SPECIAL RIDER TO MULTIFAMILY INSTRUMENT
THIS SPECIAL RIDER TO MULTIFAMILY INSTRUMENT (this "Special Rider") is made
as of the 1st day of August, 1996, and is incorporated into and shall be deemed
to amend and supplement the Multifamily Mortgage, Assignment of Rents and
Security Agreement as of even date herewith (the "Instrument"), given by the
undersigned, OTC APARTMENTS LIMITED PARTNERSHIP, a Florida limited partnership
(the "Borrower") to THE BANK OF NEW YORK, a New York banking corporation, not in
its individual or corporate capacity but solely as Trustee under that certain
Amended and Restated Indenture dated as of August 1, 1996 with Escambia County
Housing Finance Authority (sometimes herein, the "Trustee"), together with its
successors, assigns and transferees (the "Lender"), and covering the property
described in the Instrument and located in Escambia County, Florida (the
"Property"), as amended by that certain Rider to Multifamily Instrument as of
even date herewith (collectively, with this Special Rider and any other riders
to the Instrument given by Borrower to Lender and covering the Property, the
"Multifamily Instrument"). The Multifamily Instrument secures, among other
things, the Note (as defined in the Instrument), and any future addenda,
allonges and amendments to the Note, and all obligations owed by Borrower for
the payment of $6,000,000.00 in principal, interest thereon, and other amounts
as evidenced by and set forth in the Note (the "Mortgage Loan").
The covenants and agreements of this Special Rider, and the covenants and
agreements of any other riders to the Instrument, shall be incorporated into and
shall amend and supplement the covenants and agreements of the Instrument as if
this Special Rider and the other riders were a part of the Instrument, and all
references to the Instrument in the Loan Documents shall mean the Instrument as
so amended and supplemented. Any conflict between the provisions of the
Instrument, as amended by the Rider (as defined in the Instrument) and this
Special Rider shall be resolved in favor of this Special Rider.
ADDITIONAL COVENANTS. In addition to the covenants and agreements made in
the Instrument and the Rider, Borrower and Lender further covenant and agree as
follows:
A. REGULATORY AGREEMENT. Lender acknowledges and agrees that the operation
of the Property will be subject to that certain Land Use Restriction Agreement
dated as of October 1, 1985 by and among ESCAMBIA COUNTY HOUSING FINANCING
AUTHORITY ("Issuer"), Harbor Federal Savings and Loan Association (the "Letter
of Credit Bank"), Xxxxxx Realty Company, Inc. (the "Prior Borrower") and Xxxxxxx
Xxxxx Trust Company, N.A. (the "Prior Trustee"), as amended by that certain
[Amendment to Land Use Restriction Agreement], dated as of August 1, 1996 among
the Issuer, the Letter of Credit Bank, the Trustee and the Borrower
(collectively, the "Regulatory Agreement") regulating or restricting the use or
manner of operation of the Property.
B. CROSS DEFAULT. The failure by Borrower to pay when due any amount
payable under the Note, the Multifamily Instrument or any other Loan Document
or the failure (beyond applicable cure periods, if any) by Borrower to
perform or observe any covenant or obligation of Borrower contained in (a)
the Note, the Multifamily Instrument or any other Loan Document, (b) any of
the documentation relating to the Bonds, including, without limitation, the
Financing Agreement, (c) any subordinate financing, (d) the Regulatory
Agreement, (e) that certain Master Reimbursement Agreement as of July 1, 1996
by Borrower and Xxxxxx Xxx, as the same may be amended, supplemented,
modified or restated from time to time (the "Master Reimbursement
Agreement"), and (f) any form of public, quasi-public, public/private or
private debt and/or equity infusion, grant, subsidy, tax relief or abatement
plan, program or other form of assistance, shall, at Lender's option, in its
discretion,
constitute a default under the Note, the Multifamily Instrument and the other
Loan Documents. Any such default shall: (i) entitle Lender, at its option, in
its discretion, to invoke any of the remedies set forth in Paragraph 27 of the
Instrument or as otherwise afforded by law or equity; and (ii) at Xxxxxx Mae's
option, in its discretion, constitute a default under and in accordance with the
Master Reimbursement Agreement. Notwithstanding anything herein to the
contrary, the provisions of clause (e) and/or clause (ii) above of this
Paragraph B shall become null and void and of no further force or effect upon:
(i) a transfer of the Property and assumption of the Multifamily Instrument
pursuant to Section 4.5 of the Master Reimbursement Agreement; and (ii) written
notice from Xxxxxx Mae to the Borrower and the Permitted Transferee (as defined
in the Master Reimbursement Agreement) confirming that such provisions are of no
further force or effect.
C. LEASES. All leases of the residential housing units in the Property
must (a) be legally valid, binding and enforceable obligations of the tenants,
(b) comply with all applicable laws and (c) satisfy the standards of the Xxxxxx
Xxx Delegated Underwriting and Servicing Guide in its present form as of the
date of any such lease.
D. MORTGAGE EXPENSES. Should Lender (or "Servicer", as such term is
defined in the Master Reimbursement Agreement) pay any Mortgage Expenses (as
hereinafter defined), Borrower shall on demand immediately reimburse Lender (or
Lender on behalf of Servicer, as applicable) for the full amount of such
Mortgage Expenses paid by Lender (or Servicer, as applicable). For purposes of
this paragraph D, "Mortgage Expenses" shall mean the cost of real estate taxes,
appraisal fees, insurance fees, legal fees and any other expenses which may be
required to maintain the priority of, or to protect or enforce Lender's rights
in, the Multifamily Instrument, including (i) fees and expenses of the Servicer
which are not paid by Borrower, (ii) fees and expenses paid to maintain in full
force and effect or realize the benefit of any insurance with respect to the
Multifamily Instrument and (iii) any fees or expenses advanced on behalf of
Borrower by Xxxxxx Mae to the Trustee or the Issuer.
E. CHARGES; LIENS. Uniform Covenant 4 of the Instrument ("Charges; Liens")
is amended to add the following provisions at the end thereof:
Provided that Borrower is not in breach of any of its covenants,
obligations or agreements under this Instrument and no event of default has
occurred and is continuing under the Note or any other Loan Document,
Borrower shall not be required to pay or discharge any obligation imposed
upon Borrower by this paragraph 4 so long as Borrower has given written
notice of the same to Lender and is in good faith and at its sole cost and
expense diligently contesting the same or the validity thereof by
appropriate legal proceedings, which proceedings must operate to prevent
the collection thereof or realization thereon, the sale or forfeiture of
the Property or any portion thereof to satisfy the same; provided, however,
that during such contest (i) Borrower shall, at the option of Lender,
provide security reasonably satisfactory to Lender and sufficient in
Lender's reasonable judgment to cover the amount of the contested
obligations, with interest on such obligations (to the extent interest
would be due the obligee) for that period that such proceedings may
reasonably be expected to take, and of any additional interest, charge,
fine, penalty, fee or expense arising from or incurred as a result of such
contest, (ii) the title company insuring the Property agrees to insure over
any potential lien that may result from such contest, and (iii) if at any
time the payment of any obligation imposed upon Borrower by this paragraph
4 shall become necessary to prevent (a) the delivery of a tax deed
conveying the Property or any portion thereof, or (b) the sale of the tax
lien therefor because of non-payment, or (c) the imposition of any penalty,
fine, charge, fee, cost or expense on Lender, then Borrower shall pay the
same in
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sufficient time to prevent the occurrence of any of the foregoing.
F. CONDEMNATION PROCEEDS; RESTORATION OF PROPERTY. Uniform Covenant 11 of
the Instrument ("Condemnation") is amended to add the following provision at the
end thereof:
Lender shall permit Borrower to apply any such awards, payments,
proceeds or damages, after deduction of Lender's expenses incurred in the
collection of such amounts, to the payment of repairs to the Property if
all of the following conditions are met: (i) Borrower is not in breach or
default of any provision of the Instrument, the Note or any other Loan
Document; (ii) Lender determines that there will be sufficient funds to
restore and repair the Property to a condition approved by Lender; (iii)
Lender determines that the rental income of the Property, after restoration
and repair of the Property to a condition approved by Lender, will be
sufficient to meet all operating costs and other expenses, payments for
reserves and loan repayment obligations relating to the Property; (iv)
Lender determines that restoration and repair of the Property to a
condition approved by Lender will be completed prior to the earlier of
either (1) the maturity date of the Note or (2) within one year of the date
of the loss or casualty to the Property; and (v) Lender determines that
upon the restoration and repair of the Property there will not have been a
material diminution in the value of the Property since the date immediately
preceding the condemnation.
G. LEASES. Uniform Covenant 16 of the Instrument ("Leases of the
Property") is modified by adding the phase "entered into hereafter" after the
words "All leases of the Property" in the third (3rd) sentence of such Uniform
Covenant 16.
H. MODIFICATION OF SINGLE ASSET REQUIREMENTS.
Paragraph J of the Rider is amended to read as follows:
J. Single Purpose Entity.
Borrower covenants and agrees that Borrower shall at all times
during the term of this Instrument comply with the covenants set forth
in Sections 2.2(i) and 2.3(k) of the Master Reimbursement Agreement
and that Borrower shall not violate the provisions of subsections
2.3(a)(iii) or 2.3(a)(iv) of the Master Reimbursement Agreement.
X. XXXXX OF INTEREST IN CERTAIN FUNDS. Without limiting the generality of
the first (1st) sentence of Uniform Covenant 15 of the Instrument and pursuant
to the Uniform Commercial Code, Borrower hereby grants, pledges and assigns to
Lender all of Borrower's right, title and interest in and to all funds and
accounts and investments of funds and accounts now or hereafter held by the
Trustee pursuant to the Indenture, including any and all loan funds, escrow
funds, revenue funds, debt service funds, reserve funds, redemption funds and
other funds and securities and other instruments comprising investments of any
of the foregoing and interest and other income derived from any of the
foregoing, all to be held by Lender in trust in accordance with the terms of the
Indenture.
J. NOTICES. Uniform Covenant 20 of the Instrument is amended to read as
follows:
All notices, directions, certificates or other communications
hereunder shall be given by certified or registered mail, return receipt
requested, OR by overnight courier addressed to the appropriate notice
address set forth below. Any of the parties hereto may, by such notice
described above, designate any further or different address to which
subsequent notices, certificates or other communications shall be sent
without any requirement of execution of any amendment to this Instrument.
Any such notice, certificate or communication shall be deemed to have
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been given as of the date of actual delivery or the date of failure to
deliver by reason of refusal to accept delivery or changed address of which
no notice was given pursuant to this paragraph 20. Unless otherwise
directed by Xxxxxx Mae, all notices from Borrower pursuant to this
Instrument shall also be given to the Servicer in accordance with this
paragraph 20. The notice addresses are as follows:
(a) if to Borrower:
OTC Apartments Limited Partnership
0000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Vice Chairman
(b) if to Xxxxxx Xxx:
if by mail or overnight courier:
Xxxxxx Mae
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Senior Vice President
Multifamily Activities
if by messenger:
Xxxxxx Xxx
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Senior Vice President
Multifamily Activities
in each case, with copies to:
Xxxxxx Mae
Southwest Regional Office
Two Galleria Tower
00000 Xxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Regional Vice President
Multifamily Activities
and to:
Xxxxxx Mae
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Multifamily Mortgage Operations
Manager, Multifamily Deliveries
(c) if to Servicer:
GMAC Commercial Mortgage Corporation
000 Xxxxxxx Xxxx
Xxxxxxx, XX. 00000-0000
Attn: Xxxxx Xxxxx
K. TRANSFERS OF THE PROPERTY OR INTERESTS IN BORROWER.
(a) DEFINITIONS
For purposes of this Instrument, the following terms have the respective
meanings set forth below:
(i) The term "TRANSFER" means (A) a sale, assignment, pledge,
transfer or other disposition (whether voluntary or by operation
of law) of, or the granting or creating of a lien, encumbrance or
security interest in, any of Borrower's estate, rights, title or
interest in the Property, or any portion thereof, or (B) a sale,
assignment, pledge, transfer or other disposition of any interest
in Borrower, its General Partner, AIMCO
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REIT or in AIMCO OP, or (C) the issuance or other creation of new
ownership interests in Borrower, its General Partner, AIMCO REIT
or in AIMCO OP, or (D) a merger or consolidation of Borrower,
its General Partner, AIMCO REIT or AIMCO OP, or (E) the
reconstitution of Borrower, its General Partner, AIMCO REIT or
AIMCO OP from one type of entity to another type of entity.
(ii) A "CHANGE OF CONTROL" shall mean the earliest to occur of: (A)
the date an Acquiring Person becomes (by acquisition,
consolidation, merger or otherwise), directly or indirectly, the
beneficial owner of more than forty percent (40%) of the total
Voting Equity Capital of AIMCO REIT then outstanding, or (B) the
date on which AIMCO REIT shall cease to hold (whether directly or
indirectly through a wholly owned intermediary entity such as
AIMCO-LP, Inc. or AIMCO-GP, Inc.) 50.1% or more of the limited
partnership interests in AIMCO OP or (C) the date of which AIMCO
REIT shall cease for any reason to own 100% of the Voting Equity
Capital (or any other securities) of the General Partner of
Borrower, or (D) the replacement (other than solely by reason of
retirement at age sixty-five or older, death or disability) of
50% or more of the members of the board of directors (or
trustees, if applicable) of AIMCO REIT over a one-year period
where such replacement shall not have been approved by a vote of
at least a majority of the board of directors (or trustees, if
applicable) of AIMCO REIT then still in office who either were
members of such board of directors (or trustees, if applicable)
at the beginning of such one-year period or whose election as
members of the board of directors (or trustees, if applicable)
was previously so approved.
(iii) An "ACQUIRING PERSON" shall mean a "PERSON" or "GROUP OF PERSONS"
within the meaning of Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended; PROVIDED, HOWEVER, that
notwithstanding the foregoing, "ACQUIRING PERSON" shall not be
deemed to include any member of the Borrower Control Group unless
such member has, directly or indirectly, disposed of, sold or
otherwise transferred to, or encumbered or restricted (whether by
means of voting trust agreement or otherwise) for the benefit of
an Acquiring Person, all or any portion of the Voting Equity
Capital of AIMCO REIT directly or indirectly owned or controlled
by such member or such member directly or indirectly votes all or
any portion of the Voting Equity Capital of AIMCO REIT, directly
or indirectly, owned or controlled by such member for the taking
of any action which, directly or indirectly, constitutes or would
result in a Change of Control, in which event such member of the
Borrower Control Group shall be deemed to constitute an Acquiring
Person to the extent of the Voting Equity Capital of AIMCO REIT
owned or controlled by such member.
(iv) "BORROWER CONTROL GROUP" shall mean Xxxxx Xxxxxxxxx, Xxxxx X.
Xxxxxxxxx, Xxxxxxx X. Xxxxxxx, X. Xxxxxx Xxxxxx, Xxxxxx X. Xxxxxx
and Xxxx X. Xxxxx.
(v) A "PERSON" shall mean an individual, an estate, a trust, a
corporation, a partnership, a limited liability company or any
other organization or entity (whether governmental or private).
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(vi) "SECURITY" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
(vii) "VOTING EQUITY CAPITAL" shall mean Securities of any class or
classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the board of
directors (or Persons performing similar functions).
(viii) "AIMCO REIT" shall mean Apartment Investment and Management
Company, a corporation organized and existing under the laws of
the State of Maryland.
(ix) "AIMCO OP" shall mean AIMCO Properties, L.P., a limited
partnership organized and existing under the laws of the State of
Delaware.
(x) "GENERAL PARTNER" shall mean "AIMCO/OTC QRS, INC., a corporation
organized and existing under the laws of the State of Delaware.
(b) ACCELERATION OF THE LOAN UPON TRANSFERS OF THE PROPERTY OR SIGNIFICANT
INTERESTS
Subject to clause (c) hereof, Lender may, at Lender's option, declare all
sums secured by this Instrument immediately due and payable and Lender may
invoke any remedies permitted by paragraph 27 of this Instrument if, without
Lender's prior written consent, any of the following shall occur:
(i) a Transfer of all or any part of the Property or any interest in
the Property; or
(ii) a Transfer of any interest in Borrower or the General Partner; or
(iii) a Change in Control.
(c) NO ACCELERATION OF THE LOAN FOR TRANSFERS CAUSED BY CERTAIN EVENTS
Notwithstanding the foregoing provisions of this covenant, Lender shall not
be entitled to declare sums secured by this Instrument immediately due and
payable or to invoke any remedy permitted by paragraph 27 of this Instrument
solely upon the occurrence of any of the following:
(i) A Transfer that occurs by inheritance, devise, or bequest or by
operation of law upon the death of a natural person who is an
owner of an indirect ownership interest in the Borrower.
(ii) The grant of a leasehold interest in individual dwelling units
for a term of two years or less and leases for commercial uses
provided that (A) commercial leases do not exceed 5 percent (5%)
of (1) the rentable space of the Property (measured as required
by Lender) or (2) the rental income from the Property, (B) no
such commercial leasehold interest contains an option to purchase
the Property, and (C) all such commercial leasehold interests, in
the aggregate, (1) do not adversely affect the value of the
Property and (2) are coincidental to the current use of the
Property for multifamily residential purposes.
(iii) A sale or other disposition of obsolete or worn out personal
property which is contemporaneously replaced by comparable
personal property of equal or greater value which is free and
clear of liens, encumbrances and security interests other than
those created by the Loan Documents.
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(iv) The creation of a mechanic's or materialmen's lien or judgment
lien against the Property which is released of record or
otherwise remedied to Lender's satisfaction, within thirty (30)
days of the date of creation.
(v) The grant of an easement, if prior to the granting of the
easement Borrower causes to be submitted to Lender all
information required by Lender to evaluate the easement, and if
Lender determines that the easement will not materially affect
the operation of the Property or Lender's interest in the
Property and Borrower pays to Lender on demand, all costs and
expenses incurred by Lender in connection with reviewing
Borrower's request. Lender shall not unreasonably withhold its
consent to (A) the grant of a utility easement serving the
Property to a publicly operated utility, or (B) the grant of an
easement related to expansion or widening of roadways, provided
that such easement is in form and substance reasonably acceptable
to Lender and does not materially and adversely affect the
access, use or marketability of the Property.
(vi) The Transfer of shares of common stock, limited partnership
interests or other beneficial or ownership interests or other
forms of securities in AIMCO REIT or AIMCO OP, and the issuance
of all varieties of convertible debt, equity and other similar
securities of AIMCO REIT or AIMCO OP, and the subsequent Transfer
of such securities; provided, however, that no Change in Control
occurs as a result of such Transfer, either upon such Transfer or
upon the subsequent conversion to equity of such convertible debt
or other securities.
(vii) The issuance by AIMCO REIT or AIMCO OP of additional common
stock, limited partnership interests or other beneficial or
ownership interests, convertible debt, equity and other similar
securities, and the subsequent Transfer of such convertible debt
or securities; provided, however, that no Change in Control
occurs as the result of such Transfer, either upon such Transfer
or upon the subsequent conversion to equity of such convertible
debt or other securities.
(viii) A Transfer that occurs pursuant to Section 4.5 of the
Reimbursement Agreement.
(ix) A Transfer that occurs pursuant to Section 4.7 of the
Reimbursement Agreement.
(x) So long as AIMCO REIT owns 100% of the stock of AIMCO-LP, Inc., a
Transfer of limited partnership interests that results in AIMCO-
LP, Inc. owning not less than 50.1% of the limited partnership
interests in AIMCO OP.
L. Choice of Law; Consent to Jurisdiction. The provisions of Section 7.8
and 7.9 of the Reimbursement Agreement are hereby incorporated by reference
herein as if fully set forth herein.
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IN WITNESS WHEREOF, the parties hereto have executed this Special Rider or
have caused the same to be executed by their respective representatives
thereunto duly authorized.
BORROWER:
Signed, Sealed and OTC APARTMENTS LIMITED PARTNERSHIP, a
Delivered in the Florida limited partnership
Presence of:
By: AIMCO/OTC QRS, INC., a Delaware
corporation, its sole General
Partner
/s/ Illegible
---------------------------
/s/ Xxxxx X. Xxxxxx By: /s/ X. Xxxxxx
--------------------------- -----------------------------------
Xxxxx Xxxxxx
Vice President
