following order of priority): (1)
Xxxxx Xxxxxxx ((000) 000-0000), (2) Xxxxx Xxxxxx ((000) 000-0000) or (3) Xxxx
Xxxxxxxx ((000)-000-0000), or such other names and numbers as Lender may specify
upon prior written notice to Borrower.
[The Loan Request continues on the following page]
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
______ day of ___________, ____.
BORROWER:
a
---------------------------------------------
By:
------------------------------------------
Name:
Title:
[The Loan Request continues on the following page]
[In the event that Guarantor has elected to guarantee the Loan]:
G1. The Guarantor's net worth as of the date of the Loan Request is
(check one):
_____ greater than or equal to Four Hundred and Fifty Million
and NO/100 Dollars ($450,000,000.00).
_____ less than Four Hundred and Fifty Million and NO/100
Dollars ($450,000,000.00).
G2. Since [the date of the last Loan Request or date of the execution
of Guaranty (whichever date occurred recently] Guarantor has (check one):
_____ not experienced a Material Adverse Change.
_____ experienced a Material Advance Change.
G3. No Potential Default or Event of Default has occurred or is
continuing under the Loan Documents.
Guarantor hereby certifies to the statements set forth above in paragraphs
1 through 18 and G1 through G3, and [guaranties/reaffirms its existing
guarantee of] Borrower's obligations under the Credit Agreement, all in
accordance with the Guaranty and the Credit Agreement.
GUARANTOR:
XXXXXXX X. XXXXX RESIDENTIAL
REALTY L.P. , a Delaware limited partnership
By: Xxxxxxx X. Xxxxx Residential Realty, Inc.,
a Maryland corporation, its general partner
By:________________________________
Name:
Title:
Dated: ____________________________
19. The current loan to value ratio is ___________(__%) (the "Loan to
-------
Value Ratio") of the Collateral Pool Value, which is less than or equal to
-----------
sixty-five percent (65%), determined as follows:
A. The current Loan balance $_____________
B. The current Collateral Pool Value $____________
C. Item B divided by Item A and _____________%
then multiplied by 100% equals
the Loan to Value Ratio
20. Following the disbursement of the funds comprising the Borrowing
Tranche requested herein, the Loan to Value Ratio will equal
_________________(__%), which is less than or equal to sixty-five percent (65%),
determined as follows:
A. The Loan balance upon $_____________
disbursement of the funds comprising the Borrowing
Tranche requested herein
B. The current Collateral Pool Value $____________
C. Item B divided by Item A and ____________%
then multiplied by 100% equals
the Loan to Value Ratio
21. The current Facility Debt Service Coverage Ratio is ______ : 1.00,
which is not less than 1.35 : 1.00, determined as follows:
$_____________
A. Net Operating Income of the
Collateral Pool Properties
determined by Lender
$_____________
B. Annualized debt service on the
Loan
____________%
C. Item A divided by Item B equals
C. the Facility Debt Service Coverage
Ratio
22. Following the disbursement of the funds comprising the Borrowing
Tranche requested herein, the Facility Debt Service Coverage Ratio will be
______ : 1.00, which is more than 1.35 : 1.00, determined as follows:
$_____________
A. Net Operating Income of the
Collateral Pool Properties as
determined by Lender
$_____________
B. Annualized debt service on the
Loan
____________%
Item A divided by Item B equals
the Facility Debt Service Coverage Ratio
Servicer hereby certifies to the accuracy of each of the computations set
forth above in paragraphs 19 through 22, and to the best of its knowledge
and belief, Servicer hereby certifies that all statements made by Borrower
and, if applicable, Guarantor hereunder are true and accurate.
SERVICER:
a _______________________________________
By: ______________________________________
Name:
Title:
Dated: ___________________________________
SCHEDULE 3.2
MARGIN TABLE
Facility Debt Service Coverage Ratio MARGIN
-------------------------------------------------------------------------------
Greater than or equal to 1.35 : 1.00 but less than 1.61%
1.50 : 1.00
-------------------------------------------------------------------------------
Greater than or equal to 1.50 : 1.00 but less than 1.20%
1.65 : 1.00
-------------------------------------------------------------------------------
Greater than or equal to 1.65 : 1.00 but less than 1.06%
1.80 : 1.00
-------------------------------------------------------------------------------
Greater than or equal to 1.80 : 1.00 but less than .91%
2.0 : 1.00
-------------------------------------------------------------------------------
Greater than or equal to 2.00 : 1.00 but less than .78%
2.25 : 1.00
-------------------------------------------------------------------------------
Greater than or equal to 2.25 : 1.00 but less than .66%
2.75 : 1.00
-------------------------------------------------------------------------------
Greater than or equal to 2.75 : 1.00 .63%
-------------------------------------------------------------------------------
SCHEDULE 3.2A
MARGIN TABLE IN THE EVENT THE LOAN
IS GUARANTEED BY GUARANTOR
Facility Debt Service Coverage Margin in the event Margin in the event 10% Margin in the event 20%
Ratio 5% of the Loan is of the Loan is of the Loan is
Guaranteed Guaranteed Guaranteed
----------------------------------------------------------------------------------------------------------------------
Greater than or equal to 1.35 : 1.00 but 1.51% 1.42% 1.22%
less than 1.50 : 1.00
----------------------------------------------------------------------------------------------------------------------
Greater than or equal to 1.50 : 1.00 but 1.14% 1.07% .94%
less than 1.65 : 1.00
----------------------------------------------------------------------------------------------------------------------
Greater than or equal to 1.65 : 1.00 but 1.01% .96% .85%
less than 1.80 : 1.00
----------------------------------------------------------------------------------------------------------------------
Greater than or equal to 1.80 : 1.00 but .88% .84% .77%
less than 2.00 : 1.00
----------------------------------------------------------------------------------------------------------------------
Greater than or equal to 2.00 : 1.00 but .76% .73% .69%
less than 2.25 : 1.00
----------------------------------------------------------------------------------------------------------------------
Greater than or equal to 2.25 : 1.00 but .65% .64% .62%
less than 2.75 : 1.00
----------------------------------------------------------------------------------------------------------------------
Greater than or equal to 2.75 : 1.00 .63% .62% .61%
----------------------------------------------------------------------------------------------------------------------
[BORROWER MAY, SUBJECT TO LENDER'S CONSENT, REVISE THIS FORM OF RENEWAL REQUEST
TO PROVIDE FOR MULTIPLE BORROWING TRANCHES UNDER A SINGLE RENEWAL REQUEST FORM]
SCHEDULE 3.3.3
RENEWAL REQUEST
______________, 20__
[Lender's Name and Address]
Attention:
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of , 200_,
as amended (the "Credit Agreement") by and among _______________________
----------------
(collectively, "Borrower"), and ____________________, a _______________________
--------
("Lender"). Unless otherwise defined herein, terms defined in the Credit
------
Agreement are used herein with the same meanings.
I, , the _________ of Borrower, a __________________________, do
hereby certify on behalf of Borrower as of the date hereof, as follows:
_____ Borrower hereby requests Lender to renew the Borrowing Tranche
in the amount of ______________, whose Interest Period is expiring on
___________, ____.
or
--
_____ Borrower hereby requests Lender to convert $_______________- of
the Borrowing Tranche currently bearing interest at the Prime Rate into a
Borrowing Tranche bearing interest at the Base Rate.
or
--
_____ Borrower hereby requests Lender to combine two (2) or more
Borrowing Tranches pursuant to the provisions of the Credit Agreement into a
single Borrowing Tranche.
1. The Borrowing Tranche shall bear interest at (check one):
_____ Prime Rate
_____ Base Rate
2. The Interest Period (if the Base Rate is selected) applicable to
the renewed Borrowing Tranche is (check one):
_____ thirty (30) days
_____ sixty (60) days
_____ ninety (90) days
_____ one hundred and twenty (120) days
_____ one hundred and eighty (180) days
_____ two hundred and seventy (270) days
_____ three hundred and sixty (360) days)
3. Borrower will (check one):
_____ Pay all interest due and payable under the requested
Borrowing Tranche in monthly installments pursuant to the
terms of the Credit Agreement.
_____ Prepay all interest for such Borrowing Tranche as of the
Borrowing Date.
4. The principal amount outstanding under the Credit Agreement on the
date hereof, prior to any advance in response to this request, is
$_____________.
5. If applicable, the Base Rate for the Borrowing Tranche renewed
hereunder shall be ___________ (_____%) consisting of a LIBO Rate of ___________
percent (____ %) and a Margin of ________ (____%).
6. The maturity date of the Interest Period of the Borrowing Tranche
requested herein is (choose and complete one of the following):
____________, 20__ (which is the last day of the Interest Period,
in the event that such date is a Business Day)
______________, 20__ (which is the Business Day following the
last day of the Interest Period, in the event that such date is
not a Business Day)].
7. To the best of Borrower's knowledge and belief following diligent
inquiry, the computations set forth in Paragraphs 12 through 14 as certified by
Servicer are accurate.
8. No Potential Default or Event of Default has occurred or is
continuing under the Loan Documents.
9. All of the other terms and conditions set forth in the Credit
Agreement and the other Loan Documents pertaining to the Loan have been
satisfied.
10. The undersigned is an Authorized Officer of Borrower.
11. Notice of this Renewal Request shall be deemed received by Lender
when (i) sent by facsimile to (000) 000-0000 and (ii) verbally confirmed by
telephone call to either (when called in the following order of priority): (1)
Xxxxx Xxxxxxx ((000) 000-0000), (2) Xxxxx Xxxxxx ((000) 000-0000) or (3) Xxxx
Xxxxxxxx ((000)-000-0000), or such other names and numbers as Lender may specify
upon prior written notice to Borrower.
[The Renewal Request continues on the following page]
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
______ day of ___________, ____.
BORROWER:
a _________________________________________
By: _______________________________________
Name:
Title:
[The Renewal Request continues on the following page]
[In the event that Guarantor has elected to guarantee the Loan]:
Guarantor hereby irrevocably [guaranties/reaffirms its existing guarantee
of] Borrower's obligations under the Credit Agreement, all in accordance
with the Guaranty and Credit Agreement.
GUARANTOR:
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P. , a
Delaware limited partnership
By: Xxxxxxx X. Xxxxx Residential Realty, Inc.,
a Maryland corporation, its general partner
By: _______________________________
Name:
Title:
Dated: ____________________________
[The Renewal Request continues on the following page]
12. The current loan to value ratio is ___________(__%) (the "Loan to
-------
Value Ratio") of the Collateral Pool Value, which is less than or equal to
-----------
sixty-five percent (65%), determined as follows:
A. The current Loan balance $_____________
B. The current Collateral Pool Value $____________
C. Item B divided by Item A and then ____________%
multiplied by 100% equals the Loan to
Value Ratio
13. The current Facility Debt Service Coverage Ratio is
______ :1.00, which is not less than 1.35 : 1.00, determined as follows:
A. Net Operating Income of the Collateral $_____________
Pool Properties determined by Lender
B. Annualized debt service on the Loan $_____________
C. Item A divided by Item B equals the ____________%
Facility Debt Service Coverage Ratio
14. Following the renewal of the Borrowing Tranche for the Interest
Period requested herein, the Facility Debt Service Coverage Ratio will be
______: 1.00, which is more than 1.35 : 1.00, determined as follows:
A. Net Operating Income of the Collateral $_____________
Pool Properties as determined by Lender
B. Annualized debt service on the Loan $_____________
C. Item A divided by Item B equals the ____________%
Facility Debt Service Coverage Ratio
Servicer hereby certifies to the accuracy of each of the computations set
forth above in paragraphs 12 through 14, and to the best of its knowledge
and belief, after diligent inquiry, Servicer hereby certifies that all
statements made by Borrower and, if applicable, Guarantor hereunder are
true and accurate.
SERVICER:
a _______________________________________
By: _____________________________________
Name:
Title:
Dated: ___________________________________
SCHEDULE 4.4
PREPAYMENT FEE
1. Definitions - As used in this Schedule 4.4, the words and terms
-----------
set forth below shall have the meanings set forth below. Capitalized terms used
in this Schedule 4.4 and not otherwise defined shall have the meanings set forth
in the Credit Agreement.
(a) Interest Period Balance: shall mean the number of days remaining in
the Interest Period for the applicable Borrowing Tranche as of the
Prepayment Date.
(b) LIBO Rate: shall mean that portion of the Base Rate for the applicable
Borrowing Tranche attributable to the LIBO Rate for the applicable
Borrowing Tranche, expressed as a decimal calculated to four (4)
digits.
(c) Prepayment Date: shall mean (i) in the case of a prepayment under
Section 4.3.1 of the Credit Agreement, the date on which the
prepayment is made or (ii) in any other case in which a Prepayment Fee
is payable pursuant to the terms of the Credit Agreement, the date on
which Lender accelerates the unpaid principal balance of the Revolving
Credit Note.
(d) Reinvestment Rate: shall mean, as of the date that is five (5)
Business Days prior to the Prepayment Date, the LIBO Rate for the
LIBOR contract which matures as close as possible, but not prior to,
the maturity date of the Interest Period for the applicable Borrowing
Tranche, expressed as a decimal calculated to four (4) digits.
2. Determination of the Prepayment Fee - The Prepayment Fee payable
-----------------------------------
under Section 4.4 of the Credit Agreement applicable to any particular Borrowing
Tranche shall equal the amount obtained by:
(a) multiplying:
(i) the amount of principal being prepaid
by
(ii) the excess (if a positive number) of the LIBO Rate over the
Reinvestment Rate;
(b) then dividing the figure obtained in (a) above by three
hundred and sixty (360) days; and
(c) then multiplying the figure obtained in (b) above by the Interest
Period Balance.
Notwithstanding the foregoing, if the Reinvestment Rate is greater than or equal
to the LIBO Rate the Prepayment Fee shall equal zero.
SCHEDULE 5.1.11
CONSENTS AND APPROVALS
SCHEDULE 5.1.18
LIST OF EMPLOYEES
