EXHIBIT 10.1
MANAGEMENT AGREEMENT BETWEEN
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND
RELATED CHARTER LP
This MANAGEMENT AGREEMENT (this "Agreement") dated as of October 1,
1997, between CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY (the "Company"), a
Delaware business trust, and RELATED CHARTER LP (the "Manager"), a Delaware
limited partnership.
W I T N E S S E T H:
WHEREAS, the Company is a Delaware business trust created in
accordance with applicable provisions of the Delaware Trust Act, 12 Del.
X.xx.xx. 3801 et. seq., as amended from time to time (the "Trust Act"); and
WHEREAS, the purposes of the Company are, as determined from time to
time by the board of trustees (the "Board of Trustees") of the Company, to
engage in any lawful business or activity for which a business trust may be
created under the Trust Act; and
WHEREAS, the Company desires to avail itself of the experience,
sources of information, advice and assistance of the Manager and to have the
Manager undertake the duties and responsibilities hereinafter set forth, on
behalf of and subject to the supervision of the Board of Trustees, all as
provided herein; and
WHEREAS, all capitalized terms used herein, and not otherwise
defined in Article 10, shall have the meanings ascribed to them in the Trust
Agreement; and
WHEREAS, the Manager is willing to render such services, subject to
the supervision of the Board of Trustees, on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, IT IS AGREED as follows:
1. Duties of Manager. The Company hereby retains the Manager as the manager of
the Company to perform the services hereinafter set forth, and the Manager
hereby accepts such appointment, subject to the terms and conditions hereinafter
set forth. In the performance of this undertaking, subject to the supervision of
the Board of Trustees and consistent with the provisions of the Company's
Amended and Restated Trust Agreement (the "Trust Agreement"), the Manager shall:
(1) obtain for the Company, furnish and/or supervise the services necessary to
perform any ministerial functions in connection with the management of the
day-to-day operations of the Company;
(2)
(3) seek out, present and recommend to the Company, whether through its own
efforts or those of third parties retained by it, suitable investment
opportunities which are consistent with the Company's investment objectives and
policies as adopted by the Board of Trustees from time to time, and negotiate on
behalf of the Company with respect to potential investments or the disposition
thereof;
(4)
(5) exercise absolute discretion, subject to the Board of Trustees' review, in
decisions to originate, acquire, retain, sell or negotiate for the prepayment or
restructuring of the Company's First Mortgage Bonds, SMLs, Tax Exempt Securities
and other mortgage and mortgage securities investments;
(6)
(7) recommend investment opportunities consistent with the Company's investment
objectives and policies and negotiate on behalf of the Company with respect to
potential investments or the disposition thereof;
(8)
(9) perform the duties set forth on Exhibit A in connection with servicing the
Company's loan portfolio;
(10)
(11) obtain for the Company such other services as may be required in acquiring
or disposing of investments, disbursing and collecting the funds of the Company,
paying the debts and fulfilling the obligations of the Company, and handling,
prosecuting and settling any claims of the Company, including foreclosing and
otherwise enforcing mortgages and other liens securing investments;
(12)
(13) obtain for the Company such services as may be required for property
management, mortgage brokerage and servicing, and other activities relating to
the investment portfolio of the Company;
(14)
(15) prepare, or cause to be prepared, statements and other relevant information
for distribution to Shareholders including annual and quarterly reports and any
filings required by regulatory authorities;
(16)
(17) monitor operations and expenses of the Company;
(18)
(19) from time to time, or as requested by the Board of Trustees, make reports
to the Company as to its performance of the foregoing services;
(20)
(21) perform any other powers of the Board of Trustees which are set forth in
the Trust Agreement which may be delegated to it by the Board of Trustees from
time to time; and
(22)
(23) do all things necessary to assure its ability to render the services
contemplated herein.
(24)
2. Fiduciary Relationship. The Manager, as a result of its relationship with the
Company pursuant to this Agreement, stands in a fiduciary relationship with the
Shareholders of the Company.
3.
4. No Partnership or Joint Venture. The Company and the Manager are not partners
or joint venturers with each other and nothing herein shall be construed to make
them partners or joint venturers or impose any liability as such on either of
them.
5.
6. Records. At all times, the Manager shall keep books of account and records
relating to services performed hereunder, which books of account and records
shall be accessible for
inspection by the Company at any time during the ordinary business hours of the
Manager.
7.
8. Limitations. Anything else in this Agreement to the contrary notwithstanding,
the Manager shall refrain from any action which, in its sole judgment made in
good faith, or, in the judgment of the Board of Trustees, provided that the
Board of Trustees give the Manager written notice to such effect, would (a)
cause the Company to be classified as (i) an "investment company" for purposes
of the Investment Company Act of 1940, as amended, or (ii) other than a
partnership for purposes of the Code; (b) violate any law, rule, regulation or
statement of policy of any governmental body or agency having jurisdiction over
the Company or over its securities, or (c) be prohibited by the Company's Trust
Agreement.
9.
10. Bank Accounts. The Manager may establish and maintain one or more bank
accounts in the name of the Company or in its own name as agent for the Company
and may collect and deposit in and disburse from any such account, any money on
behalf of the Company, under such terms and conditions as the Board of Trustees
may approve, provided that no funds in such account shall be commingled with
funds of the Manager. From time to time and upon appropriate request, the
Manager shall render appropriate accounting of such collections and payments to
the Board of Trustees and the auditors of the Company.
11.
12. Bond. If required by the Board of Trustees, the Manager will maintain a
fidelity bond with a responsible surety company in such amounts as may be
required by the Board of Trustees, covering all partners thereof together with
employees and agents of the Manager handling funds of the Company and investment
documents or records pertaining to investments of the Company. Such bonds shall
inure to the benefit of the Company in respect of losses from acts of such
partners, employees and agents through theft, embezzlement, fraud, negligence,
error or omission or otherwise. The premiums on such bonds shall be paid by the
Company.
13.
14. Information Furnished Manager. The Board of Trustees shall, at all times,
keep the Manager fully informed with regard to the investment policy of the
Company, including any specific types of mortgage investments and mortgage
securities desired,
and any criteria or conditions established by the Board of Trustees as to
whether the Company will make a particular investment, the capitalization policy
of the Company (including the policy with regard to the incurrence of
indebtedness by the Company) and their intentions as to the future operations of
the Company. In particular, the Board of Trustees shall notify the Manager
promptly of their intention to either sell or otherwise dispose of any of the
Company's investments, to make any new investment, to incur any indebtedness or
to issue any additional Shares.
15.
16. Consultation and Advice. In addition to the services described above, the
Manager shall consult with the Board of Trustees and shall, at the request of
the Board of Trustees of the Company, furnish advice and recommendations with
respect to other aspects of the business and affairs of the Company.
17.
18. Definitions. As used herein, the following terms shall have the meanings set
forth below:
19.
a. "Acquisition Expenses" shall mean expenses related to the Company's
selection of, and investment in, First Mortgage Bonds, Tax-Exempt Securities and
other investments, whether or not acquired or made, including but not limited to
advertising costs, brokerage fees, environmental, engineering and other due
diligence expenses, legal fees and expenses, travel and communications expenses,
cost of appraisals, accounting fees and expenses, title insurance and
miscellaneous other expenses.
b.
c. "Affiliated Programs" shall mean any publicly offered Entity which is
sponsored by an Affiliate of Related.
d.
e. "Initial Term" shall have the meaning set forth in Article 18.
f.
g. "Related" shall mean Related Capital Company, a New York general partnership.
h.
i. "Trust Agreement" shall mean the Amended and Restated Trust Agreement of the
Company dated as of September 30, 1997, as amended and/or restated from time to
time.
1. Fees and Other Compensation of the Manager. The Manager or its designees
shall be entitled to receive from the Company (except those payable by others as
noted below) the following fees and other compensation:
a. Sales Fees. If the Company forecloses on, or otherwise obtains direct or
indirect title to, an Underlying Property and sells such property, the Manager
or its Affiliates shall be entitled to a real estate commission equal to the
lesser of (i) 3% of the gross sales price of such property received by the
Company or (ii) one-half of the normal and competitive rate customarily charged
by unaffiliated parties rendering similar services, but such fees shall be paid
only if the Manager or its Affiliate provides a substantial amount of services
in the sales effort.
b.
c. Property Management Fees. In the event the Company forecloses on, or
otherwise obtains title to, an Underlying Property, the Company may be required
to take over the management of such property. In such cases, the Manager or its
Affiliates may provide property management services at rates and on terms no
less favorable to the Company than those customary for similar services, if they
have such knowledge of and experience in managing properties in the area. With
respect to residential properties, such fee (including all rent-up, leasing, and
re-leasing fees and bonuses paid to any person) shall not exceed 5% of the gross
revenues from such properties and with respect to all other properties, such fee
shall not exceed 6% of the gross revenues where the Manager of its Affiliates
provide leasing, re-leasing and leasing related services, and 3% of gross
revenues where the Manager or its Affiliates do not provide such services.
Notwithstanding the foregoing, the Manager may be entitled to receive higher
fees in the event the Manager can demonstrate to the satisfaction of the Board
of Trustees through empirical data that a higher competitive fee is justified
for the services rendered and the type of property. Where the Manager or its
Affiliates provide property management services, property management fees
payable to unaffiliated parties will be paid out of the fees paid to the Manager
or its Affiliate. Property management fees shall be payable monthly.
d.
e. Insurance Brokerage Fees. The Manager or its Affiliates may receive an
insurance brokerage fee for providing
insurance brokerage services with respect to Underlying Properties if such
services are required by the Company in the event of a default on a mortgage
investment. With respect to any insurance brokerage fee to be paid to the
Manager or its Affiliates by the Company, such insurance brokerage fee will be
no greater than the lowest quote obtained from two unaffiliated insurance
agencies and the coverage and terms likewise will be comparable.
x.
x. Xxxx Placement Fees. The Manager or its Affiliates may receive from
borrowers, but not from the Company or its subsidiaries, bond placement fees
equal to up to 2.0% of the principal amount of each First Mortgage Bond,
Tax-Exempt Securities or other tax-exempt instrument acquired or originated by
the Company, its subsidiaries or other Entities to which the Company or its
subsidiaries has transferred such First Mortgage Bonds, Tax-Exempt Securities or
other tax-exempt instruments to facilitate financing.
h.
i. Bond Selection Fees. The Manager or its Affiliates shall receive bond
selection fees equal to 2.00% of the principal amount of each First Mortgage
Bond, Tax-Exempt Securities or other tax-exempt instrument acquired or
originated by the Company, its subsidiaries or other Entities to which the
Company or its subsidiaries has transferred such First Mortgage Bonds,
Tax-Exempt Securities or other tax-exempt instruments to facilitate financing.
Bond Selection Fees shall be payable upon the consummation of the investment.
j.
k. Special Distributions. The Manager, in its capacity as a general partner of
the Company pursuant to Article 17, shall receive a special distribution equal
to 0.375% per annum of the Total Invested Assets of the Company and its
subsidiaries. Special Distributions shall be payable whenever Distributions are
made to Shareholders pursuant to the Trust Agreement.
x.
x. Loan Servicing Fees. The Manager shall receive loan servicing fees equal to
0.25% per annum based on the outstanding principal amount of First Mortgage
Bonds or other mortgage investments which are held by the Company or other
entities to whom the Company has transferred such First Mortgage
Bonds or other mortgage investments to facilitate financing. Loan servicing fees
shall be payable quarterly.
n.
o. Liquidation Fees. If the Company is dissolved, the Manager shall receive a
liquidation fee equal to 1.50% of the gross sales price of the assets sold in
connection with the liquidation of the Company's directly or indirectly owned
assets.
p.
q. Money Market Fees. If funds of the Company are temporarily invested in money
market funds sponsored by the Manager or its Affiliates they shall be entitled
to receive the fees customarily charged by such money market funds to
unaffiliated third parties making similar investments therein.
r.
s. Other Compensation. The Manager or its Affiliates may provide financial
guarantees (i) to the Company to facilitate leveraging by the Company, for which
they shall be entitled to receive market rate fees from the Company and (ii) to
the owners (or partners of the owners) of the Underlying Properties for which
they shall be entitled to receive market rate fees from such Entities.
t.
u. Services to Third Parties. Except as set forth in Section 11(d), nothing in
this Agreement shall limit the Manager or its Affiliates' right to provide
services to borrowers or owners of Underlying Properties provided the fee
charged for such services is not in excess of the competitive rate in the
market.
v.
2. Statements. Prior to the payment of any fees hereunder, the Manager shall
furnish to the Company a statement showing the computation of the fees, if any,
payable under Section 11 hereof.
3.
4. Incentive Share Options. Subject to the provisions of the Trust Agreement,
the Manager and its partners, officers and employees may receive options to
acquire Shares pursuant to the Company's Incentive Share Option Plan only if the
Company's distributions in any year exceed $0.9517 per Share, and the
Compensation Committee of the Board of Trustees determines to grant such
options.
5.
a. Expenses of the Company. The Company shall pay all of its expenses. Without
limiting the foregoing, it is
specifically agreed that the following expenses of the Company shall be paid by
the Company and shall not be borne by the Manager unless such expense is a fee
or other service for which the Manager is otherwise receiving a fee from the
Company:
b.
(1) the cost of money borrowed by the Company;
(2)
(3) all taxes applicable to the Company including, without limitation, taxes on
income and on assessments of real property;
(4)
(5) fees and expenses paid to independent contractors, unaffiliated mortgage
servicers, consultants, managers and other agents employed by or on behalf of
the Company;
(6)
(7) Acquisition Expenses and expenses directly connected with the ownership and
disposition of investments or other property, and with the origination or
purchase of First Mortgage Bonds or other tax-exempt instruments (including the
costs of foreclosure, insurance premiums, legal services, brokerage and sales
commissions, maintenance, repair and improvement of property);
(8) expenses of maintaining and managing real estate equity interests,
processing and servicing mortgage and other loans and managing the Company's
other investments;
(9)
(10) insurance coverage in connection with the business of the Company
(including officers' and trustees' liability insurance);
(11)
(12) the expenses of dissolving and liquidating the Company or revising,
amending or modifying its organizational documents;
(13)
(14) expenses connected with payments of dividends or interest or distribution
in cash or any other form made or caused to be made by the Board of Trustees to
Shareholders;
(15)
(16) all expenses connected with communications to Shareholders and other
bookkeeping and clerical work necessary in maintaining relations with the
Shareholders, including the cost of printing and mailing certificates for
securities, proxy solicitation materials and reports to holders of the Company's
securities;
(17)
(18) the cost of any accounting, statistical or bookkeeping equipment necessary
for the maintenance of the books and records of the Company;
(19)
(20) transfer agent's and registrar's fees and charges; and
(21)
(22) other legal, accounting and auditing fees and expenses as well as any
costs incurred in connection with any litigation in which the Company is
involved and in the examination, investigation or other proceedings conducted by
any regulatory agency with respect to the Company.
(23)
c. Subject to Article 15, the Company shall reimburse the Manager and its
Affiliates for (i) the actual costs to the Manager or its Affiliates of goods,
materials and services used for and by the Company obtained from unaffiliated
parties; (ii) administrative services necessary to the operation of the Company;
(iii) the costs of personnel employed by the Manager and directly involved in
the organization and business of the Company (including persons who may be
employees or officers of the Manager and its Affiliates) and for legal,
accounting, transfer agent, reinvestment and redemption plan administration,
data processing, duplicating and investor communications services performed by
employees or officers of the Manager and its Affiliates which could be performed
directly for the Company by independent parties and (iv) any travel expenses
incurred in connection with the services provided hereunder and for advertising
expenses incurred by the Manager in seeking any investments or seeking the
disposition of any investments held by the Company. The amounts charged to the
Company for services performed shall not exceed the lesser of (a) the actual
cost of such services, or (b) the amount which the Company would be required to
pay to independent parties for comparable services.
d.
6. Limitations on Reimbursements. The amounts reimbursed to the Manager pursuant
to Section 14(b) above shall not exceed $200,000 per annum, subject to (i)
annual increases following the first anniversary of the date hereof and each
year thereafter based upon increases in the Consumer Price Index for All Urban
Consumers, N.Y., N.Y. -Northeastern N.J. (Base Year 1982-1984 = 100) specified
for "All Items" as issued by the Bureau of Labor Statistics, U.S. Department of
Labor (or comparable substitute index) and (ii) proportionately as the Company's
assets increase
based upon the amount of the Company's Total Invested Assets from time
to time.
7.
a. Other Activities of Manager. Nothing in this Agreement shall prevent the
Manager or any of its Affiliates from engaging in other business activities
related to real estate, mortgage investments or other investments whether
similar or dissimilar to those made by the Company or from acting as manager to
any other person or entity having investment policies whether similar or
dissimilar to those of the Company. However, before the Manager, the officers
and directors of the Manager and all persons controlled by the Manager and its
officers and directors may take advantage of an opportunity for their own
account or present or recommend it to others (except as set forth in Section
16(b)), they are obligated to present an investment opportunity to the Company
if (i) such opportunity is compatible with the Company's investment objectives
and policies, (ii) such opportunity is of a character which could be taken by
the Company, and (iii) the Company has the financial resources to take advantage
of such opportunity.
b.
c. (i) To the extent that an Affiliated Program with similar investment
objectives to those of the Company have funds available for investment at the
same time as the Company, and/or an investment is potentially suitable for more
than one such Entity the Manager and its Affiliates shall review the investment
portfolio of each such Entity and shall make the decision as to which such
Entity will acquire the investment on the basis of such factors as it deems
reasonable in light of each Entity's then current situation, including, without
limitation, the effect of the acquisition on each such Entity's portfolio and
objectives, the amount of funds available and the then length of time such funds
have been available for investment, and the cash requirements of each such
Entity. If funds should be available to two or more Affiliated Programs to
purchase a given investment and the other factors enumerated above have been
evaluated and deemed equally applicable to each Entity, then the Manager or its
Affiliates will acquire such investment for the Affiliated Programs on a basis
of rotation with the initial order of priority determined by the dates of
formation of the Entities.
d.
e. (ii) Notwithstanding the foregoing, nothing herein shall be construed to
require CentRe Mortgage Capital, L.L.C.
which is an Affiliate of the Manager, to present any investment opportunity to
the Company.
f.
8. Tax Matters Partner; General Partner for Tax Purposes. The Manager shall be
designated the "Tax Matters Partner" to manage administrative tax proceedings
conducted at the Company level by the Internal Revenue Service with respect to
Company matters. The Manager shall also be deemed the general partner of the
Company for tax purposes and by execution of this Agreement consents to such
appointments and agrees to be bound by all the obligations set forth in the
Trust Agreement with respect to its role as Tax Matters Partner and general
partner for tax purposes. Pursuant to the Trust Agreement, the Manager agrees to
maintain ownership of at least 10 Shares of the Company during the term of this
Agreement.
9.
10. Term; Termination of Agreement. This Agreement shall continue in force and
shall not be terminable by the Company for a period of four years from the date
hereof (the "Initial Term") and thereafter it may be renewed by the Company from
year to year, subject to the approval of a majority of the Board of Trustees.
Notice of renewal shall be given in writing by the Company to the Manager not
less than 60 days before the expiration of this Agreement or of any extension
thereof.
11.
12. Notwithstanding any other provision to the contrary, this Agreement shall be
terminable (i) with or without Cause by the Manager at any time (ii) without
Cause by a majority of the Independent Trustees after the expiration of the
Initial Term; or (iii) for Cause by a majority of the Independent Trustees at
any time, each without penalty, and each upon 60 days' prior written notice
prior to the non-terminating party.
13.
14. In the event of the termination of this Agreement, the Manager will
cooperate with the Company and take all reasonable steps requested to assist the
Board of Trustees in making an orderly transition of the management function.
15.
16. Restrictions on Company's Right to Dissolve. The Company shall not dissolve
and liquidate prior to the expiration of the Initial Term except upon a
recommendation of the Manager and the Majority Vote of the Shareholders. After
the expiration of the Initial Term, the vote of the holders of 66b% of the
Company's then outstanding Shares shall be required to approve a dissolution and
liquidation of the Company that is not recommended by the Manager and the
Majority Vote of Shareholders shall be required to approve a liquidation of the
Company recommended by the Manager. If for any reason, whether prior to or after
the expiration of the Initial Term, this Agreement is terminated in accordance
with its terms, the restrictions on the Company's right to dissolve and
liquidate set forth in this Article 19 shall terminate.
17. Amendments. This Agreement shall not be changed, modified, terminated or
discharged in whole or in part except by an instrument in writing signed by both
parties hereto, or their respective successors or permitted assigns, or
otherwise as provided herein.
18.
19. Assignment. This Agreement may not be assigned by the Manager without the
written consent of the Company, except to an Affiliate of the Manager. Any
assignee of the Manager shall be bound hereunder to the same extent as the
Manager. This Agreement shall not be assigned by the Company without the written
consent of the Manager, except to a corporation, association, trust or other
organization which is a successor to the Company. Such successor shall be bound
hereunder to the same extent as the Company. Notwithstanding anything to the
contrary contained herein, the economic rights of the Manager hereunder,
including the right to receive all compensation hereunder, may be sold,
transferred or assigned by the Manager without the consent of the Company.
20.
21. Action Upon Termination. From and after the effective date of termination of
this Agreement, pursuant to Section 18 hereof, the Manager shall not be entitled
to compensation for further service rendered hereunder but shall be paid all
compensation and reimbursed for all expenses accrued through the date of
termination. The Manager shall forthwith upon such termination:
22.
a. pay over to the Company all moneys collected and held for the account of the
Company pursuant to this Agreement, after deducting any accrued compensation and
reimbursement for its expenses to which it is then entitled;
b.
c. deliver to the Company a full accounting, including a statement showing all
payments collected by it and a statement of all moneys held by it, covering the
period following the date of the last accounting furnished to the Company; and
d.
e. deliver to the Company all property and documents of the Company then in the
custody of the Manager.
f.
23. Incorporation of the Trust Agreement. To the extent the Trust Agreement
imposes obligations or restrictions on the Manager or grants the Manager certain
rights which are not set forth in this Agreement, the Manager shall abide by
such obligations or restrictions and such rights shall inure to the benefit of
the Manager with the same force and effect as if they were set forth herein.
24.
25. Standard of Care. The Manager assumes no responsibility under this Agreement
other than to render the services called for hereunder in good faith, and shall
not be responsible for any action of the Company in following or declining to
follow any advice or recommendations of the Manager. Neither the Manager nor its
directors, officers, partners, members, and employees shall be liable to the
Company, the Shareholders, the Trustees or to any successor or assignee of the
Company, except by reason of acts constituting bad faith, gross negligence or
reckless disregard of their duties. This shall in no way affect the standard for
indemnification but shall only constitute a standard of liability. The duties to
be performed by the Manager pursuant to this Agreement may be performed by it or
by officers, directors or by Affiliates of the foregoing under the direction of
the Manager or delegated to unaffiliated third parties under its direction.
26.
27. (b) The Manager shall look solely to the assets of the Company for
satisfaction of all claims against the Company, and in no event shall any
Shareholder or Trustee of the Company have any personal liability for the
obligations of the Company under this Agreement.
28.
a. Indemnification of Manager. The Company shall indemnify the Manager and its
Affiliates for any loss arising out of any of their acts or omissions in
connection with this Agreement; provided that (i) the Board of Trustees must
have
determined, in good faith, that such course of conduct was in the best
interests of the Company and did not constitute negligence or misconduct by the
Manager or its Affiliates; (ii) such conduct was within the scope of authority
of the Manager; and (iii) any such indemnification shall be recoverable only
from the assets of the Company and not from the assets of the Shareholders or
the Trustees. Notwithstanding the foregoing, the Manager or its Affiliates shall
not be indemnified for any liability, loss or damage incurred by the Manager or
its Affiliates in connection with any claim or settlement involving allegations
that federal or state securities laws were violated by the Manager or its
Affiliates unless: (a) the Manager or its Affiliates seeking indemnification are
successful in defending such action on the merits of each count involving
securities law violations; or (b) such claims have been dismissed with prejudice
on the merits by a court of competent jurisdiction; or (c) a court of competent
jurisdiction approves a settlement of the claims against the Manager or its
Affiliates seeking indemnification involving securities law violations and finds
that indemnification of the settlement and related costs should be made; or (d)
indemnification is specifically approved by a court of competent jurisdiction in
each such case.
b.
29. Notices. Any notice, report or other communication required or permitted to
be given hereunder shall be in writing, and shall be given by delivering such
notice by hand or by certified mail, return receipt requested, postage pre-paid,
at the following addresses of the parties hereto:
Company:
Charter Municipal Mortgage Acceptance Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Managing Trustee
with a copy to:
Xxxxxxx Xxxxxxx, Esq.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Manager:
Related Charter LP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Executive Vice President
with a copy to:
Xxxxxxx Xxxxxxx, Esq.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Either party may at any time change its address for the purpose of
this Section 26 by like notice.
1. Headings. The section headings herein have been inserted
for convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
2.
3. Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of New
York as at the time in effect.
4.
5.
IN WITNESS WHEREOF, the undersigned have caused this agreement to be
signed as of the day and year first above written.
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE
COMPANY
By:
----------------------------------------
J. Xxxxxxx Xxxxx
Managing Trustee
RELATED CHARTER LP
By: Related Charter LLC, its general
partner
By:
--------------------------------------
Xxxxxx X. Xxxxxx
Member
1
EXHIBIT A
Loan Servicing Duties
Manager shall perform the following services and duties with respect to
servicing of Mortgage Loans:
(a) Manager shall maintain with accuracy such records and books of account
as are customarily maintained by services in connection with mortgage loans
similar to the Mortgage Loans.
(b) Manager shall use its best efforts to make collections on all payments
due and to monitor the payment of amounts payable on the First Mortgage Bonds
issued to finance each Mortgage Loan (including the payment of base interest,
contingent interest and deferred interest). Manager shall make regular reports
to the Company on such collections and payments and shall upon request of the
Company advise as to the status of each Mortgage Loan or any matter relating
thereto.
(c) Manager shall make remittance to the Company of payments and
collections received under the Mortgage Loans in accordance with instructions of
the Company or as otherwise agreed by the parties.
(d) Manager shall maintain for each Mortgage Loan appropriate real estate
tax and insurance impound accounts as well as replacement reserve accounts
pursuant to the terms of the building loan agreements or loan agreements ("Loan
Agreements") or as otherwise authorized and directed by the Company.
(e) Manager shall report with reasonable promptness to the Company with
respect to each Mortgage Loan (i) any fact or circumstance that may impair the
first lien priority of the Mortgage Loan, (ii) any sale, refinancing, casualty
(in excess of $10,000) or abandonment with respect to the related Underlying
Property and (iii) any event of default under the related Loan Agreement or any
event which, upon the passage of time, would become an event of default under
the related Loan Agreement.
(f) Promptly after any officer, employee or representative of Manager who
would normally be aware of this Agreement in the ordinary course of his or her
duties shall have received knowledge
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of the occurrence of an event of default under the Loan Agreement relating to a
Mortgage Loan or an event which, upon the passage of time would become an event
of default under the Loan Agreement relating to a Mortgage Loan, Manager shall
evaluate the status of the Mortgage Loan and the related Underlying Property,
including, without limitation, alternative measures for the exercise of rights
and remedies. Manager shall communicate promptly such evaluation to the Company.
Manager shall not be obligated to take any action under the related Loan
Agreement and other loan documents relating to the Mortgage Loan ("Loan
Documents") until and unless it shall have received prior authorization and
instruction to do so from the Company.
(g) Other duties of Manager with respect to the servicing of Mortgage
Loans are generally as follows:
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! Maintain accurate books and records of account as are customarily
maintained by a loan servicer in connection with similar mortgage
loans.
! Prepare monthly bills to borrowers in accordance with loan documents
for payment of principal, interest, and deposits into the tax,
insurance and replacement reserves.
! Process monthly collections and deposit into appropriate accounts.
! Review tax and insurance escrows as necessary and cause to be
adjusted monthly escrow payments in accordance with terms of Loan
Documents.
! Cause tax and insurance payments to be made promptly when due or
otherwise as agreed by the parties.
! Review and process requests of borrowers for withdrawals from
replacement reserve accounts in accordance with terms of Loan
Documents.
! Maintain monthly, quarterly and annual loan history schedules for
each Mortgage Loan.
! Prepare quarterly reports for the Company, or otherwise as
reasonably requested, which outline the status of each Mortgage Loan
including outstanding loan balances and escrow balances.
! Prepare year-end reports for each borrower outlining total interest
and total principal paid for the year as well as escrow account
transaction activity and escrow balances.
! Prepare and deliver year-end IRS Form 1099's to borrowers.
! Notify and report to the Company promptly, as may come to Manager's
attention, generally and specifically, any circumstances that may
impair lien priority of the
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Company, sale/refinancing/casualty and/or event of default under
Loan Documents.
! Advise the Company promptly of delinquency or default under Loan
Documents as such comes to the attention of Manager.
! Prepare and forward delinquency and default notices and follow-up as
necessary.
! Ensure adequate insurance coverage at closing and determine the
appropriate initial deposits into tax and insurance escrows.
! Coordinate all modifications, work-outs and restructurings,
interfacing with third parties including attorneys, engineers,
accountants, asset managers and borrowers, as required and as
directed by the Company.
! Use best efforts to obtain monthly quarterly and year end audited
financial statements from the borrowers as required under the Loan
Documents.
! Review and approve annual operating budgets for each Underlying
Property as delivered by borrowers.
! Track and review monthly, quarterly, and annual financial
performance of each property utilizing financing statements
submitted by the Underlying Property, comparing the Underlying
Property's actual operations to approved budgeted expectations,
prior years operations and local market trends.
! Track monthly occupancy and unit rent levels of each Underlying
Property.
! Maintain Loan Documents and document custody.
! Oversee loan compliance for each Mortgage Loan.
! Cause periodic physical and management review of each Underlying
Property.
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! Interface and coordinate with inspecting engineers for periodic
physical reviews as necessary of each underlying property.
! Monitor and maintain security and escrows for guarantees, as
applicable.
! Handle disbursements and release of security in conformance with
Loan Documents.
! Cause to be delivered updated title reports, as required from time
to time under Loan Documents.
! Prepare pay-off letters, as required.
(h) Manager may perform additional duties with respect to Mortgage Loans
as the Company and the Manager may mutually agree.
