EXHIBIT 4(ii)(i)
Loan Number: 020101
CREDIT AGREEMENT
by and among
HERITAGE-IVYSTONE L.P., HERITAGE-LONDON PARK L.P., HERITAGE-
SPRINGFIELD L.P., UDR PECAN GROVE, L.P., UDR ARIZONA PROPERTIES, LLC,
ASV-VII PROPERTIES, INC., and UNITED DOMINION REALTY TRUST, INC.,
collectively as Borrower
AND
GMAC COMMERCIAL MORTGAGE CORPORATION, as Lender
February 26, 2002
TABLE OF CONTENTS
Page
1. DEFINITIONS............................................................. 1
1.1. Definitions....................................................... 1
1.2. Construction...................................................... 13
1.2.1. Number; Inclusion......................................... 13
1.2.2. Determination............................................. 13
1.2.3. Lender's Discretion and Consent; References to Lender's
Requirements.............................................. 13
1.2.4. Documents Taken as a Whole................................ 14
1.2.5. Headings.................................................. 14
1.2.6. Implied References to this Agreement...................... 14
1.2.7. Persons................................................... 14
1.2.8. Modifications to Documents................................ 14
1.2.9. From, To and Through...................................... 14
1.2.10. Conflicts with Other Loan Documents....................... 14
1.3. Accounting Principles............................................. 14
2. CREDIT FACILITY......................................................... 15
2.1. Lender's Commitment............................................... 15
2.1.1. Conversion of Indebtedness................................ 15
2.1.2. Increases in the Commitment............................... 17
2.2. Term.............................................................. 18
2.3. Nature of Lender's Obligations with Respect to the Loan........... 18
2.4. Fees.............................................................. 18
2.4.1. Fees Paid Prior to the Closing Date....................... 19
2.4.2. Fees Due on the Closing Date.............................. 19
2.4.3. Unused Facility Fee....................................... 19
2.4.4. Minimum Usage Fee......................................... 19
2.4.5. Minimum Servicing Fee..................................... 20
2.5. Loan Requests under the Revolving Credit Note........................... 20
2.5.1. Sublimits....................................................... 20
2.6. Borrowing Tranches...................................................... 21
2.7. The Note................................................................ 21
2.8. Use of Proceeds......................................................... 22
2.9. Additions to the Collateral Pool........................................ 22
2.9.1. Procedure for Proposing a Real Property Addition to the
Collateral Pool................................................. 22
2.9.2. Procedure for Adding a Real Property to the Collateral Pool..... 22
2.9.3. Addition Fee.................................................... 24
2.10. Release of Collateral................................................... 24
2.11. Payment of the Loan Balance Without Termination......................... 24
2.12. Valuations.............................................................. 25
2.12.1. Timing and Procedure of Valuation............................... 25
2.12.2. Valuations that Disclose a Decrease in Market Value............. 25
2.13. Early Termination Rights................................................ 25
2.13.1. Borrower's Right to Terminate the Revolving Credit Note......... 25
2.13.2. Borrower's Right to Terminate any Fixed Rate Note............... 26
2.13.3. Borrower's Right to Terminate the Agreement..................... 26
2.13.4. Fees Due Upon Early Termination................................. 26
2.14. Material Adverse Change................................................. 27
2.15. Release of Collateral Followed by a Permanent Loan...................... 27
2.15.1. Permanent Loan.................................................. 28
2.15.2. Procedure for Making a Permanent Loan........................... 28
2.16. Guaranty................................................................ 29
2.17. Extension Option........................................................ 30
3. INTEREST RATES................................................................. 31
3.1. Interest Rate........................................................... 31
3.2. Interest Rate Determinations............................................ 31
3.2.1. Prime Rate and Base Rate Determinations......................... 31
3.2.2. Base Rate and Margin Quotations................................. 32
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3.3. Interest Periods......................................................... 32
3.3.1. Interest Period to End on a Business Day......................... 32
3.3.2. No Interest Periods Beyond the Revolving Credit Note
Expiration Date.................................................. 32
3.3.3. Renewals......................................................... 32
3.3.4. Interest After Default........................................... 33
3.3.5. Late Charge...................................................... 34
3.4. Reference Bills(SM) Rate Unascertainable: Illegality; Increased Costs.... 34
3.4.1. Unascertainable.................................................. 34
3.4.2. Illegality; Increased Costs...................................... 34
3.4.3. Lender's Rights.................................................. 35
4. PAYMENTS....................................................................... 35
4.1. Payments................................................................. 35
4.2. Payment Dates............................................................ 35
4.3. Prepayments.............................................................. 36
4.3.1. Voluntary Prepayments............................................ 36
4.3.2. Mandatory Prepayment / Collateral Pool Addition.................. 36
4.4. Prepayment Fee........................................................... 38
4.5. Additional Payment Obligations........................................... 38
4.6. Additional Compensation in Certain Circumstances......................... 38
4.6.1. Increased Costs Resulting from Taxes, Etc........................ 39
4.6.2. Termination...................................................... 39
4.6.3. Indemnity........................................................ 39
5. CONDITIONS OF LENDING.......................................................... 40
5.1. Initial Borrowing........................................................ 40
5.1.1. Delivery of Loan Documents....................................... 40
5.1.2. Validity of Representations...................................... 40
5.1.3. Officer's Certificate............................................ 40
5.1.4. Opinion of Counsel............................................... 41
5.1.5. Legal Details.................................................... 41
5.1.6. Payment of Fees.................................................. 41
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5.1.7. Consents.................................................... 41
5.1.8. No Material Adverse Change.................................. 41
5.1.9. No Violation of Laws........................................ 42
5.1.10. No Actions or Proceedings................................... 42
5.1.11. Collateral Initially Included in Collateral Pool............ 42
5.1.12. Other Conditions............................................ 42
5.2. Each Subsequent Borrowing Tranche................................... 42
6. REPRESENTATIONS AND WARRANTIES............................................ 43
6.1. Representations and Warranties...................................... 43
6.1.1. Organization and Qualification.............................. 43
6.1.2. Single Asset Borrower....................................... 43
6.1.3. Power and Authority......................................... 43
6.1.4. Validity and Binding Effect................................. 43
6.1.5. No Conflict................................................. 43
6.1.6. Litigation.................................................. 44
6.1.7. Title to Collateral Pool Properties......................... 44
6.1.8. Use of Proceeds............................................. 44
6.1.9. Full Disclosure............................................. 44
6.1.10. Taxes....................................................... 45
6.1.11. Consents and Approvals...................................... 45
6.1.12. No Event of Default; Compliance with Instruments............ 45
6.1.13. Security Interests.......................................... 45
6.1.14. Mortgage Liens.............................................. 46
6.1.15. Insurance................................................... 46
6.1.16. Material Contracts; Burdensome Restrictions................. 46
6.1.17. Investment Companies; Regulated Entities.................... 46
6.1.18. Pension Plans and Benefit Arrangements...................... 47
6.1.19. Other Indebtedness.......................................... 48
6.1.20. Solvency.................................................... 48
6.1.21. Agreements.................................................. 48
6.1.22. No Bankruptcy Filing........................................ 48
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6.1.23. Formation................................................. 48
6.1.24. Compliance................................................ 49
6.1.25. Not a Foreign Person...................................... 49
6.1.26. Labor Matters............................................. 49
6.1.27. Condemnation.............................................. 49
6.1.28. Utilities and Public Access............................... 49
6.1.29. No Joint Assessment; Separate Lots........................ 49
6.1.30. Assessments............................................... 50
6.1.31. No Liabilities............................................ 50
6.1.32. No Prior Assignment....................................... 50
6.1.33. Certificate of Occupancy.................................. 50
6.1.34. Intellectual Property..................................... 50
6.1.35. Conduct of Business....................................... 50
6.1.36. Title Insurance........................................... 51
6.1.37. No Default................................................ 51
6.1.38. Condition of the Collateral Pool Properties............... 51
6.1.39. Non-Residential Leases.................................... 51
6.1.40. No Low Income Housing Tax Credit.......................... 51
6.1.41. No Restrictions........................................... 51
6.1.42. No Adverse Affect on the Loan............................. 51
6.1.43. Term of Leases............................................ 52
6.2. Updates........................................................... 52
6.3. Survival of Representations and Warranties........................ 52
7. COVENANTS............................................................... 52
7.1. Covenants......................................................... 52
7.1.1. Preservation of Existence................................. 52
7.1.2. Maintenance of Real Estate Properties and Leases.......... 53
7.1.3. Collateral Agreements..................................... 53
7.1.4. Inspection Rights......................................... 53
7.1.5. Single Asset Borrower..................................... 53
7.1.6. Use of Proceeds........................................... 54
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7.1.7. Further Assurances......................................... 54
7.1.8. Collateral Pool Properties................................. 54
7.1.9. Subsequent Periodic Valuations............................. 54
7.1.10. Special ERISA Related Covenants............................ 54
7.1.11. Indebtedness............................................... 55
7.1.12. Liens...................................................... 56
7.1.13. Liquidations, Mergers, Consolidations, Acquisitions........ 56
7.1.14. Dispositions of Assets..................................... 56
7.1.15. Affiliate Transactions..................................... 56
7.1.16. Continuation of or Change in Business...................... 56
7.1.17. Changes in Organizational Documents; Name.................. 56
7.1.18. Properties Under Development............................... 57
7.1.19. Further Documentation...................................... 57
7.1.20. Compliance with Lender Requirements........................ 57
7.1.21. Subordination of Leases.................................... 57
7.1.22. Enforceability of Loan Documents........................... 57
7.1.23. ERISA Matters.............................................. 58
7.2. Reporting Requirements............................................. 58
7.2.1. Notice of Default.......................................... 58
7.2.2. Notice of Litigation....................................... 59
7.2.3. Notice of Material Adverse Change.......................... 59
8. DEFAULT.................................................................. 59
8.1. Events of Default.................................................. 59
8.1.1. Payments Under Loan Documents.............................. 59
8.1.2. Breach of Representation or Warranty....................... 59
8.1.3. Breach of Covenant......................................... 59
8.1.4. Event of Default under the Loan Documents.................. 60
8.1.5. Final Judgments or Orders.................................. 60
8.1.6. Notice of Lien or Assessment............................... 60
8.1.7. Insolvency................................................. 60
8.1.8. Cessation of Business...................................... 60
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8.1.9. Lien Priority....................................................... 60
8.1.10. Bankruptcy and Other Proceedings.................................... 61
8.1.11. Material Adverse Change............................................. 61
8.2. Consequences of Event of Default............................................ 61
8.3. Notice of Sale.............................................................. 61
9. MISCELLANEOUS..................................................................... 61
9.1. Cooperation by Borrower; Borrower's Obligations............................. 61
9.2. Successors and Assigns...................................................... 62
9.3. Modifications, Amendments or Waivers........................................ 62
9.4. Forbearance................................................................. 62
9.5. Remedies Cumulative......................................................... 62
9.6. Reimbursement and Indemnification of Lender and Servicer by Borrower;
Taxes....................................................................... 63
9.7. Holidays.................................................................... 63
9.8. Notices..................................................................... 64
9.9. Severability................................................................ 65
9.10. Governing Law; Consent to Jurisdiction and Venue............................ 65
9.11. Prior Understanding......................................................... 65
9.12. Duration; Survival.......................................................... 65
9.13. Disclosure of Information................................................... 66
9.14. Exceptions.................................................................. 66
9.15. Relationship of Parties; No Third Parties Benefited......................... 66
9.16. Authority to File Notices................................................... 66
9.17. WAIVER OF TRIAL BY JURY..................................................... 66
9.18. Interpretation.............................................................. 67
9.19. Brokerage Fee............................................................... 67
9.20. Advertising................................................................. 67
9.21. Time of Essence............................................................. 67
9.22. Counterparts................................................................ 67
9.23. Transfers of Collateral Pool Properties to Affiliates of Borrower........... 67
9.24. Full Recourse Guaranty...................................................... 68
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9.25. Indemnity and Certification Regarding Certain Surveys Provided to Lender....... 69
9.26. Provisions regarding the Springfield Apartments in Denton, Texas............... 69
10. PROVISIONS WITH RESPECT TO THE FIXED RATE NOTE........................................ 70
10.1. Fixed Rate Note Specific Provisions Contained in Section 1..................... 70
10.2. Fixed Rate Note Specific Provisions Contained in Section 2..................... 70
10.3. Fixed Rate Note Specific Provisions Contained in Section 3..................... 71
10.4. Additional Fixed Rate Note Specific Provisions................................. 71
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CREDIT AGREEMENT
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THIS CREDIT AGREEMENT ("Agreement") is dated as of February 26, 2002
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and is made by and among HERITAGE-IVYSTONE L.P., an Arizona limited partnership,
HERITAGE-LONDON PARK L.P., an Arizona limited partnership, HERITAGE-SPRINGFIELD
L.P., an Arizona limited partnership, UDR PECAN GROVE, L.P., a Delaware limited
partnership, UDR ARIZONA PROPERTIES, LLC, a Virginia limited liability company,
ASV-VII PROPERTIES, INC., an Arizona corporation and UNITED DOMINION REALTY
TRUST, INC., a Virginia corporation, each having an address at c/o United
Dominion Realty Trust, Inc. (as applicable), 000 Xxxx Xxxx Xxxxxx, Xxxxxxxxx
Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000 (collectively, "Borrower") and GMAC COMMERCIAL
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MORTGAGE CORPORATION, a California corporation, having an address at 000 Xxxxxx
Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000.
RECITALS
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WHEREAS, Borrower desires to obtain from Lender a credit facility in
an amount, up to but not exceeding, Seventy Million Six Hundred Sixty-Nine
Thousand and NO/100 Dollars ($70,669,000.00), subject to adjustment in the
manner set forth herein;
WHEREAS, Borrower has offered to grant Lender a security interest in
certain real property and other assets owned by Borrower as security for
Borrower's repayment of such loan; and
WHEREAS, Lender is willing to make the above-described loan to
Borrower secured by an interest in such real property 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
1.1. Definitions.
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 increase in the
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Maximum Facility Available caused solely by the addition of real property to the
Collateral Pool.
"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
---------
supplemented or amended from time to time, including all schedules attached
hereto.
"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.
"Base Rate" shall mean the Reference BillsSM Rate plus the Margin or
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the LIBO Rate plus the Margin, as the context shall require. Interest accruing
at the Base Rate shall be calculated monthly in the manner provided herein based
on the aggregate principal balance of the Base Rate Borrowing Tranches
outstanding during the applicable Month, and such interest shall be paid in
arrears, as provided herein. The Reference BillsSM Rate or the LIBO Rate, as
applicable, with respect to each Base Rate Borrowing Tranche shall remain fixed
throughout the applicable Interest Period and shall then be redetermined as of
each renewal of such Base Rate Borrowing Tranche in accordance with SECTION
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3.2.1. The Margin with respect to each Base Rate Borrowing Tranche shall be
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determined and redetermined from time to time in accordance with SECTION 3.2.1.
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"Base Rate Borrowing Tranche" shall mean any Borrowing Tranche which
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accrues interest at the Base Rate.
"Benefit Arrangement" shall mean at any time an "employee benefit
-------------------
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.
"Borrower" shall mean the entity(ies) defined as Borrower in the
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Recitals together with any Proposed Borrower that joins in this Agreement
pursuant to the terms and conditions of SECTION 2.9.2.2.
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"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 (i) each advance at the Base Rate
-----------------
hereunder having a particular Interest Period outstanding at any one time, (ii)
each advance, if any, evidenced by a separate Fixed Rate Note and (iii) all
advances at the Prime Rate. Two (2) or more Base Rate Borrowing Tranches may be
combined to form a single Base Rate Borrowing Tranche with the same Interest
Period in the event such Borrowing Tranches mature and are renewed at the same
time with the same Interest Period, provided that in the event such Borrowing
Tranches do not mature at the same time, Borrower may prepay one or more of such
Borrowing Tranche(s) on the maturity date of
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the other Borrowing Tranche(s), but only in the event Borrower shall have
previously paid in advance all interest applicable to the Borrowing Tranche(s)
to be prepaid in accordance with the provisions of SECTION 4.3.1.2(iii). One or
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more Base Rate Borrowing Tranches may be converted to a single Fixed Rate
Borrowing Tranche under and pursuant to the terms of SECTION 2.1.1. For all
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purposes hereunder, all Prime Rate fundings shall be aggregated and deemed a
single Borrowing Tranche. The Prime Rate Borrowing Tranche may be converted, in
whole or in part, to (1) a Base Rate Borrowing Tranche subject to the provisions
of SECTION 3.3 or (2) a Fixed Rate Borrowing Tranche subject to the provisions
-----------
of SECTION 2.1.1.
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"Business Day" shall mean any day other than (i) a Saturday or Sunday
------------
or a legal holiday on which either Lender or Servicer is closed for business,
and (ii) in connection with any Loan Request or Renewal Request for a Base Rate
Borrowing Tranche which will accrue interest in part based on the LIBO Rate, any
day in which business is not carried on in the London interbank market.
"Closing Date" shall mean the first date on which both of the
------------
following requirements are met: (i) this Agreement has been fully executed and
(ii) all conditions to closing set forth in SECTION 5.1 hereof shall have been
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satisfied. The closing shall take place on the Closing Date at such 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 first priority 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.
"Collateral Agreements" shall mean (i) 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
(a) agreements establishing a fund to assure the completion of repairs or
improvements specified in any such agreement, or (b) 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, and (ii) 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 (a) at the Closing Date, or
(b) with respect to real estate properties added to the Collateral Pool pursuant
to SECTION 2.9, at or prior to such addition.
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"Collateral Pool", "Collateral Pool Property" and "Collateral Pool
--------------- ------------------------ ---------------
Properties" shall mean, subject to the provisions of SECTION 9.26, the
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multi-family real property or properties, as the case may be, as set forth in
SCHEDULE 1.1(A), together with any multi-family real estate properties which
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have been added to the Collateral Pool and less any real estate properties which
have been released from the Collateral Pool hereunder.
"Collateral Pool Property Documents" shall mean the then current
----------------------------------
versions of the Security Instruments, 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
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documents may be amended from time to time. The Collateral Pool Property
Documents shall include those documents set forth in SCHEDULE 1.1(B).
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"Commitment" shall mean Seventy Million Six Hundred Sixty-Nine
----------
Thousand and NO/100 Dollars ($70,669,000.00), subject to adjustment pursuant to
the provisions of SECTION 2.1.2.
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"Consolidated Adjusted Tangible Net Worth" shall mean at any date (i)
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the sum of (a) the consolidated shareholders equity of the Consolidated Group
(net of Minority Interests) and (b) accumulated depreciation of all real estate
owned to the extent reflected in the then book value of the Consolidated Assets,
less without duplication (ii) the Intangible Assets of the Consolidated Group.
"Consolidated Assets" shall mean the amount set forth on Guarantor's
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then current 10-Q or 10-K filing with the Securities and Exchange Commission, as
the case may be, and listed under the item "Consolidated Assets".
"Consolidated Group" shall mean Guarantor and its consolidated
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subsidiaries, as determined in accordance with GAAP.
"Deemed Minimum Loan Amount" shall mean an amount equal to twenty-five
--------------------------
percent (25%) of the Commitment.
"Dollar", "U.S. Dollars" and the symbol $ shall mean lawful money of
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the United States of America.
"Early Termination Fee" shall have the meaning set forth in SECTION
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2.13.4.1.
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"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.
"Event of Default" shall mean any of the events described in SECTION
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8.1 or otherwise referred to herein as an "Event of Default".
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"Expiration Date" shall mean the later to occur of the Revolving
---------------
Credit Note Expiration Date or the Fixed Rate Note Expiration Date.
"Facility Debt Service" shall mean, for the purposes of this
---------------------
Agreement, the sum of (i) the interest due under the Revolving Credit Note and
any Fixed Rate Notes then outstanding, including any default interest due under
such notes, (ii) an amount equal to one hundred basis points (.01) times the
then outstanding principal balance of the Revolving Credit Note, and (iii) the
amounts payable under SECTION 2.4.5 but exclusive of any voluntary or mandatory
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principal prepayments allowed or required hereunder. Facility Debt Service with
respect to the Revolving Credit Note shall
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be annualized at the time of determination based on the debt service then
accruing under all outstanding Base Rate Borrowing Tranches (notwithstanding the
duration of any Interest Period) and all outstanding Prime Rate Borrowing
Tranches. Facility Debt Service shall be recalculated as of each (a) Loan
Request, (b) Renewal Request, or deemed renewal under SECTION 3.3.3, (c)
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conversion pursuant to SECTION 2.1.1, (d) anniversary of the Closing Date, (e)
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addition or deletion of a property to or from the Collateral Pool and (f)
repayment of any principal portion of the Loan.
"Facility Debt Service Coverage Ratio" shall mean, at the time of
------------------------------------
determination, the then prevailing computation of Net Operating Income of the
Collateral Pool Properties divided by the then prevailing computation of
Facility Debt Service.
"Fixed Rate Borrowing Tranche" shall mean any Borrowing Tranche
----------------------------
evidenced by a Fixed Rate Note. For all purposes hereunder each Fixed Rate Note
shall evidence a single Fixed Rate Borrowing Tranche and each Fixed Rate
Borrowing Tranche shall accrue interest at the rate set forth in the Fixed Rate
Note evidencing such Borrowing Tranche.
"Fixed Rate Note" shall mean, collectively (or individually, as and
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when the context shall require) any Multifamily Note executed in connection with
the provisions of SECTION 2.1.1, evidencing a conversion of the indebtedness
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formerly evidenced by the Revolving Credit Note, to indebtedness evidenced by
and accruing interest at the fixed interest rate set forth in such Multifamily
Note, together with all amendments, extensions, renewals, replacements,
refinancings, refundings or replacements of any such Multifamily Note, in whole
or in part.
"Fixed Rate Note Expiration Date" shall mean the earlier to occur of
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(i) the maturity date of the last maturing Fixed Rate Note or (ii) the date on
which Borrower elects to terminate this Agreement in full or its obligations
under the last remaining Fixed Rate Note pursuant to SECTION 2.13, provided
------------
that, in the instance of item (i), Borrower shall comply with the applicable
provisions of SECTION 2.13.
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"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.
"G-Fee" shall mean (i) with respect to any Base Rate Borrowing Tranche
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hereunder, the applicable percentage set forth in SCHEDULE 3.2 unless (a)
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Guarantor shall not then be in compliance with Guarantor's Financial Covenant or
(b) a Material Adverse Change shall then exist with respect to Guarantor, in
which case the applicable percentage shall be as set forth in SCHEDULE 3.2(A),
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and (ii) with respect to any Fixed Rate Borrowing Tranche, the percentage
attributable to the G-Fee for each Fixed Rate Borrowing Tranche shall be set
forth in Section 23 of the applicable Fixed Rate Note. The G-Fee with respect to
each Base Rate Borrowing Tranche shall be determined and redetermined from time
to time in accordance with SECTION 3.2.1. The G-Fee with respect to each Base
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Rate Borrowing Tranche shall also be subject to repricing prior to any extension
period in accordance with the provisions of SECTION 2.17. The G-Fee may be
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increased as provided in SECTION 4.5.
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"G-Fee Amount" shall mean the product of the applicable G-Fee times
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the principal amount of the then outstanding Borrowing Tranche(s).
"Guarantor" shall mean United Dominion Realty Trust, Inc.
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"Guarantor's Financial Covenant" shall have the meaning set forth in
------------------------------
SECTION 2.16.
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"Guaranty" shall mean that certain Guaranty dated as of the Closing
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Date and executed by Guarantor in favor of Lender, together with any and all
amendments, extensions, renewals or replacements, thereof in whole or in part.
"Guide" shall mean the then current version of the Xxxxxxx Mac
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Multifamily Seller/Servicer's Guide.
"Intangible Assets" shall mean the amount set forth on Guarantor's
-----------------
then current 10-Q or 10-K filing with the Securities and Exchange Commission, as
the case may be, and listed under the item "Intangible Assets".
"Interest Period" shall have the meaning assigned to such term in
---------------
SECTION 3.3.
-----------
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
---------------------
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.
"Law" shall mean any applicable law (including common law),
---
constitution, 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
------
is the holder of the Note, provided that Lender may in its sole discretion
designate Servicer to perform some or all of Lender's obligations under this
Agreement, the Note and the other Loan Documents. Promptly after the initial
closing under this Agreement, GMAC Commercial Mortgage Corporation, the initial
Lender, shall sell the Note to Xxxxxxx Mac and shall assign all of its interests
in this Agreement and the other Loan Documents to Xxxxxxx Mac.
"LIBO Rate" shall mean, with respect to any Borrowing Tranche, the
---------
rate of interest, rounded to the nearest basis point (i.e. one-hundredth of one
percent (.0001)), displayed as of 11:00 a.m. London time on the second Business
Day preceding the first day of the applicable Interest Period on the Bloomberg,
L.P., page "BBAM", as the British Bankers Association ("BBA") LIBO Rate (such
---
page, or such other page as may replace page BBAM on that service, or at the
option of Lender (i) the applicable page on another credible and generally
recognized service which electronically transmits or displays BBA LIBO Rates for
the applicable Interest Period or (ii) any publication of LIBO Rates available
from BBA for the applicable Interest Period, is referred to as the "Designated
----------
Bloomberg Page") for purposes of calculating effective rates of interest for
--------------
loans or 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
-6-
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.
"Lien" shall mean any Security Instrument, 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
----
one time.
"Loan Document" or "Loan Documents" shall mean any or all of this
------------- --------------
Agreement, the Revolving Credit Note, the Fixed Rate Note, if any, 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.
"Loan to Value Ratio" shall mean the product, expressed as a
-------------------
percentage, determined by dividing the Loan by the aggregate of the then current
Market Values of the Collateral Pool Properties.
"Loan Request" shall have the meaning given to such term in SECTION
------------ -------
2.5.
---
"Margin" shall mean the sum of the G-Fee and the Servicing Fee.
------
"Market Value" shall mean as to each individual Collateral Pool
------------
Property, the fair market value of such property, as determined by Lender in its
discretion, as the same shall exist from time to time. The initial Market Values
of each real property which will comprise the Collateral Pool as of the Closing
Date are set forth on SCHEDULE 1.1(A). The Market Value of any Collateral Pool
--------------
Property, including, without limitation, those set forth on SCHEDULE 1.1(A),
--------------
shall be subject to increase or decrease in accordance with the terms and
conditions of this Agreement.
"Material Adverse Change" shall mean any set of circumstances or
-----------------------
events which, in Lender's reasonable discretion would have or is then reasonably
expected to have a material adverse effect on (i) the validity or enforceability
of this Agreement, the Guaranty or the other Loan Documents taken as a whole,
(ii) the ability of Borrower or Guarantor to duly and punctually pay or perform
its Obligations, (iii) the ability of Lender to (a) obtain the benefits of the
Loan, or (b) enforce its legal remedies pursuant to this Agreement or the other
Loan Documents taken as a whole, including, without limitation, by realizing
upon any Collateral or the Guaranty, (iv) the business prospects or financial
condition of Borrower or Guarantor, (v) the business prospects or financial
condition or Market Value of, or the leasing activity with respect to, any
Collateral Pool Property, (vi) the physical condition of any Collateral Pool
Property, or (vii) the compliance of any Collateral Pool Property with any Law.
-7-
"Maximum Facility Available" shall mean, at the time of determination,
--------------------------
the maximum amount which Borrower may borrow under the Revolving Credit Note
without violating the Sublimits set forth in SECTION 2.5.1.
-------------
"Maximum Loan to Value Ratio" shall have the meaning given to such
---------------------------
term in SECTION 2.5.1.1.
-------
"Minimum Servicing Fee" shall mean an amount equal to one-twelfth
---------------------
(1/12th) of the product obtained by (i) an assumed Borrowing Tranche in an
amount equal to the Deemed Minimum Loan Amount times (ii) the Servicing Fee.
"Minority Interests" shall mean any shares of stock (or other equity
------------------
interest) of any class of a subsidiary of Guarantor (other than directors'
qualifying shares as required by law) that are not owned by Guarantor and/or any
wholly owned subsidiary of Guarantor, all as determined in accordance with GAAP.
Minority Interests constituting (i) preferred stock shall be valued at the
voluntary or involuntary liquidation value of such preferred stock, whichever is
greater and (ii) common stock shall be valued at the book value of the
capitalized surplus applicable thereto adjusted by the foregoing method of
valuing Minority Interests in preferred stock.
"Minimum Usage Fee" shall have the meaning set forth in SECTION 2.4.4.
----------------- -------------
"Month" shall mean the appropriate calendar month.
-----
"Monthly Payment Statement" shall have the meaning given to such term
-------------------------
in SECTION 4.2.
-----------
"Mortgage Review Fee" shall mean a non-refundable fee in the amount of
-------------------
Four Thousand and NO/100 Dollars ($4,000.00) per real property.
"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 as of the Closing Date and thereafter no later than July 1/st/ of
each calendar year during the term of this Agreement which is prior to the
Revolving Credit Note Expiration Date, commencing July 1, 2003, 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 capital expense reserve in an amount consistent with Lender's then
current requirements for such capital reserves. In addition, upon the addition
or release of any real property in the Collateral Pool pursuant to the
provisions hereof, Lender shall re-calculate Net Operating Income for the
Collateral Pool as follows: (i) in the
-8-
event of an addition of a real property to the Collateral Pool, Lender shall add
the Net Operating Income of the real property included in the Collateral Pool to
the then current determination of Net Operating Income for the Collateral Pool;
or (ii) in the event of a release of a real property from the Collateral Pool,
Lender shall subtract the Net Operating Income of the real property released
from the Collateral Pool from the then current determination of Net Operating
Income for the Collateral Pool.
"Note" shall mean the Revolving Credit Note and the Fixed Rate Note
----
(if any), individually or collectively, as the context may require.
"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 Note or any other Loan Document,
excluding any Permanent Loan or any other liability of Borrower to Lender not
created under this Agreement, the 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 given to that term 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 2.15.1.
--------------
"Permanent Loan Collateral" shall have the meaning assigned to that
-------------------------
term in SECTION 2.15.1.
--------------
"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;
-9-
(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;
(c) Encumbrances consisting of zoning restrictions, easements or
other restrictions on the use of a real 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 on
----------
the first day of each Month during the term hereof 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.
"Prime Rate Borrowing Tranche" shall mean any Borrowing Tranche which
----------------------------
accrues interest at the Prime Rate.
"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 and is the owner of a real property which has been
proposed to be included in the Collateral Pool, pursuant to the terms hereof.
"Receivables" shall mean any (i) right of payment from or on behalf of
-----------
any obligor, whether constituting an account, chattel paper, instrument, general
intangible or otherwise, arising from the sale or financing by a member or the
Consolidated Group of merchandise or services, and monies due thereunder, (ii)
security in the merchandise and services financed thereby, (iii) records related
thereto, (iv) right to payment of any interest or finance charges and other
obligations with
-10-
respect thereto, (v) proceeds from claims or insurance policies related thereto,
(vi) other proceeds related thereto, and (vii) other related rights.
"Reference Bills(SM)" shall mean the unsecured general obligations of
------------------
Xxxxxxx Mac designated by Xxxxxxx Mac as "Reference Bills(SM)" and issued by
Xxxxxxx Mac at regularly scheduled auctions. In the event Xxxxxxx Mac shall at
any time cease to designate any unsecured general obligations of Xxxxxxx Mac as
"Reference Bills(SM)", Lender shall be permitted to exercise its rights under
SECTION 3.4.
-----------
"Reference Bills(SM) Rate" shall mean, with respect to each Base Rate
------------------------
Borrowing Tranche, the "Money Market Yield" (or any equivalent terms designated
by Lender) applicable to the Reference Bills(SM) (i) having an original maturity
most comparable to the term of the Interest Period for the applicable Borrowing
Tranche and (ii) issued at the most recently conducted regularly scheduled
auction preceding the commencement of the Interest Period for such Borrowing
Tranche, as the same is displayed (a) on the Reference Xxxx Index Page (i.e. the
Xxxxxxx Mac debt securities web page accessed via the Xxxxxxx Mac website at
xxx.xxxxxxxxxx.xxx), or (b) at the option of Lender, in any publication of
Reference Bills(SM) auction results designated by Xxxxxxx Mac. Notwithstanding
any of the foregoing to the contrary, in the event Xxxxxxx Mac shall not have
conducted a regularly scheduled auction of unsecured general obligations within
the sixty (60) day period prior to the first day of the Interest Period for any
Borrowing Tranche requested under SECTIONS 2.5 or 3.3 hereof, the Reference
------------ ---
Bills(SM) Rate shall be deemed to be unascertainable and Lender shall be
permitted to exercise its rights under SECTION 3.4.
-----------
"Renewal Date" shall have the meaning given to such term in SECTION
------------ -------
3.3.3.
-----
"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.
"Required Maturity Date" shall have the meaning set forth in SECTION
---------------------- -------
3.3.2.
-----
"Revolving Credit Note" shall mean the Multifamily Note of Borrower,
---------------------
in the initial maximum principal amount of the Commitment, which evidences the
Base Rate and Prime Rate Borrowing Tranches, together with all amendments,
extensions, renewals, replacements, refinancings, refundings or replacements
thereof in whole or in part. The G-Fee applicable to any Base Rate Borrowing
Tranche shall be subject to repricing prior to any extension period in
accordance with the provisions of SECTION 2.17.
------------
"Revolving Credit Note Expiration Date" shall mean the earlier to
-------------------------------------
occur of (i) the maturity date of the Revolving Credit Note (which date shall be
the fifth (5/th/) anniversary of the Closing Date or in the event Borrower shall
exercise the extension option pursuant to the provisions of SECTION 2.17, the
------------
ninth (9/th/) anniversary of the Closing Date) or (ii) the date on which
Borrower elects to terminate its obligations under the Revolving Credit Note or
this Agreement pursuant to SECTION 2.13, provided that Borrower shall comply
------------
with the applicable provisions of SECTION 2.13.
------------
-11-
"Securitization Transaction" shall mean any financing transaction or
--------------------------
series of financing transactions that have been or may be entered into by a
member or the Consolidated Group pursuant to which such member of the
Consolidated Group may (i) sell, convey or otherwise transfer to a Subsidiary or
Affiliate or any other Person, or (ii) grant a security interest in, and
Receivables or interest therein secured by merchandise or services financed
thereby (whether such Receivables are then existing or arising in the future) of
such member of the Consolidated Group, and any assets related thereto,
including, without limitation, all security interests in merchandise or services
financed thereby, the proceeds of such Receivables, and other assets which are
customarily sold or in respect of which security interests are customarily
granted in connection with securitization transactions involving such assets.
"Security Instrument" shall mean any mortgage, deed of trust, or deed
-------------------
to secure debt securing any of the Collateral Pool Properties.
"Seismic Report Fee" shall mean a nonrefundable fee equal to Lender's
------------------
out-of-pocket costs and expenses incurred in connection with obtaining a seismic
report with respect to any real property for which Lender, in its discretion,
deems such report necessary.
"Servicer" shall mean GMAC Commercial Mortgage Corporation, or any
--------
subsequent independent contractor appointed by Lender, at Lender's sole cost and
expense, to administer the Loan 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 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 Note and the other Loan
Documents.
"Servicing Fee" shall mean a fee of seven basis points (.0007).
-------------
"Servicing Fee Payment" shall mean the product of the Servicing Fee
---------------------
times the principal amount of the Borrowing Tranche(s) then outstanding.
"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
-12-
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 2.5.1.
-------------
"Subsidiary"
----------
"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 6.1.13.
--------------
"Unused Facility Fee" shall have the meaning assigned to that
-------------------
term in SECTION 2.4.3.
-------------
"Valuation" shall have the meaning set forth in SECTION 2.12.
--------- ------------
"Wholly Owned Subsidiary"
-----------------------
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
-13-
shall be deemed to mean such requirements, programs and the like as are then
standard in the secondary multifamily mortgage industry, as such standards are
generally reflected in the Guide;
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 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 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.
1.3. Accounting Principles.
---------------------
-14-
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 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. CREDIT FACILITY
---------------
2.1. Lender's Commitment.
-------------------
Subject to the terms and conditions hereof and relying upon
the representations and warranties set forth herein, Lender agrees to (i)
advance to Borrower up to Seventy Million Six Hundred Sixty-Nine Thousand and
NO/100 Dollars ($70,669,000.00) under and pursuant to the Revolving Credit Note
at any time or from time to time during the term hereof and (ii) permit Borrower
to convert a portion of the indebtedness evidenced by the Revolving Credit Note
to one or more Fixed Rate Notes, provided that after giving effect to any
particular advance and/or conversion the Loan amount outstanding at any one time
shall not exceed the amount which would be permitted to be outstanding under the
Sublimits as the same may be constituted from time to time. Within such limits
of time and amount and subject to the other provisions of this Agreement,
Borrower may borrow, repay and reborrow with respect to the Revolving Credit
Note pursuant to this SECTION 2.1. All advances under this Agreement, the
-----------
Revolving Credit Note and any Fixed Rate Note constitute a single indebtedness,
and all of the Collateral is security for the Revolving Credit Note, any and all
Fixed Rate Notes then outstanding and for the performance of all of the
Obligations.
2.1.1. Conversion of Indebtedness.
--------------------------
2.1.1.1. Procedure for Proposing a Conversion.
------------------------------------
Borrower shall have the right from time to time prior to the
date which is one hundred and eighty (180) days prior to the Revolving Credit
Note Expiration Date, to request that Lender convert a portion of the
indebtedness evidenced by the Revolving Credit Note to indebtedness evidenced by
a Fixed Rate Note. Borrower shall exercise such right by submitting a written
request therefor to Servicer at any time prior to the date which is one hundred
and eighty (180) days prior to the Revolving Credit Note Expiration Date, which
request shall include or be accompanied by, as the case may be, (i) the proposed
conversion amount, which amount shall not be less than Three Million and NO/100
Dollars ($3,000,000.00), (ii) the maturity date with respect to the Fixed Rate
Note which will evidence the Fixed Rate Borrowing Tranche to be created as a
result of such proposed conversion, which maturity date shall be either the
fifth (5th), seventh (7th) or tenth (10th) anniversary of (a) the date of
execution and delivery of
-15-
such Fixed Rate Note to Lender, in the event such date is the first (1st) day of
any Month or (b) the first (1st) day of the Month following the date of
execution and delivery of such Fixed Rate Note to Lender, in the event such date
is any date other than the first (1st) day of such Month, (iii) in the event
such request shall be made (a) on or prior to the first (1st) anniversary of the
Closing Date, rent rolls for each Collateral Pool Property certified by an
Authorized Officer of Borrower as representing the true and complete leasing
status of each Collateral Pool Property as of a date not more than thirty (30)
days prior to the date of such request and (b) after the first (1st) anniversary
of the Closing Date, the Underwriting Materials, a Mortgage Review Fee and a
Seismic Report Fee (if and as applicable), all with respect to each Collateral
Pool Property, and (iv) that portion, if any, of the conversion amount to be
comprised of a new advance under this Agreement and that portion, if any, of the
conversion amount to be comprised from the deemed repayment of any then existing
Base Rate Borrowing Tranche(s). Any and all Mortgage Reviews and Seismic Report
Fees paid pursuant to this SECTION 2.1.1.1 shall be deemed earned upon delivery
---------------
thereof, whether or not the conversion requested by Borrower is actually
consummated pursuant to the provisions hereof.
2.1.1.2. Procedure for Effectuating a Conversion.
---------------------------------------
Upon receipt of Borrower's request pursuant to SECTION
-------
2.1.1.1, Lender will in good faith consider and evaluate the same in accordance
-------
with Lender's then current underwriting requirements and use its best efforts to
quote Borrower an interest rate in writing with respect to the indebtedness that
Borrower has requested to be converted to a Fixed Rate Note within (i) ten (10)
days of receipt of such request and all deliverables required under SECTION
-------
2.1.1.1., in the event such request and deliverables are received on or prior to
-------
the first (1st) anniversary of the Closing Date and (ii) thirty (30) days of
receipt of such request and all deliverables required under SECTION 2.1.1.1, in
---------------
the event such request and deliverables are received after the first (1st)
anniversary of the Closing Date. Borrower shall accept such interest rate quote
by delivering to Servicer within seven (7) days of Borrower's receipt of such
interest rate quote (a) a good faith deposit of three percent (3.0%) of the
requested conversion amount by wire transfer of immediately available funds to
an account specified by Servicer and (b) written notice of its intent to accept
such interest rate quote in form and substance acceptable to Lender; thereafter,
Borrower shall proceed to consummate the subject conversion within one hundred
and twenty (120) days after the date of Borrower's delivery of both the deposit
and notice specified in (a) and (b) above (and in all events prior to the
Revolving Credit Note Expiration Date) by performing each of the following: (1)
paying to Servicer (A), in all events, the reasonable costs and expenses that
Lender and Servicer incur in connection with such conversion and (B), in the
event of a conversion for which Borrower submitted a request after the first
(1st) anniversary of the Closing Date, a transaction fee in an amount equal to
the product of ten basis points (.0010) times the amount of indebtedness which
Borrower has requested to be converted, and (2) submitting (A) any amendments to
this Agreement and any of the other Loan Documents, as Lender deems necessary,
in form and substance acceptable to Lender, executed and where appropriate
acknowledged by Borrower, (B) a new Fixed Rate Note in substantially the same
form as set forth in SCHEDULE 2.1.1, evidencing a Fixed Rate Borrowing Tranche
--------------
in the amount of the indebtedness converted pursuant to Borrower's request,
accruing interest at the interest
-16-
rate quoted by Lender and maturing on the date specified by Borrower in its
request under SECTION 2.1.1.1, which Fixed Rate Note shall specify the G-Fee
---------------
attributable to such Fixed Rate Borrowing Tranche and (C) any other amendments
or agreements deemed necessary by Lender to evidence the transactions
contemplated herein. Notwithstanding any of the foregoing to the contrary, in
the event of a request for conversion received after the first (1st) anniversary
of the Closing Date, Lender shall have the right to withdraw or revise its
interest rate quote, in its discretion, by written notice dated within thirty
(30) days of Borrower's delivery of both the good faith deposit and notice
discussed in (a) and (b) above, in the event such notice shall indicate that
Lender has (x) revised its interest rate quote Borrower shall either (I) accept
the revised interest rate quote set forth in Lender's notice by written notice
delivered to Servicer within seven (7) days of the date of Lender's notice and
thereafter proceed to consummate the requested conversion by performing the
requirements set forth in (1) and (2) above (within the timeframes set forth in
the preceding sentence, with the one hundred and twenty (120) day period set
forth therein commencing as of the date of Borrower's notice of acceptance of
such revised interest rate) or (II) deliver notice to Servicer of its rejection
of such revised interest rate quote within seven (7) days of receipt of the
same, in which event Borrower's request for conversion shall automatically
terminate and Lender shall thereafter refund to Borrower the good faith deposit
discussed in (a) above or (y) withdrawn its interest rate quote, Borrower's
request for a conversion shall be deemed terminated and Lender shall thereafter
refund to Borrower the good faith deposit discussed in (a) above. In the event
Borrower fails to perform any of the acts, pay any of the fees or to submit any
of the documents and evidence described in (1) and (2) above, together with any
updates to the Underwriting Materials reasonably requested by Lender, within the
timeframes set forth above and in all events prior to the Revolving Credit Note
Expiration Date, Lender may, at any time and at its sole option, withdraw its
interest rate quote, terminate Borrower's request for a conversion and retain
the good faith deposit discussed in (a) above. In the event (X) Borrower
performs all of the acts, pays all the fees and submits all of the documents and
evidence described in (1) and (2) above, and submits any updates to the
Underwriting Materials reasonably requested by Lender within such time period
and (Y) no Event of Default, Potential Default or Material Adverse Change shall
then exist or shall result as a consequence of such conversion (and in the
instance of an Event of Default or Potential Default based on Borrower's failure
to comply with any of the Sublimits, Borrower shall have failed to cure such
non-compliance prior to the date of the proposed conversion by either (AA)
pledging collateral in form, substance, value and in a manner all acceptable to
Lender, in its sole discretion, or (BB) prepaying so much of the Revolving
Credit Note and/or any Fixed Rate Notes then outstanding, as is necessary to
cause compliance with the Sublimits, each in accordance the provisions of
SECTION 4.3.2), the proposed conversion shall become effective as of the date
-------------
each of the requirements set forth in (1) and (2) above are met and Borrower's
good faith deposit discussed in (a) above shall thereafter be refunded to
Borrower. In such event, the amount of such conversion, if any, comprised by the
advance of amounts permitted under the terms of this Agreement but not
previously advanced shall be disbursed to Borrower on the next available
Borrowing Date.
2.1.2. Increases in the Commitment.
---------------------------
-17-
Borrower shall have the one-time right to request an increase
in the amount of the Commitment and the corresponding maximum principal amount
of the Revolving Credit Note to an amount up to, but not exceeding, Seventy-Two
Million and NO/100 Dollars ($72,000,000.00), which right shall be exercised, if
at all, prior to the first (1st) anniversary of the Closing Date by delivering
to Lender (i) a written request therefor and (ii) evidence acceptable to Lender
in its sole discretion that the Market Value of the Collateral Pool has
increased beyond the initial Market Value thereof. Upon receipt of such request
and evidence, Lender will in good faith consider and evaluate the same in
accordance with Lender's then current underwriting requirements. Borrower hereby
acknowledges that any resultant increase shall be conditioned upon the following
(among other things): (a) Borrower's payment to Lender of (1) a transaction fee
in an amount equal to the product of seventy-five basis points (.0075) times the
resultant increase in the amount of the Commitment and (2) all reasonable costs
and expenses that Lender or Servicer incur in connection with the increase in
the amount of the Commitment and the corresponding increase in the maximum
principal amount of the Revolving Credit Note, including, but not limited to,
attorney's fees, and (b) Borrower's submission of (1) amendments to this
Agreement, the Revolving Credit Note, the Guaranty and any of the other Loan
Documents, as Lender deems necessary, in form and substance acceptable to
Lender, executed and where appropriate acknowledged by Borrower, evidencing the
increase in the Commitment and the corresponding increase in the maximum
principal amount of the Revolving Credit Note, and (2) any other amendments or
agreements deemed necessary by Lender, including, but not limited to, amendments
to the applicable title insurance policy(ies) increasing the amount of coverage
provided thereunder.
2.2. Term.
----
The term of the Loan shall commence on the Closing Date and terminate
on the Expiration Date unless otherwise terminated earlier pursuant to the
provisions hereof.
2.3. 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 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 additional advance hereunder (i) on account of any existing Fixed Rate
Borrowing Tranche or (ii) on account of the Revolving Credit Note on or after
the Business Day next preceding the Revolving Credit Note Expiration Date. While
a Potential Default, Event of Default or Material Adverse Change exists, Lender
may refuse to make any additional advances to Borrower.
2.4. Fees.
----
For informational purposes only, attached as SCHEDULE 2.4 to
------------
this Agreement is a chart detailing certain of the fees payable under this
Agreement. The chart set forth in SCHEDULE 2.4 shall in no way limit the
------------
provisions of this Agreement, including, without limitation, the provisions set
forth in this SECTION 2.4. In the event of any conflict between the
-----------
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information set forth in SCHEDULE 2.4 and any other provisions of this
------------
Agreement, including, without limitation, the provisions set forth in this
SECTION 2.4, such other provisions shall prevail.
-----------
2.4.1. Fees Paid Prior to the Closing Date.
-----------------------------------
Lender acknowledges that, in addition to Borrower's
obligations under SECTION 5.1.6, Borrower has paid to Lender, as consideration
-------------
for Lender's costs in underwriting the transaction contemplated hereby, a
Mortgage Review Fee and a Seismic Report Fee, if and as applicable, for each
real property described at SCHEDULE 1.1(A) and proposed by Borrower to be
--------------
included in the Collateral Pool on the Closing Date.
2.4.2. Fees Due on the Closing Date.
----------------------------
Borrower shall pay to Lender on the Closing Date
(simultaneously with the closing of the Loan), as further consideration for
Lender's cost in underwriting the Commitment, a non-refundable transaction fee
in the amount of Five Hundred Thirty Thousand Seventeen and 50/100 Dollars
($530,017.50), of which Seventy-Five Thousand Seven Hundred and NO/100 Dollars
($75,700.00) has been previously deposited with Lender.
2.4.3. Unused Facility Fee.
--------------------
Accruing from the Closing Date until the Revolving Credit Note
Expiration Date, Borrower agrees to pay to Lender, as consideration for Lender's
commitment to advance funds under the Revolving Credit Note, a nonrefundable
unused facility fee (the "Unused Facility Fee") equal to twelve basis points
-------------------
(.0012) 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 greater of (a) the Deemed Minimum Loan Amount or
(b) the sum of the principal amount of all Base Rate and Prime Rate Borrowing
Tranches then outstanding. All Unused Facility Fees shall be payable monthly in
arrears on each Payment Date and shall be set forth on the applicable Monthly
Payment Statement. Unused Facility Fee payments which cover less than one (1)
month shall be prorated based on the actual number of days elapsed. Any accrued
but unpaid Unused Facility Fees shall also be due and payable on the Revolving
Credit Note Expiration Date.
2.4.4. Minimum Usage Fee.
-----------------
The fee payable under this SECTION 2.4.4 shall only apply in
-------------
the event that the Loan amount outstanding shall, at any time, be less than the
Deemed Minimum Loan Amount. Accruing from the Closing Date until the Revolving
Credit Note Expiration Date, Borrower agrees to pay to Lender, as further
consideration for Lender's commitment hereunder, a nonrefundable minimum usage
fee (the "Minimum Usage Fee") equal to the product obtained by (i) an assumed
-----------------
Base Rate Borrowing Tranche in an amount equal to the Deemed Minimum Loan Amount
times (ii) the lowest G-Fee shown on SCHEDULE 3.2 or SCHEDULE 3.2(A), whichever
------------ --------------
is currently applicable, provided that the Minimum Usage Fee shall be due and
payable only if, and to the extent that, the foregoing calculation results in an
amount which is greater than the sum of the G-Fee Amounts actually paid by
Borrower on all Borrowing Tranches outstanding during the same computation
period. The Minimum Usage Fee, if applicable, shall be computed for each
calendar year, or part thereof, during
-19-
the term of the Revolving Credit Note and shall be payable, if at all, annually
in arrears on the Payment Date scheduled for January of each year of the term of
the Revolving Credit Note, provided that any Minimum Usage Fee due in the year
in which the Revolving Credit Note Expiration Date falls shall be due and
payable on the Revolving Credit Note Expiration Date. Minimum Usage Fee payments
which cover a period of less than one (1) calendar year shall be prorated based
on the actual number of days elapsed. Any accrued but unpaid Minimum Usage Fees
shall also be payable on the Revolving Credit Note Expiration Date.
2.4.5. Minimum Servicing Fee.
---------------------
To the extent Servicer has not otherwise received for any
Month during the term of the Revolving Credit Note, a Servicing Fee Payment at
least equal to the Minimum Servicing Fee (including, but not limited to, those
instances where Borrower has repaid the outstanding principal balance of the
Revolving Credit Note under SECTION 2.11), Borrower agrees to pay to Servicer an
------------
amount equal to the difference between the Minimum Servicing Fee and the
Servicing Fee Payment otherwise due with respect to such Month. The Minimum
Servicing Fee, if any, shall be payable hereunder monthly in arrears on each
Payment Date. Minimum Servicing Fee payments which cover a period of less than
one (1) Month shall be prorated based on the actual number of days elapsed. Any
accrued but unpaid Minimum Servicing Fee shall also be payable on the Revolving
Credit Note Expiration Date. Notwithstanding the characterization assigned to
the payments under this SECTION 2.4.5, such payment obligation shall be deemed
-------------
interest payable under this Agreement for the purpose of calculating the
Facility Debt Service Coverage Ratio.
2.5. Loan Requests under the Revolving Credit Note.
---------------------------------------------
Except as otherwise provided herein, Borrower may from time to
time prior to the Revolving Credit Note Expiration Date request Lender to make
an advance under the Revolving Credit Note to the extent of the Maximum Facility
Available less the outstanding principal balance of all Base Rate and Prime Rate
Borrowing Tranches then outstanding, by delivering to Lender via facsimile, a
request therefor (a "Loan Request") fully completed, authorized and executed by
-----------
Servicer and an Authorized Officer of Borrower, all in the form attached hereto
as SCHEDULE 2.5. Borrower may at any one time submit one (1) 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 2.6); (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); and (iii) in the case of a
Loan Request for a Base Rate Borrowing Tranche, (a) the Interest Period for
purposes of determining the Reference Bills(SM) Rate (or such alternative index
as may be selected by Lender in accordance with the provisions of SECTION 3.4);
-----------
and (b) the Base Rate, including the Reference Bills(SM) Rate (or such
alternative index as may be selected by Lender in accordance with the provisions
of SECTION 3.4) and Margin that comprise such Base Rate.
-----------
2.5.1. Sublimits.
---------
-20-
Notwithstanding anything to the contrary set forth herein,
Borrower may borrow hereunder only to the extent that after giving effect to
such borrowing:
2.5.1.1. prior to the Revolving Credit Note Expiration
Date, the Loan to Value Ratio shall not exceed seventy percent (70%) (the
"Maximum Loan to Value Ratio");
---------------------------
2.5.1.2. prior to the Revolving Credit Note Expiration
Date, the Facility Debt Service Coverage Ratio shall not be less than 1.60 :
1.00;
2.5.1.3. the number of Borrowing Tranches outstanding shall
not exceed fifteen (15);
2.5.1.4. the Loan shall not exceed the Commitment; and
2.5.1.5. the sum of the outstanding principal balance of
all Fixed Rate Notes , if any are then outstanding, shall at all times be Three
Million and NO/100 Dollars ($3,000,000.00) less than the Commitment.
Notwithstanding the foregoing, in the event the Facility Debt
Service Coverage Ratio is less than 1.60 : 1.00 at any time prior to the
Revolving Credit Note Expiration Date, Borrower shall be entitled to renew or
consolidate (but not increase the outstanding principal amount of) such existing
outstanding Base Rate Borrowing Tranches or convert the Prime Rate Borrowing
Tranche, if then outstanding, to a Base Rate Borrowing Tranche with an Interest
Period of thirty (30) days, provided that, (i) as of the date of such renewal or
consolidation (a) no Event of Default, Potential Default or Material Adverse
Change, other than Borrower's failure to comply with SECTION 2.5.1.2, shall then
---------------
exist, (b) Borrower's failure to comply with SECTION 2.5.1.2 shall have been for
---------------
a period of less than ninety (90) days and (c) Borrower is otherwise in full
compliance with all other terms and conditions of the Loan Documents and (ii)
throughout the period of Borrower's non-compliance with the SECTION 2.5.1.2,
---------------
Borrower complies with the provisions of SECTION 4.5. Borrower may assure
-----------
compliance with SECTION 2.5.1.2 pursuant to the mandatory prepayment/collateral
---------------
pool addition provisions of SECTION 4.3.2.
-------------
2.6. Borrowing Tranches.
------------------
After receipt by Lender of a Loan Request pursuant to SECTION
-------
2.5, and subject to the Sublimits of Section 2.5.1 and the provisions of SECTION
--- -------
5.2, Lender, relying on the truth and accuracy of the matters set forth in the
---
Loan Request (but without any obligation to inquire into the truth and accuracy
of such matters), 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 be the Business Day set forth in the Loan Request,
provided that such date is at least two (2) but not more than five (5) Business
Days after the date of the Loan Request. Lender shall fund the amounts requested
in any Loan Request by 3:00 p.m. Eastern Time on the Borrowing Date.
2.7. The Note.
--------
-21-
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 and any Fixed Rate Notes then outstanding, all
payable to the order of Lender.
2.8. Use of Proceeds.
---------------
The proceeds of the Loan may be used for any lawful purpose,
as may be limited by Borrower's organizational documents.
2.9. Additions to the Collateral Pool.
--------------------------------
2.9.1. Procedure for Proposing a Real Property Addition
-----------------------------------------------
to the Collateral Pool.
----------------------
Borrower or Proposed Borrower, as the case may be, may propose
to add one or more multi-family real properties to the Collateral Pool by
delivering to Lender (i) a written proposal for addition of the proposed real
property(ies), (ii) a Mortgage Review Fee for each proposed real property, (iii)
a Seismic Report Fee, if and as applicable, for each proposed real property and
(iv) 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 Mortgage Review Fee, the Seismic Report Fee, if and
as applicable, 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 multi-family real property for addition to 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
added to the Collateral Pool. Both the Mortgage Review Fee and the Seismic
Report Fee, if any, shall be deemed earned upon delivery thereof, whether or not
Lender approves or disapproves such real property for addition hereunder.
Borrower shall pay all reasonable costs and expenses that Lender and Servicer
incur in connection with any such proposal to add a real property to the
Collateral Pool, including, but not limited to, attorney's fees and any costs
and expenses incurred with respect to third party reports, whether or not Lender
approves or disapproves such real property for addition hereunder.
2.9.2. Procedure for Adding a Real Property to the
-------------------------------------------
Collateral Pool.
---------------
2.9.2.1. With respect to any multi-family real
property that Borrower or Proposed Borrower, as the case may be, proposes for
addition to 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 addition to the Collateral Pool,
and in the event that Lender accepts the proposed real property for addition to
the Collateral Pool, Lender shall use its best efforts to add such real property
to 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
obligations listed under SECTION 2.9.2.2. Notwithstanding anything contained
---------------
herein to the contrary, no real property shall be
-22-
submitted for addition which (i) will yield an Additional Collateral
Facility (to be determined by Lender in accordance with its underwriting
policies and procedures) of less than Five Million and NO/100 Dollars
($5,000,000.00) or (ii) is not fully stabilized and rehabilitated. 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
add the real property to the Collateral Pool, unless Lender, in its sole
discretion, shall opt to extend such thirty (30) day period. If Lender provides
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 (unless Lender, in its sole discretion,
shall opt to extend such forty-five (45) day cure period), provided that any
such termination shall not prevent Borrower or Proposed Borrower from
subsequently resubmitting a real property (together with a Mortgage Review Fee,
a Seismic Report Fee, if and as applicable, and the Underwriting Materials) for
addition to the Collateral Pool, and further provided that Borrower may not
resubmit the same real property for addition to the Collateral Pool more often
than one (1) time in any twelve (12) month period. Notwithstanding anything
contained in the foregoing to the contrary, under no circumstances shall the
addition of any real property increase (a) the amount which may be borrowed
under any Fixed Rate Note under any circumstances, or (b) the amount which may
be borrowed under the Revolving Credit Note beyond the maximum principal amount
of the Revolving Credit Note or the amount permitted in accordance with the
Sublimits, whichever is lower.
2.9.2.2. If and upon the date of acceptance by
Lender of a multi-family real property submitted for addition to the Collateral
Pool (such acceptance to be in writing, together with Lender's determination of
the initial 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, prior to such addition, Borrower or Proposed
Borrower shall (i) pay the Addition Fee pursuant to SECTION 2.9.3, (ii) pay all
-------------
costs and expenses that Lender and Servicer incur in connection with the
inclusion of such real property, including, but not limited to, attorney's fees,
(iii) submit the following to Lender: (a) all Collateral Pool Property Documents
requested by Lender, including, without limitation, a reaffirmation of the
Guaranty, fully executed and where appropriate duly acknowledged and filed of
record in the appropriate official public records, (b) 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 applicable Security Instrument, (c) evidence satisfactory to Lender that,
subject to the Permitted Exceptions (1), in the case of personal property, the
Lien constitutes a first priority security interest in favor of Lender and (2),
in the case of real property, the Security Instrument 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 (d) an opinion of counsel acceptable to Lender and (iv) in the
case of a Proposed Borrower, such Proposed Borrower shall execute (a) separate
allonges to the Revolving Credit Note and any Fixed Rate Notes then outstanding
and (b) a joinder agreement, both of which shall be in form and substance
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
-23-
listed under (i), (ii), (iii) and (iv) above together with any and all
updates to the Underwriting Materials reasonably requested by Lender within
forty-five (45) days of the date of Lender's acceptance, Lender may at its
option reject the proposed real property and terminate such proposal. In the
event that Borrower or Proposed Borrower performs all of the acts and submits
all of the documents and evidence listed in (i), (ii), (iii) and (iv) above
within forty-five (45) days of the date of Lender's acceptance, the proposed
real property shall be added to the Collateral Pool.
2.9.3. Addition Fee.
------------
Borrower shall pay a fee (the "Addition Fee") equal to fifteen
------------
basis points (.0015) of the Additional Collateral Facility of any real property
added to the Collateral Pool. The Addition Fee shall be due and payable upon
consummation of the addition of the proposed real property into the Collateral
Pool.
2.10. Release of Collateral.
---------------------
Prior to the Revolving Credit Note Expiration Date, Lender
shall, upon thirty (30) days advance written notice, release the Liens granted
hereunder with respect to a Collateral Pool Property or Properties which
constitute(s) less than all Collateral Pool Properties, provided that (i) prior
to such release Borrower shall pay (a) Lender a release fee of Five Thousand and
NO/100 Dollars ($5,000.00) per each property to be released and (b) Lender and
Servicer, respectively, all costs and expenses that Lender and Servicer incur in
connection with such release, including, but not limited to, attorneys' fees,
(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 shall be in
compliance with all provisions hereof, further provided that if such release
would otherwise cause Borrower to be in non-compliance with the Sublimits set
forth in SECTION 2.5.1, Borrower shall have the opportunity to cure the same
-------------
prior to or simultaneously with such release by either (1) pledging collateral
in form, substance, value and in a manner all acceptable to Lender, in its sole
discretion, or (2) prepaying so much of the Revolving Credit Note and/or any
Fixed Rate Notes then outstanding, as is necessary to cause compliance with the
Sublimits, all in accordance with the provisions of SECTION 4.3.2.
-------------
Notwithstanding such thirty (30) day time period to obtain a release, Lender
shall upon five (5) 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.
Notwithstanding any of the foregoing to the contrary, under no circumstances may
Borrower receive a release of the Security Instrument with respect to the last
property in the Collateral Pool unless Borrower has elected to terminate this
Agreement in accordance with SECTION 2.13.3.
--------------
2.11. Payment of the Loan Balance Without Termination.
-----------------------------------------------
Prior to the Revolving Credit Note Expiration Date, Borrower
shall have the right to repay (i) the entire Loan (i.e., the Revolving Credit
Note and any Fixed Rate Notes then outstanding), (ii) the entire principal
balance of the Revolving Credit Note or (iii) the entire principal balance of
-24-
any or all Fixed Rate Notes then outstanding, subject in each instance to the
provisions of SECTION 4.3, all without any release of any Lien, and subsequently
-----------
re-borrow under the Revolving Credit Note (but not any prepaid or redeemed Fixed
Rate Note, provided that, Borrower may subsequently convert any portion of the
indebtedness evidenced by the Revolving Credit Note to a Fixed Rate Note
pursuant to SECTION 2.1.1), provided that Borrower is at such time, and
-------------
thereafter remains, in compliance with the provisions of this Agreement,
including, without limitation, the obligations to pay all fees due and payable
hereunder. Under no circumstances shall Borrower be entitled to any additional
advances or re-advances under (a) any Fixed Rate Note or (b) the Revolving
Credit Note on or after the Revolving Credit Note Expiration Date.
2.12. Valuations.
----------
2.12.1. Timing and Procedure of Valuation.
---------------------------------
In addition to any other provisions requiring valuations
hereunder, Lender shall perform, in accordance with its then current
underwriting policies, practices and procedures consistently applied, an annual
valuation (the "Valuation") to determine the then Market Value of each of the
---------
Collateral Pool Properties as of January 1st of each year, which Valuation shall
be performed no later than July 1st of each calendar year during the term of the
Revolving Credit Note commencing July 1, 2003. In connection with such
Valuation, Borrower shall deliver to Servicer, within the first ninety (90) days
of the applicable calendar year, a current rent roll and a twelve (12) month
operating statement with respect to each Collateral Pool Property, which
operating statement shall relate to the operations of the applicable Collateral
Pool Property during the immediately preceding calendar year. Each operating
statement and/or rent roll required to be provided pursuant to the terms of this
SECTION 2.12.1 shall be in such form and contain such detail as Servicer or
--------------
Lender may reasonably require.
2.12.2. Valuations that Disclose a Decrease in Market
---------------------------------------------
Value.
If any Valuation discloses that the Market Value of the
Collateral Pool has decreased below the then current Market Value thereof and
such Valuation shall cause Borrower to be in non-compliance with the Sublimits
set forth in SECTION 2.5.1, 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) pledging collateral in form, substance, value
and in a manner all acceptable to Lender in its sole discretion, or (ii)
prepaying so much of the Loan as is necessary to cause compliance with the
Sublimits, each in accordance with the provisions of SECTION 4.3.
-----------
2.13. Early Termination Rights.
------------------------
2.13.1. Borrower's Right to Terminate the Revolving Credit
--------------------------------------------------
Note.
Borrower shall have the right to terminate Borrower's
obligations under the Revolving Credit Note at any time prior to the maturity
date of the Revolving Credit Note (as the same may be extended), provided that
Borrower (i) delivers to Lender thirty (30) days advance written notice of its
irrevocable election to terminate such obligations specifying the Revolving
Credit Note Expiration Date, (ii) repays all accrued interest on, and principal
with respect to, the
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then outstanding Base Rate and Prime Rate Borrowing Tranches in full and (iii)
performs all Obligations under this Agreement and the Revolving Credit Note,
including, but not limited to, Borrower's obligations to pay all fees specified
in SECTION 2.13.4.
--------------
2.13.2. Borrower's Right to Terminate any Fixed Rate Note.
-------------------------------------------------
Borrower shall have the right to terminate Borrower's obligations
under any Fixed Rate Note, provided that Borrower (i) delivers to Lender thirty
(30) days advanced written notice of its irrevocable election to terminate such
obligations specifying the Fixed Rate Note Expiration Date, (ii) repays all
accrued interest on, and principal with respect to, such Fixed Rate Note in full
and (iii) performs all Obligations under this Agreement and the applicable Fixed
Rate Note, including, but not limited to, Borrower's obligations to pay all fees
specified in SECTION 2.13.4.
--------------
2.13.3. Borrower's Right to Terminate the Agreement.
-------------------------------------------
Borrower shall have the right to terminate this Agreement in full and
the parties' obligations under the Loan Documents at any time, provided that
Borrower (i) delivers to Lender thirty (30) days advance written notice of its
irrevocable election to terminate this Agreement specifying the Expiration Date
(which must be the same date for any Fixed Rate Notes then outstanding and the
Revolving Credit Note), (ii) repays all accrued interest on, and principal with
respect to, the Loan in full and (iii) performs all Obligations under this
Agreement, the Note and the other Loan Documents, including, but not limited to,
Borrower's obligation to pay all fees specified in SECTION 2.13.4. In the event
--------------
Borrower has complied with the requirements set forth in this SECTION 2.13.3,
--------------
Lender shall release the Liens granted hereunder on the Expiration Date in
accordance with SECTION 2.10.
------------
2.13.4. Fees Due Upon Early Termination.
-------------------------------
2.13.4.1. In the event Borrower shall terminate Borrower's
obligations under the Revolving Credit Note pursuant to the provisions of
SECTION 2.13.1, prior to the maturity date of the Revolving Credit Note (as the
--------------
same may be extended), Borrower shall pay (i) a Prepayment Fee with respect to
each outstanding Base Rate Borrowing Tranche calculated in accordance with
SECTION 4.4, (ii) an early termination fee (the "Early Termination Fee") equal
----------- ---------------------
to one percent (1.0%) of the maximum principal amount of the Revolving Credit
Note and (iii) all accrued and unpaid fees due hereunder, including, without
limitation, all accrued and unpaid Unused Facility Fees, Minimum Usage Fees and
Minimum Servicing Fees.
2.13.4.2. In the event Borrower shall terminate Borrower's
obligations under a Fixed Rate Note pursuant to the provisions of SECTION 2.13.2
--------------
prior to its stated maturity date, Borrower shall pay a Prepayment Fee
calculated in accordance with SECTION 4.4.
-----------
2.13.4.3. In the event Borrower shall terminate this Agreement
in full and the parties' obligations under the Loan Documents pursuant to the
provisions of SECTION
-------
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2.13.3, Borrower shall pay (i) a Prepayment Fee with respect to each Fixed Rate
-------
Note then outstanding calculated in accordance with SECTION 4.4, and (ii) the
-----------
fees due under SECTION 2.13.4.1, in the event Borrower shall elect an Expiration
----------------
Date which is prior to the maturity date of the Revolving Credit Note (as the
same may be extended).
2.13.4.4. Notwithstanding any of the foregoing to the
contrary, in the event all of the real properties comprising the Collateral Pool
as of the Closing Date are refinanced pursuant to the provisions of SECTION 2.15
------------
hereof, then in such event Borrower shall not be responsible for the payment of
any Early Termination Fee otherwise due and payable pursuant to the provisions
of this SECTION 2.13.
------------
2.14. Material Adverse Change.
-----------------------
If (i) Borrower, Guarantor or a Collateral Pool Property experiences
a Material Adverse Change or (ii) a Material Adverse Change occurs with respect
to this Agreement, the Guaranty or the other Loan Documents taken as a whole,
Borrower shall promptly notify Lender of the same in writing. If, prior to the
Revolving Credit Note Expiration Date, Lender shall receive notice of a Material
Adverse Change in accordance with the preceding sentence, or otherwise becomes
aware of a Material Adverse Change, which Material Adverse Change affects a
Collateral Pool Property, Lender shall promptly conduct a Valuation of the
affected Collateral Pool Property pursuant to SECTION 2.12. 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 2.5.1) 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 2.5.1, Borrower shall,
-------------
within fifteen (15) days of the notice of such valuation, cure the same by
bringing the Loan into compliance with the Sublimits by either (i) pledging
collateral in form, substance, value and in a manner all acceptable to Lender,
in its sole discretion, or (ii) prepaying so much of the Loan as is necessary to
cause compliance with the Sublimits, each in accordance with the provisions of
SECTION 4.3. If Lender shall receive notice of a Material Adverse Change from
-----------
Borrower hereunder, or otherwise becomes aware of a Material Adverse Change
which affects Borrower or the enforceability of this Agreement, the Guaranty or
the Loan Documents taken as a whole, Borrower shall immediately provide any
information or documents requested by Lender, including, but not limited to, (a)
with respect to a Material Adverse Change which affects Borrower or Guarantor,
financial statements and the business plan to cure such Material Adverse Change,
of Borrower or Guarantor, as the case may be and (b) with respect to a Material
Adverse Change with affects the enforceability of this Agreement, the Guaranty
or the other Loan Documents taken as a whole, replacement documents in form and
substance acceptable to Lender in its discretion, together with a legal opinion
regarding the enforceability of such replacement documents, acceptable to Lender
in its discretion.
2.15. Release of Collateral Followed by a Permanent Loan.
--------------------------------------------------
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2.15.1. Permanent Loan.
--------------
At any time prior to the date which is one hundred and eighty (180)
days prior to the Revolving Credit Note Expiration Date, Borrower may request
that Lender cause Servicer to make a permanent loan (the "Permanent Loan") to be
--------------
secured by one or more Collateral Pool Properties designated by Borrower (the
"Permanent Loan Collateral") to be simultaneously released from the Collateral
-------------------------
Pool and encumbered in favor of Servicer as security for Borrower's obligations
under the Permanent Loan, which request shall be made in accordance with the
provisions of SECTION 2.15.2. The Permanent Loan shall be made in accordance
--------------
with the terms and conditions of the Streamlined Refinancing Program.
Notwithstanding the foregoing, under no circumstances may Borrower receive a
release of the Security Instrument with respect to the last property in the
Collateral Pool prior to the Expiration Date.
2.15.2. Procedure for Making a Permanent Loan.
-------------------------------------
Borrower may request that Lender cause Servicer to make a Permanent
Loan to Borrower, which request (i) shall be in writing, which writing shall
specify (a) the Collateral Pool Property(ies) that will constitute the Permanent
Loan Collateral, which amount shall be equal to or greater than Five Million and
NO/100 Dollars ($5,000,000.00), (b) the original principal amount of the
requested Permanent Loan, (c) the related reduction in the Maximum Facility
Available, if applicable, (d) whether Borrower has selected Lender's then
current early rate lock delivery option, and (e) any corresponding prepayment of
the Loan in accordance with the provisions of SECTION 4.3, and (ii) shall be
-----------
accompanied by (a) any fees then due and owing under Xxxxxxx Mac's Streamlined
Refinancing Program for each Collateral Pool Property proposed by Borrower to be
subject to the Permanent Loan, (b) any Prepayment Fee and other fees due
hereunder and (c) the Underwriting Materials. Following receipt of all of the
items specified in (i) and (ii) of the previous sentence, Lender shall use its
best efforts to consent to Borrower's request within sixty (60) days of such
notice, provided that (1) at the time of such request no Event of Default or
Potential Default exists, (2) the Permanent Loan shall be made in accordance
with the terms and conditions of the Streamlined Refinancing Program, (3) 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, provided,
however, that if any release occasioned by a Permanent Loan would otherwise
cause Borrower to be in non-compliance with the Sublimits set forth in SECTION
-------
2.5.1, Borrower shall have the opportunity to cure the same, prior to or
-----
simultaneously with the release and the consummation of the Permanent Loan
(which shall occur pursuant to the Streamlined Refinancing Program), by either
(A) pledging collateral in form, substance, value and in a manner all acceptable
to Lender, in its sole discretion, or (B) prepaying so much of the Revolving
Credit Note and/or any Fixed Rate Notes then outstanding as is necessary to
cause compliance with the Sublimits, all in accordance with the provisions of
SECTION 4.3, (4) 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, (5) the proposed 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 first
priority Lien on the real and personal property constituting the Permanent Loan
Collateral subject, in each case, to any Permitted Exceptions, and (6) Borrower
shall pay Lender and Servicer any fees then due and owing under Xxxxxxx Mac's
Streamlined Refinancing Program. Thereafter, Lender shall use its best efforts
to consummate the Permanent Loan within thirty (30) days of the granting of
-28-
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 its 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 amount
which may be borrowed on account of the Revolving Credit Note or converted to a
Fixed Rate Borrowing Tranche pursuant to the provisions of SECTION 2.1.1
-------------
(subject, in all cases, to the Sublimits). Notwithstanding anything to the
contrary contained herein, (x) no Permanent Loan may be consummated after the
Revolving Credit Note Expiration Date, and (y) Borrower may only elect to apply
the proceeds of a Permanent Loan to prepayment of any Fixed Rate Note in
accordance with the provisions of SECTION 4.3. Simultaneous with the closing of
-----------
the Permanent Loan, Lender shall release the Lien granted hereunder on the
Permanent Loan Collateral.
2.16. Guaranty.
---------
Guarantor has agreed to execute and deliver the Guaranty to Lender on
the Closing Date, pursuant to which Guarantor will guarantee (i) a portion of
Borrower's Obligations under this Agreement, the Note and the other Loan
Documents as specified in the Guaranty, including, without limitation, a portion
of all fees and other amounts which may become due and payable hereunder on or
prior to the Expiration Date and (ii) all of the recourse obligations set forth
in Sections 2(b) through (f) of the Guaranty. Notwithstanding the foregoing,
pursuant to SECTION 9.24 at all times during which Guarantor shall also be a
------------
Borrower hereunder, the Guaranty shall evidence Guarantor's guarantee of one
hundred percent (100%) of Borrower's Obligations under this Agreement, the Note
and the other Loan Documents, including, without limitation, all fees and other
amounts which may become due and payable hereunder on or prior to the Expiration
Date and (b) all of the recourse obligations set forth in Sections 2(b) through
(f) of the Guaranty. The Guaranty shall remain in full force and effect until
and through the Expiration Date. Pursuant to the Guaranty, Guarantor shall
covenant at all times prior to the Expiration Date (1) to maintain a
Consolidated Adjusted Tangible Net Worth greater than or equal to One Billion
Four Hundred Million and NO/100 Dollars ($1,400,000,000.00) (such covenant, the
"Guarantor's Financial Covenants"), (2) to deliver to Servicer (A) within sixty
-------------------------------
(60) days of the end of each calendar quarter, Guarantor's financial statements
and 10-Q filing with the Securities and Exchange Commission (each with respect
to such calendar quarter), together with a statement detailing (and certifying
to Lender the accuracy of) Guarantor's computation of Consolidated Adjusted
Tangible Net Worth for such quarter, (B) on or prior to April 1st of each year,
Guarantor's annual financial statements and 10-K filing with the Securities and
Exchange Commission (each with respect to the preceding calendar year), together
with a statement detailing (and certifying to Lender the accuracy of)
Guarantor's computation of Consolidated Adjusted Tangible Net Worth for such
calendar year and (C) in a prompt manner any and all other information Lender
may deem necessary in its discretion to enable Lender to verify Guarantor's
continued compliance with Guarantor's Financial Covenant and (3) to promptly
notify Lender (A) in the event Guarantor should at any time fail to comply with
Guarantor's Financial Covenant or (B) upon the occurrence of a Material Adverse
Change with respect to Guarantor. Further pursuant to the Guaranty, Guarantor
shall represent and warrant that Guarantor (aa) is in compliance with
Guarantor's Financial Covenant as of the date of this
-29-
Agreement, (bb) is not aware of any event or occurrence which will or is likely
to have a material adverse effect on Guarantor's Financial Covenant and (cc) has
been provided with a complete copy of this Agreement, the Note and all of the
other Loan Documents and has read, understands and is familiar with the
provisions hereof and thereof. In addition, pursuant to the Guaranty, Guarantor
shall from time to time, (I) upon Lender's election, execute and deliver to
Lender agreements, in form and substance acceptable to Lender, reaffirming
Guarantor's obligations under the Guaranty, notwithstanding any amendments or
other revisions or changes which may have occurred to this Agreement, the Note
or any of the other Loan Documents and (II) join in the execution of any Loan
Request or Renewal Request to be submitted by Lender to Borrower in accordance
with the provisions hereof, reaffirming Guarantor's obligations under the
Guaranty, provided that any failure of Lender to request any such reaffirmation,
or Guarantor to execute the same shall in no way affect Guarantor's obligations
under the Guaranty. In the event and for so long as Guarantor fails to meet
Guarantor's Financial Covenant or a Material Adverse Change shall then exist
with respect to Guarantor, the G-Fee shall be determined in accordance with
SCHEDULE 3.2(A); in all other events the G-Fee shall be determined in accordance
---------------
with SCHEDULE 3.2. Notwithstanding the foregoing, the Guaranty shall remain in
------------
full force and effect notwithstanding any failure of Guarantor to meet
Guarantor's Financial Covenant or the occurrence of a Material Adverse Change
with respect to Guarantor.
2.17. Extension Option.
----------------
Borrower shall have the right to extend the term of the Revolving
Credit Note for an additional four (4) years, by providing written notice to
Lender of such intent no earlier than three hundred and sixty (360) days and no
later than one hundred and eighty (180) days prior to the fifth (5/th/)
anniversary of the Closing Date. In the event no Event of Default or Potential
Default shall then exist, the term of the Revolving Credit Note shall be
extended for an additional four (4) year period commencing on the fifth (5/th/)
anniversary of the Closing Date and terminating on the ninth (9/th/) anniversary
of the Closing Date upon the same terms and conditions set forth herein and in
the other Loan Documents. Notwithstanding any of the foregoing to the contrary,
Lender, in its sole discretion, shall have the right to redetermine the G-Fee
matrices with respect to all amounts payable under a Base Rate Borrowing Tranche
during such extension period, including resetting the G-Fee percentages and
Facility Debt Service Coverage Ratios listed on SCHEDULE 3.2 and SCHEDULE 3.2A.
------------ -------------
Lender shall notify Borrower of its determination with respect to the same at
least sixty (60) days prior to the fifth (5/th/) anniversary of the Closing
Date, which notice shall include Lender's redetermination of all such
percentages and Facility Debt Service Coverage Ratios to be used to determine
any G-Fee payable under a Base Rate Borrowing Tranche, which percentages and
Facility Debt Service Coverage Ratios shall govern the determination of any
G-Fee payable hereunder during such extension period. In the event Lender shall
provide Borrower with notice of such redetermination, Borrower shall, on or
prior to the fifth (5/th/) anniversary of the Closing Date, promptly execute and
deliver to Lender any amendments to this Agreement, the Revolving Credit Note or
any of the Loan Documents and title endorsements as Lender shall require, in its
sole discretion, evidencing the redetermination of such percentages and Facility
Debt Service Coverage Ratios, and Borrower shall cause Guarantor to execute any
reaffirmation of its Guaranty requested by Lender in
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connection with any actions taken by Borrower hereunder. Any failure of Borrower
to execute and/or deliver such documents on or prior to the fifth (5/th/)
anniversary of the Closing Date shall render Borrower's election of the
extension period null and void and of no further force and effect, and the
Revolving Credit Note shall then expire on the fifth (5/th/) anniversary of the
Closing Date, unless sooner terminated pursuant to the provisions hereof.
Borrower shall pay all expenses Lender shall incur with respect to the
amendments discussed in the prior sentence, including, without limitation,
attorneys' fees. No redetermination under this SECTION 2.17 shall affect in any
------------
way the terms of any Fixed Rate Note, including the interest rate payable
thereunder or the G-Fee attributable to any Fixed Rate Borrowing Tranche.
3. INTEREST RATES
--------------
3.1. Interest Rate.
-------------
The interest rate on each Borrowing Tranche evidenced by the
Revolving Credit Note shall be either the Prime Rate or the Base Rate, as
specified in the Loan Request. The interest rate on any Fixed Rate Borrowing
Tranche shall be the interest rate set forth in the applicable Fixed Rate Note.
Interest rates under this Credit Agreement and the 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 Determinations.
---------------------------------------
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 Base Rate determined on the
Borrowing Date is more than twenty-five basis points (.0025) higher or lower
than the Base Rate set forth in the Loan Request, the Base Rate shall be equal
to the Reference BillsSM Rate (or such alternative index as may be selected by
Lender in accordance with the provisions of SECTION 3.4) plus the Margin, as
-----------
each exists on the Borrowing Date. Thereafter, (i) the portion of the Base Rate
attributable to the Reference BillsSM Rate (or such alternative index as may be
selected by Lender in accordance with the provisions of SECTION 3.4) for any
-----------
Base Rate Borrowing Tranche shall be redetermined as of each renewal of such
Borrowing Tranche pursuant to SECTION 3.3.3 and (ii) the portion of the Base
-------------
Rate attributable to the Margin for all Base Rate Borrowing Tranches then
outstanding shall be redetermined as of each determination and redetermination
of the G-Fee. In all events, the same Margin shall apply to all Base Rate
Borrowing Tranches then outstanding. The portion of the Margin attributable to
the G-Fee shall be determined based on the Facility Debt Service Coverage Ratio
in accordance with the table set forth in SCHEDULE 3.2, provided that so long as
------------
(a) Guarantor fails to meet Guarantor's Financial Covenant or (b) a Material
Adverse Change shall then exist with respect to Guarantor, the G-Fee shall be
determined in accordance with the table set forth in SCHEDULE 3.2(A). The
---------------
Facility Debt Service Coverage Ratio and the G-Fee for all Base Rate Borrowing
Tranches then outstanding and/or
-31-
requested shall be determined and redetermined as of each (A) Loan Request, (B)
Renewal Request, (C) conversion pursuant to SECTION 2.1.1, (D) anniversary of
-------------
the Closing Date, (E) addition or deletion of a real property to or from the
Collateral Pool pursuant to SECTIONS 2.9, 2.10 and 2.15 respectively, and (F)
------------ ---- ----
expiration of an Interest Period for any Base Rate Borrowing Tranche.
3.2.2. Base Rate and Margin Quotations.
-------------------------------
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
Base Rate 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 (i) a
---------------
thirty (30) day, sixty (60) day or ninety (90) day period or (ii) subject to a
four basis point (.0004) increase in the G-Fee otherwise applicable to such Base
Rate Borrowing Tranche, a one hundred and eighty (180) day or three hundred and
sixty (360) day period) for which the Reference BillsSM Rate or LIBO Rate, as
the case may be, shall be determined.
3.3.1. Interest Period to End on a Business Day.
----------------------------------------
If the last day of any Interest Period is not a Business Day, the
Interest Period shall be deemed to mature on the Business Day immediately
following such date.
3.3.2. No Interest Periods Beyond the Revolving Credit Note
-----------------------------------------------------
Expiration Date.
---------------
Borrower shall not select or renew an Interest Period for any Base
Rate Borrowing Tranche (i) prior to the fifth (5/th/) anniversary of the Closing
Date that would end after the earlier to occur of (a) the fifth (5/th/)
anniversary of the Closing Date or (b) the Revolving Credit Note Expiration Date
or (ii) after the fifth (5/th/) anniversary of the Closing Date that would end
after the Revolving Credit Note Expiration Date (such date described in (i) and
(ii), the "Required Maturity Date"). If at the time of any such selection or
----------------------
renewal the period of time remaining prior to the Required Maturity Date is less
than thirty (30) days, then such Borrowing Tranche shall be deemed a Prime Rate
Borrowing Tranche. No advance made as part of a Prime Rate Borrowing Tranche may
remain outstanding in excess of thirty (30) days at any one time.
3.3.3. Renewals.
--------
In the case of a redetermination of an Interest Period at the end of
an Interest Period, for purposes of calculating interest due under the
applicable Base Rate Borrowing Tranche the first day of the new Interest Period
shall be the date immediately following the last day of the preceding Interest
Period (such date, the "Renewal Date"), without duplication in payment of
------------
interest for such
-32-
day. For each Borrowing Tranche bearing interest at the Base Rate, if no new
Interest Period is specified within two (2) Business Days prior to the last day
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 Base Rate Borrowing Tranche shall be
--------------
renewed for an Interest Period of thirty (30) days at the Base Rate then
applicable to a Base Rate Borrowing Tranche disbursed on the applicable Renewal
Date having 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. Notwithstanding anything contained
--------------
herein to the contrary, in the event the Facility Debt Service Coverage Ratio is
at any time during the term of the Revolving Credit Note less than 1.60 : 1:00,
Borrower may renew or consolidate (but not increase the outstanding principal
amount of) any Base Rate Borrowing Tranche(s) then outstanding or convert the
Prime Rate Borrowing Tranche, if then outstanding, to a Base Rate Borrowing
Tranche, with an Interest Period of thirty (30) days, in accordance with the
provisions of this SECTION 3.3.3, provided that, as of the date of such renewal
-------------
or consolidation (i) no Event of Default or Potential Default, other than
Borrower's failure to comply with SECTION 2.5.1.2 shall then exist, (ii)
---------------
Borrower's failure to comply with SECTION 2.5.1.2 shall have been for a period
---------------
of less than ninety (90) days, and (iii) Borrower is otherwise in full
compliance with all other terms and conditions of the Loan Documents, including
the provisions of SECTION 4.5. Borrower may elect to prepay the Loan pursuant to
-----------
SECTION 4.3.1 in order to assure compliance with SECTION 2.5.1.2.
------------- ---------------
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 and is
continuing, interest on the Loan shall accrue on the unpaid principal balance
from the earlier of the due date of the first unpaid installment or the
occurrence of such other Event of Default at the default rate set forth in the
Note. If the unpaid principal balance and all accrued interest on the Revolving
Credit Note is not paid in full on the Revolving Credit Note Expiration Date, or
if the unpaid principal balance and all accrued interest on any Fixed Rate Note
is not paid in full on the stated maturity date of such Fixed Rate Note, the
unpaid principal balance and all accrued interest on the Loan shall thereafter
bear interest at the default rate set forth in the Note. Borrower acknowledges
that (a) its failure to make timely payments will cause Lender to incur
additional expenses in servicing and processing the Loan, (b) 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 (c) 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 in the Note
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.
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3.3.5. Late Charge.
-----------
If any amount payable under this Agreement, the Note or any other Loan
Document, other than (i) the outstanding amount of the Revolving Credit Note
payable on the Revolving Credit Note Expiration Date, (ii) the then outstanding
amount of any Fixed Rate Note payable on the stated maturity date of such Fixed
Rate Note, or (iii) the then outstanding amount of the Loan payable upon
acceleration of the Note, is not received by Lender as provided in the Note,
Borrower shall pay to Lender, immediately and without demand by Lender, a late
charge as specified in the Note. 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 specified in the Note 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 specified in the Note.
3.4. Reference Bills(SM) Rate Unascertainable: Illegality; Increased Costs.
-------------------------------------------------------------------
3.4.1. Unascertainable.
---------------
In the event Xxxxxxx Mac shall at any time cease to designate any
unsecured general obligations of Xxxxxxx Mac as "Reference Bills(SM)", at its
option, Lender may (i) select from time to time another unsecured general
obligation of Xxxxxxx Mac having original maturities most comparable to the term
of the Interest Period for the applicable Borrowing Tranche, and issued by
Xxxxxxx Mac at regularly scheduled auctions within the sixty (60) day period
prior to the first day of such Interest Period, and the term "Reference Bills
(SM)" as used herein shall mean such other unsecured general obligations as
selected by Lender; or (ii) for any one or more Interest Periods, use the
applicable LIBO Rate for purposes of determining the Base Rate for such Interest
Period(s). If Xxxxxxx Mac has not conducted an auction of its Reference Bills
(SM) or other unsecured general obligations within sixty (60) days prior to the
first day of the Interest Period for the proposed Borrowing Tranche, the Base
Rate shall be determined as the LIBO Rate plus the Margin for such Interest
Period(s).
3.4.2. Illegality; Increased Costs.
---------------------------
If at any time Lender shall have reasonably determined that (i)
adequate and reasonable means do not exist for ascertaining the applicable LIBO
Rate, (ii) a contingency has occurred which materially and adversely affects the
London interbank market, (iii) the making, maintenance or funding of any
Borrowing Tranche bearing interest in part at the LIBO Rate has been made
unlawful by Lender's compliance 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), (iv) the Base Rate as determined by
the LIBO Rate will not adequately and fairly reflect the cost to Lender of the
establishment or maintaining of any such Borrowing Tranche, or (v) after making
all reasonable efforts, deposits of the relevant amount in Dollars for the
relevant Interest Period for a
-00-
Xxxxxxxxx Xxxxxxx are not available to Lender 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 3.4.2 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 3.4.2,
-------------
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, from and after the
date specified in such notice, be deemed to bear interest at the Prime Rate.
4. PAYMENTS
--------
4.1. Payments.
--------
All payments and prepayments to be made in respect of principal,
interest, Unused Facility Fees, Minimum Usage Fees, Minimum Servicing Fees, any
Early Termination Fee 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
Monthly Payment Statement shall, in the absence of manifest error, be conclusive
as to the amount of principal of and interest on the Loan and other amounts
owing under this Agreement, provided that Borrower may challenge the accuracy of
any Monthly Payment Statement within one (1) year of the date of such Monthly
Payment Statement.
4.2. Payment Dates.
-------------
Subject to the provisions of SECTION 4.3, interest on the Loan
-----------
shall be payable in arrears and shall be due, together with all other amounts
set forth on the applicable Monthly Payment Statement, prior to 12:00 Noon
Eastern Time on the first Business Day immediately prior to the first day of any
Month during the term hereof (the "Payment Date"), and shall be paid by wire
------------
transfer of immediately available funds to an account specified by Servicer.
Lender shall deliver to Borrower an invoice (the "Monthly Payment Statement")
-------------------------
detailing the interest, Unused Facility Fees, Minimum Usage Fees, Minimum
Servicing Fees and other fees due and payable. Except in the case of a
prepayment under SECTION 4.3, Lender shall deliver the Monthly Payment Statement
-----------
detailing charges due for the current calendar month via fax at least five (5)
Business Days prior to the first day of the succeeding Month. 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
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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).
4.3. Prepayments.
-----------
4.3.1. Voluntary Prepayments.
---------------------
4.3.1.1. Borrower shall have the right, at its option, from
time to time to prepay one or more Fixed Rate Notes then outstanding (but not
the Revolving Credit Note) subject, however, to the terms and conditions set
forth in this SECTION 4.3. Notwithstanding anything contained herein to the
-----------
contrary, no prepayment under one or more Fixed Rate Notes may be less than the
outstanding principal balance and accrued interest on the Fixed Rate Note(s)
prepaid. Whenever Borrower desires to prepay one or more Fixed Rate Notes in
full, Borrower shall provide a prepayment notice to Lender at least thirty (30)
days prior to the date of the proposed prepayment, identifying the Fixed Rate
Note(s) to be prepaid and setting forth the proposed prepayment date. Any such
prepayment notice shall be irrevocable. In all instances, the principal balance
of the Fixed Rate Note(s) which is (are) the subject of such notice, together
with interest on such principal balance, shall be due and payable by 12:00 Noon
Eastern Time on the date specified in the prepayment notice as the date on which
such Fixed Rate Note(s) is (are) to be prepaid in full. Lender shall, upon
receipt of such prepayment notice, prepare and deliver to Borrower within ten
(10) days of such receipt, via facsimile or other electronic transmittal, a
statement of interest due with respect to such prepayment. Notwithstanding any
of the foregoing to the contrary, in the event of a prepayment of the last Fixed
Rate Note then outstanding after the Revolving Credit Note Expiration Date, such
prepayment shall be performed in accordance with the provisions of SECTION 2.13,
------------
as such prepayment will terminate Borrower's Obligations under the Fixed Rate
Note and this Agreement.
4.3.1.2. Borrower shall have no right to prepay the Revolving
Credit Note, in whole or in part, except as follows: (i) prepayment of a Base
Rate Borrowing Tranche as required under SECTION 4.3.2, (ii) prepayment of a
-------------
Prime Rate Borrowing Tranche, (iii) prepayment of a Base Rate Borrowing Tranche
where Borrower has previously prepaid in advance all interest applicable to such
Borrowing Tranche which would have otherwise accrued over the applicable
Interest Period, (iv) repayment of all or a part of a Base Rate Borrowing
Tranche upon the expiration of such Borrowing Tranche's Interest Period, and (v)
prepayment upon termination of the Revolving Credit Note in accordance with
SECTION 2.13.1.
--------------
4.3.2. Mandatory Prepayment / Collateral Pool Addition.
-----------------------------------------------
4.3.2.1. If, at the time of the release of a portion of the
Collateral Pool pursuant to SECTION 2.10 or SECTION 2.15 or a conversion
------------ ------------
pursuant to SECTION 2.1.1, Borrower shall be in violation of any of the
-------------
Sublimits set forth in SECTION 2.5.1, Borrower may cure such violation prior to
-------------
or simultaneously with such release or conversion, as the case may
-36-
be, by either (i) pledging collateral in form, substance, value and in
a manner all acceptable to Lender, in its sole discretion or (ii) (a) prepaying
that portion of the Revolving Credit Note outstanding as is necessary to cause
compliance with all of the Sublimits and (b), if the Revolving Credit Note has
been paid in full, prepaying that portion of one or more Fixed Rate Notes then
outstanding as is necessary to cause such compliance. Lender shall deliver to
Borrower as soon as practicable, but in any event within two (2) Business Days
prior to such release or conversion, a statement of the principal and interest
due with respect to any required prepayment. Any required prepayment of a
portion of one or more Fixed Rate Notes then outstanding pursuant to this
SECTION 4.3.2.1 which results from either (1) a release of a portion of the
---------------
Collateral pursuant to SECTION 2.10 or (2) a conversion under and pursuant to
------------
SECTION 2.1.1, shall be accompanied by a Prepayment Fee calculated in accordance
-------------
with SCHEDULE 4.4(B) and any required prepayment of all or a portion of the
---------------
Revolving Credit Note pursuant to this SECTION 4.3.2.1 shall be made without any
---------------
Prepayment Fee or similar fee or penalty.
4.3.2.2. If at the time of a Valuation pursuant to SECTION
-------
2.12.2 or a Material Adverse Change pursuant to SECTION 2.14, Borrower shall be
------ ------------
in violation of any of the Sublimits set forth in SECTION 2.5.1, Borrower shall
-------------
cure such violation within fifteen (15) days of notice of such Valuation or
Material Adverse Change, by either (i) pledging collateral in form, substance,
value and in a manner all acceptable to Lender, in its sole discretion, or (ii)
(a) prepaying that portion of the Revolving Credit Note as is necessary to cause
compliance with all of the Sublimits and, (b) if the Revolving Credit Note has
been paid in full, prepaying that portion of one or more Fixed Rate Notes then
outstanding as is necessary to cause such compliance. Notwithstanding anything
in the preceding sentence to the contrary, in the event the Facility Debt
Service Coverage Ratio is less than 1.60 : 1.00 at any time prior to the
Revolving Credit Note Expiration Date in violation of SECTION 2.5.1.2, Borrower
---------------
shall cure such violation within ninety (90) days of notice of such violation,
by either (1) pledging collateral in form, substance, value and in a manner all
acceptable to Lender, in its sole discretion or (2) (A) prepaying that portion
of the Revolving Credit Note as is necessary to cause compliance with the
Sublimit set forth in SECTION 2.5.1.2 and, (B) if the Revolving Credit Note has
---------------
been paid in full, prepaying that portion of one or more Fixed Rate Notes then
outstanding as is necessary to cause such compliance. Lender shall deliver to
Borrower within two (2) Business Days following the notice of Valuation,
Material Adverse Change or violation of SECTION 2.5.1.2, as the case may be, a
---------------
statement of the principal and interest due with respect to any required
prepayment. Any required prepayment of a portion of one or more Fixed Rate Notes
then outstanding pursuant to this SECTION 4.3.2.2 shall be accompanied by a
---------------
Prepayment Fee calculated in accordance with SCHEDULE 4.4(B), and any required
---------------
prepayment of all or a portion of the Revolving Credit Note pursuant to this
SECTION 4.3.2.2 shall be made without any Prepayment Fee or similar fee or
---------------
penalty.
4.3.2.3. In the event of a casualty or condemnation affecting
any of the Collateral Pool Properties, any award and/or proceeds payable with
respect to such casualty or condemnation and applied to Borrower's Obligations
in accordance with the provisions of the applicable Security Instrument shall be
applied to one or more Fixed Rate Notes then outstanding and/or the Revolving
Credit Note in Lender's sole discretion, without any Prepayment Fee or other
penalty, and Borrower may then elect to terminate either this Agreement and the
parties' obligations
-37-
under the Loan Documents or Borrower's Obligations under either the
Revolving Credit Note or the Fixed Rate Note, if any, in accordance with the
provisions of SECTION 2.13.
------------
4.3.2.4. Any mandatory prepayment of the Revolving Credit Note
or any Fixed Rate Note in accordance with the provisions of this SECTION 4.3.2
-------------
shall be applied, as directed by Borrower, to a particular (i) Base Rate
Borrowing Tranche or Borrowing Tranches, in the event of a mandatory prepayment
of the Revolving Credit Note or (ii) Fixed Rate Borrowing Tranche, in the event
of a mandatory prepayment of any Fixed Rate Note, or, in either instance in the
absence of any specific direction from Borrower, as selected by Lender in its
sole discretion. Notwithstanding any of the foregoing, Borrower may not in any
instance apply any mandatory prepayment of a Borrowing Tranche to a second or
subsequent Borrowing Tranche, as the case may be, unless and until the first or
prior Borrowing Tranche, as the case may be, has been paid in full.
Notwithstanding any of the foregoing to the contrary, in the event of a
mandatory prepayment under the provisions of this SECTION 4.3.2 of the last
-------------
Fixed Rate Note then outstanding after the Revolving Credit Note Expiration
Date, such prepayment shall be performed in accordance with the provisions of
SECTION 2.13, as such prepayment will terminate Borrower's Obligations under the
------------
Fixed Rate Note and this Agreement.
4.4. Prepayment Fee.
--------------
Upon (i) Lender's exercise of any right of acceleration under this
Agreement, the Note, or any other Loan Document following an Event of Default,
or (ii) a voluntary prepayment under SECTION 4.3.1.1 or 4.3.1.2(v), Borrower
--------------- ----------
shall pay to Lender a prepayment fee (the "Prepayment Fee") to be determined (a)
---------------
in accordance with SCHEDULE 4.4(A), with respect to any amounts being prepaid
--------------
under the Revolving Credit Note and (b) in accordance with SCHEDULE 4.4(B), with
--------------
respect to any amounts being prepaid under any Fixed Rate Note, provided that,
in the instance of a prepayment under item (i) above, the Prepayment Fee shall
be determined based on all amounts outstanding under the applicable Note at the
time of acceleration in addition to all interest accrued and all other sums and
fees payable to Lender under such Note, in lieu of determining the same based on
the principal amounts being prepaid under the Revolving Credit Note as specified
in SCHEDULE 4.4(A) or the principal balance of the applicable Fixed Rate Note as
--------------
specified in SCHEDULE 4.4(B).
--------------
4.5. Additional Payment Obligations.
------------------------------
Notwithstanding anything to the contrary set forth herein or in
SCHEDULE 3.2 or SCHEDULE 3.2(A), as the case may be, if and for so long as
------------ ---------------
Lender shall determine in accordance with the provisions of SECTION 3.2.1 that
-------------
the Facility Debt Service Coverage Ratio is less than 1.60 : 1.00, then the
G-Fee applicable to all Base Rate Borrowing Tranches then outstanding (and
thereafter renewed) shall automatically increase to one hundred basis points
(.0100) plus the highest G-Fee shown on SCHEDULE 3.2 or SCHEDULE 3.2(A),
------------ --------------
whichever was applicable at the time of Lender's determination. In the event
that the Facility Debt Service Coverage Ratio shall continue to be less than
1.60 : 1.00 for a period of ninety (90) consecutive days, the same shall
constitute an Event of Default.
4.6. Additional Compensation in Certain Circumstances.
------------------------------------------------
-38-
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 Note, the Loan or payments by
Borrower of any principal, interest, fees, or other amounts due from Borrower
hereunder or under the 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 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. Termination.
-----------
Upon the occurrence of any event described in SECTION 4.6.1, Borrower
-------------
may elect to terminate either this Agreement and the parties' obligations under
the Loan Documents, or Borrower's obligations under either the Revolving Credit
Note or the Fixed Rate Note, if any, in accordance with the provisions of
SECTION 2.13, provided that Borrower's obligations hereunder shall only
------------
terminate upon Borrower's repayment of the Loan in full.
4.6.3. Indemnity.
---------
In addition to the compensation required by SECTION 4.6.1, Borrower
-------------
shall jointly and severally indemnify Lender and Servicer against all
liabilities, losses or expenses (including breakage costs) which Lender and/or
Servicer sustains or incurs as a consequence of any:
4.6.3.1. 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
---- -----------
4.6.3.2. 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,
-39-
Prepayment Fee, Unused Facility Fee, Minimum Usage Fee, Minimum Servicing Fee,
Early Termination 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. CONDITIONS OF LENDING
The obligation of Lender to fund the Loan hereunder is subject to the
performance by Borrower of its Obligations to be performed hereunder at or prior
to (i) the funding of and/or conversion of indebtedness to any Fixed Rate
Borrowing Tranche(s) and (ii) the funding of any Base Rate or Prime Rate
Borrowing Tranche(s), and to the satisfaction of the following further
conditions:
5.1. Initial Borrowing.
-----------------
On the Closing Date:
5.1.1. 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.
5.1.2. Validity of Representations.
---------------------------
The representations and warranties of Borrower contained in SECTION 6
---------
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.
5.1.3. Officer's Certificate.
---------------------
There shall be delivered to and for the benefit of Lender a
certificate, in form and substance satisfactory to Lender, dated the Closing
Date and signed by an Authorized Officer, certifying as appropriate as to:
5.1.3.1. all required actions taken by Borrower in connection
with this Agreement and the other Loan Documents;
-40-
5.1.3.2. 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 Authorized Officers, on which Lender may conclusively rely;
5.1.3.3. copies of the organizational documents of Borrower,
including its certificate of incorporation, by-laws, certificate of limited
partnership, partnership agreement, certificate of formation, and limited
liability company agreement, as applicable, 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 bring-down certificates by facsimile
dated within thirty (30) days of the Closing Date, all of which shall be
attached to such officer's certificate; and
5.1.3.4. the matters described in SECTION 5.1.8.
-------------
5.1.4. 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.
5.1.5. 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.
5.1.6. Payment of Fees.
---------------
Borrower shall have paid or caused to be paid to Lender and Xxxxxxx
Mac, to the extent not previously paid, all fees accrued through the Closing
Date and all of Lender's and Xxxxxxx Mac's costs and expenses, including, but
not limited to, attorneys' 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 by
either Lender or Xxxxxxx Mac in connection with the closing of this Loan.
5.1.7. Consents.
--------
All material consents required to effectuate the transactions
contemplated hereby shall have been obtained.
5.1.8. No Material Adverse Change.
--------------------------
-41-
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 of Borrower.
5.1.9. No Violation of Laws.
--------------------
The making of the Loan shall not contravene any Law applicable to
Borrower, its Affiliates or Lender.
5.1.10. 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.
5.1.11. Collateral Initially Included in Collateral Pool.
------------------------------------------------
With respect to the Collateral which is part of the Collateral Pool at
Closing, Borrower shall have delivered all Underwriting Materials required
hereunder for inclusion of such Collateral into the Collateral Pool, and Lender
shall have approved the inclusion therein.
5.1.12. Other Conditions.
----------------
Borrower shall have satisfied such other reasonable conditions as
required by Lender or Lender's legal counsel.
5.2. Each Subsequent Borrowing Tranche.
---------------------------------
At the time of funding of any Borrowing Tranche (excluding renewals,
conversions and continuances of any outstanding Borrowing Tranche which do not
increase the outstanding 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 6 and in the other Loan Documents shall be true and correct
---------
in all material respects on and as of the date of the funding of such Borrowing
Tranche with the same effect as though such representations and warranties had
been made on and as of the date of the funding of such 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,
its Affiliates or Lender; (iv) Borrower shall have delivered to Lender a duly
executed and completed Loan Request
-42-
or Renewal Request, as the case may be; and (v) Borrower shall have paid all
fees and expenses incurred by Lender or Servicer in connection therewith.
6. REPRESENTATIONS AND WARRANTIES
------------------------------
6.1. Representations and Warranties.
------------------------------
Borrower represents and warrants to Lender as follows:
6.1.1. 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, and Borrower has the lawful power to own or lease the Collateral
Pool 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.
6.1.2. Single Asset Borrower.
---------------------
Subject to the provisions of SECTION 9.24, Borrower is a single asset
------------
entity, with a purpose limited to owning, maintaining and operating only the
Collateral Pool Property.
6.1.3. 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.
6.1.4. 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 rescission with respect to any of the Loan Documents.
6.1.5. No Conflict.
-----------
-43-
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, by-laws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents of Borrower, (ii) any Law or any
material agreement or instrument or order, writ, judgment, injunction or decree
to which Borrower is a party or is subject, or by which Borrower is bound, 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.
6.1.6. 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 decree of any Official Body
which may result in any Material Adverse Change.
6.1.7. Title to Collateral Pool Properties.
-----------------------------------
Borrower has good and marketable title to all Collateral Pool
Properties and to 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 Note or any of its other Obligations in a timely
manner, (ii) the use of any Collateral Pool Property for the use currently being
made thereof, (iii) the operation of any Collateral Pool Property as currently
being operated, or (iv) the value of any Collateral Pool Property.
6.1.8. Use of Proceeds.
---------------
Borrower intends to use the proceeds of the Loan in accordance with
SECTION 2.8.
-----------
6.1.9. 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,
-44-
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.
6.1.10. 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.
6.1.11. Consents and Approvals.
----------------------
Except for the filing of financing statements and the relevant
Collateral Pool Property Documents in the appropriate state and county filing
offices, there are no other filings, consents or 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.
6.1.12. 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 is, by execution of this Agreement and the
Collateral Pool Property Documents, as applicable, in violation of (i) any term
of its certificate of incorporation, by-laws, 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
Collateral Pool Properties, may be subject or bound where such violation would
constitute a Material Adverse Change.
6.1.13. 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
first priority security interests under the Uniform Commercial Code as in effect
in each applicable jurisdiction (the "Uniform Commercial Code") or other Law,
-----------------------
entitled to all the rights, benefits and priorities provided by the Uniform
Commercial Code or such Law, subject to the Permitted Exceptions. Upon the
filing of financing statements relating to said security interests in each
office in which filing is required under the Uniform Commercial Code, 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
-45-
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 (6) 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. Without limiting the foregoing representations and warranties, Borrower
hereby authorizes Lender to file financing statements, continuation statements
and financing statement amendments, in such form as Lender may require to
perfect or continue the perfection of such security interests.
6.1.14. 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.
6.1.15. Insurance.
---------
All insurance policies and other bonds to which Borrower and its
Affiliates are a party are valid and in full force and effect. No notice has
been given, no claim has been made, and no grounds exist, to cancel or avoid any
of such policies or bonds or to reduce the 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
and its Affiliates in accordance with prudent business practice in the industry
of Borrower and its Affiliates.
6.1.16. 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 such
Affiliates, as applicable, 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). There is no default
under any such contracts by Borrower, or to Borrower's knowledge, by any of the
other parties thereto, except for defaults which would not result in a Material
Adverse Change. Neither Borrower nor any of its Affiliates is bound by any
contractual obligation, or subject to any restriction in any organizational
document or any requirement of Law, which is reasonably expected to result in a
Material Adverse Change.
6.1.17. Investment Companies; Regulated Entities.
----------------------------------------
-46-
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.
6.1.18. Pension Plans and Benefit Arrangements.
--------------------------------------
The representations and warranties set forth in SECTION 6.1.18 shall
--------------
only apply to the extent Borrower is at any time, and from time to time, subject
to the provisions of ERISA.
6.1.18.1. 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.
6.1.18.2. Each Multiemployer Plan is able to pay
benefits thereunder when due.
6.1.18.3. Neither Borrower nor any other member of the
ERISA Group has instituted or intends to institute proceedings to terminate any
Pension Plan.
6.1.18.4. 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.
6.1.18.5. 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.
6.1.18.6. Neither 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.
-47-
6.1.18.7. 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.
6.1.18.8. All Pension Plans, Benefit Arrangements and
Multiemployer Plans have been administered in accordance with their terms and
any Law.
6.1.19. Other Indebtedness.
------------------
Other than the Loan, Borrower (not including United Dominion Realty
Trust, Inc.) has not incurred any debt other than (i) unsecured trade debt
incurred in the ordinary course of business and (ii) subordinate intercompany
debt.
6.1.20. 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).
6.1.21. 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 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.
6.1.22. 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.
6.1.23. Formation.
---------
Borrower was formed in the following states: (i) Heritage-Ivystone
L.P., Heritage-London Park L.P., Heritage-Springfield L.P., and ASV-VII
Properties, Inc. were each formed in the State of Arizona, (ii) UDR Pecan Grove,
L.P. was formed in the State of Delaware and (iii) UDR
-48-
Arizona Properties, LLC and United Dominion Realty Trust, Inc., were each formed
in the Commonwealth of Virginia.
6.1.24. 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.
6.1.25. Not a Foreign Person.
--------------------
Borrower is not a "foreign person" within the meaning of Section
1445(f)(3) of the Internal Revenue Code.
6.1.26. Labor Matters.
-------------
Borrower is not a party to any collective bargaining agreements.
6.1.27. 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.
6.1.28. 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 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.
6.1.29. 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 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
-49-
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.
6.1.30. 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.
6.1.31. 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.
6.1.32. No Prior Assignment.
-------------------
As of the Closing Date, (i) Lender shall be assignee of Borrower's
interest under any leases with respect to the Collateral Pool Properties, and
(ii) there are no prior assignments of any such leases or any portion of the
rents due and payable thereunder, or to become due and payable thereunder, which
are presently outstanding.
6.1.33. 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 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. Borrower will continue to operate each
Collateral Pool Property in the manner in which it is presently being operated.
6.1.34. 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 any asserted trademarks, trade names or
service marks of others. To the knowledge of Borrower there is no infringement
by others of any trademarks, trade names or service marks of Borrower.
6.1.35. Conduct of Business.
-------------------
-50-
Borrower does not conduct its business "also known as", "doing
business as" or under any other name.
6.1.36. Title Insurance.
---------------
Each Collateral Pool Property is covered by a title insurance policy
acceptable to Lender.
6.1.37. No Default.
----------
The execution, delivery and performance of the obligations imposed on
Borrower, if any, under this Agreement, the 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, any Collateral Pool Property, or any other property of Borrower which
would result in a Material Adverse Change or which is not covered by insurance.
6.1.38. Condition of the Collateral Pool Properties.
-------------------------------------------
To the extent that any Collateral Pool Property has been damaged by
fire, water, wind, earthquake or other cause of loss, such Collateral Pool
Property has been fully restored.
6.1.39. Non-Residential Leases.
----------------------
Each Collateral Pool Property is a multi-family housing project.
Gross income derived from commercial space, if any, located in any Collateral
Pool Property shall not exceed fifty percent (50%) of the total gross income of
such Collateral Pool Property. Neither Borrower, nor any general partner,
managing member or principal thereof 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.
6.1.40. 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, to be granted in Lender's sole discretion.
6.1.41. No Restrictions.
---------------
Except as disclosed to Lender in writing, there are no rent level
restrictions or tenant income restrictions on any Collateral Pool Property.
6.1.42. No Adverse Affect on the Loan.
-----------------------------
-51-
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 Note or any other Loan Documents to become delinquent
or (ii) adversely affect the Market Value of any Collateral Pool Property.
6.1.43. 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.
6.2. Updates.
-------
Borrower shall provide with each Loan Request that will result in an
increase in the Loan, written revisions to any representations or warranties in
this Agreement which have become outdated or incorrect in any material respect.
In addition, should any 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 as may be necessary or appropriate, to
correct or update same. Notwithstanding the providing of revised information, a
breach of warranty or representation resulting from the prior inaccuracy or
incompleteness 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; further provided that no
representation or warranty shall be deemed to have been updated by any such
revision unless and until Lender funds the additional Loan Request.
6.3. 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 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 Note and continue (a) for so long as any
amount remains owing to Lender under this Agreement, the Note or any of the
other Loan Documents or (b) until the date on which Lender releases all assets
in the Collateral Pool from any Lien securing the Loan Documents pursuant to the
provisions of SECTION 2.10 or SECTION 2.15, 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.
7. COVENANTS
---------
7.1. Covenants.
---------
Borrower covenants and agrees that until the later of (i) payment in
full of the Loan and interest thereon, and satisfaction of all of the other
Obligations of Borrower under the Loan Documents and (ii) the Expiration Date,
Borrower shall comply at all times with the following covenants:
-52-
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 or desirable.
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 any
Collateral Pool Property, (iii) shall restore or repair promptly, in a good and
workmanlike manner, any damaged part of any Collateral Pool Property 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), (vi) shall not change
the use of any Collateral Pool Property as a multi-family residential property,
(vii) 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 any Collateral Pool Property, Lender's security or Lender's rights under
this Agreement, and (viii) shall make any reasonable repairs to a Collateral
Pool Property which is requested by Lender. Borrower shall not (and shall not
permit any tenant or other person to) remove, demolish or alter any Collateral
Pool Property or any part thereof 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 any Collateral Pool Property (including
environmental inspections and tests) during normal business hours, or at any
other reasonable time.
7.1.5. Single Asset Borrower.
---------------------
Prior to the Expiration Date and subject to the provisions of SECTION
-------
9.24, Borrower (i) shall not own or 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
-53-
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 shall 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 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 that
(i) the terms and conditions of this Agreement and the other Loan Documents are
not changed thereby, (ii) Lender shall use its best efforts to minimize costs
and expenses incurred in connection with a request under this subsection, and
(iii) 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.
--------------------------
7.1.8.1. Borrower shall be in compliance with the Sublimits set
forth in SECTION 2.5.1 at such times as expressly required in this Agreement;
-------------
and
7.1.8.2. Borrower shall own at all times the entire equity
interest in each Collateral Pool Property.
7.1.9. Subsequent Periodic 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.
7.1.10. Special ERISA Related Covenants.
-------------------------------
The covenants set forth in this SECTION 7.1.10 shall only apply to the
--------------
extent Borrower is at any time and from time to time subject to the provisions
of ERISA.
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 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
-54-
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 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 (as such term is defined in
ERISA), 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;
(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.
------------
-55-
Borrower shall not at any time create, incur, assume or suffer to exist
any indebtedness, except:
7.1.11.1. Indebtedness under the Loan Documents;
7.1.11.2. 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 the 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 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.
7.1.14. Dispositions of Assets.
----------------------
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 that the foregoing shall not be construed to prevent
Borrower from selling, conveying or leasing its assets as permitted pursuant to
the terms of this Agreement.
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; Name.
-----------------------------------------
Borrower and its general partners, managing members, or principals
shall not amend in any respect their respective certificate of incorporation
(including any provisions or resolutions relating to capital stock), by-laws,
certificate of limited partnership, or limited partnership agreement
-56-
(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. Borrower
shall not amend, revise or otherwise change its name in any respect, without the
prior written consent of Lender.
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.
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 Note, and the other Loan Documents as is
required by Lender; provided that Borrower shall not be required to do anything
that has the effect of (i) changing the material economic or other business
terms of this Agreement, the Note, or any other Loan Documents or (ii) imposing
on Borrower greater liability or obligation than that set forth in this
Agreement, the 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 that Borrower shall not be required to
do anything that has the effect of (i) changing the material economic or other
business terms of this Agreement, the Note, or any other Loan Documents or (ii)
imposing on Borrower greater liability or obligation than that set forth in this
Agreement, the 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 Security Instrument 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
-57-
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 its best efforts
to cure any such defect(s) in such Loan Document(s), provided 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 Note.
7.1.23. ERISA Matters.
-------------
The provisions set forth in this SECTION 7.1.23 shall only apply to the
--------------
extent Borrower is at any time and from time to time subject to the provisions
of ERISA. 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 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 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 Note.
7.2. Reporting Requirements.
----------------------
Borrower covenants and agrees that until the later of (i)
payment in full of the Loan and satisfaction of all of Borrower's other
Obligations hereunder and under the other Loan Documents and (ii) the Expiration
Date, Borrower shall furnish or cause to be furnished to Lender:
7.2.1. Notice of Default.
-----------------
-58-
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 Two Hundred Fifty Thousand and NO/100 Dollars ($250,000.00)
which is not covered by Borrower's insurance policies and which if adversely
determined would constitute a Material Adverse Change; and
7.2.3. Notice of Material Adverse Change.
---------------------------------
Borrower shall promptly notify Lender of any Material Adverse Change
affecting Borrower, Guarantor, any Collateral Pool Property, this Agreement, the
Guaranty, or the other Loan Documents, taken as a whole.
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 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, or within such additional reasonable time as may be necessary, in
Lender's judgment, 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;
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8.1.3. Breach of Covenant.
------------------
Borrower shall default in the observance or performance of any
covenant, condition or provision hereof or under any other Loan Document, which
default is not otherwise specified as an "Event of Default" under (i) the
provisions of this ARTICLE 8 or (ii) Sections 22(a) through (f) of any Security
---------
Instrument with respect to the initial Collateral Pool Properties (or the same
sections or any similar sections of any Security Instrument with respect to any
future Collateral Pool Property(ies)) which is not cured within thirty (30) days
after notice thereof from Lender to Borrower of such default, provided that no
such notice or grace period shall apply in the case of any default which could,
in Lender's judgment, absent immediate exercise by Lender of a right or remedy
under this Agreement or any of the other Loan Documents, result in harm to
Lender, impairment of the Note, or any rights of Lender under this Agreement or
any security given under any other Loan Document;
8.1.4. Event of Default under the Loan Documents.
-----------------------------------------
Borrower shall be in default under any provision of the Note, or any
other Loan Document, including, without limitation, any Security Instrument,
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
Five Hundred Thousand and NO/100 Dollars ($500,000.00) 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 Two Million and NO/100
Dollars ($2,000,000) which is not a Permitted Exception is filed of record with
respect to all or any part of any of Borrower's assets, or any taxes or debts
owing at any time or times hereafter to the United States, or any department,
agency or instrumentality thereof, or by any state, county, municipal or other
governmental agency, including the PBGC, 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;
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;
-60-
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 Law 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 period 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); or
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 sixty (60) days after filing.
8.1.11. Material Adverse Change.
-----------------------
There shall occur a Material Adverse Change which is not corrected to
the reasonable satisfaction of Lender within thirty (30) days after the
occurrence of such Material Adverse Change, or such additional reasonable time
period necessary to cure such Material Adverse Change, in the event Borrower
commences such cure within such thirty (30) day period and thereafter diligently
pursues such cure, not to exceed thirty (30) 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).
8.2. 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 at least ten (10) days prior to such
proposed action, shall constitute commercially reasonable and fair notice
thereof to Borrower.
9. MISCELLANEOUS
-------------
9.1. Cooperation by Borrower; Borrower's Obligations.
-----------------------------------------------
-61-
Borrower grants to Lender the right to distribute on a
confidential basis financial and other information concerning Borrower,
Guarantor, each indemnitor, other Person, the Collateral Pool Properties, and
other pertinent information with respect to the Loan 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 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 (i) shall be effective to bind Lender and Borrower and (ii)
shall be accompanied at all times by a written joinder agreement executed by
Guarantor , consenting and/or agreeing to the same.
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 Note, or any other Loan Document; release anyone liable for the
payment of any amounts under this Agreement, the 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 Note or change the amount of the monthly installments
payable under the Note; and otherwise modify this Agreement, the Note, or any
other Loan Document.
Any forbearance by Lender in exercising any right or remedy
under the Note, this Agreement, or any other Loan Document or otherwise afforded
by applicable Law, shall be in writing and shall not be deemed 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.
9.5. Remedies Cumulative.
-------------------
-62-
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 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
-63-
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 given to or made upon any party hereto under the provisions of
this Agreement shall be in writing unless otherwise expressly provided 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 such 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) 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 (d) if given by any other means (including by air
courier), when delivered; provided, that all such notices to Lender shall not be
--------
effective until received.
Lender's Notice Address and Numbers:
GMAC Commercial Mortgage Corporation
Attention: Executive Vice President - Servicing
000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
with a copy to:
GMAC Commercial Mortgage Corporation
Attention: General Counsel
000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Borrower's Notice Address:
United Dominion Realty Trust, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Copies of all notices to Borrower shall also be sent to: Xxxxxxx & Xxxxxx, 000
Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxx
Xxxxxxxxxx, Esq., provided that any failure to provide such copies to such
addressee shall in no way impair the effectiveness of any such notice.
-64-
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 between 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 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 the later of (i) the Expiration
Date and (ii) payment in full of the Obligations. 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 Note, shall survive payment in full of the Loan and the
Expiration Date. Notwithstanding any of the foregoing to the contrary, in no
event shall (a) the release of Lender's Lien on any Collateral Pool Property,
(b) the maturity, expiration or early termination of the Revolving Credit Note
or any Fixed Rate Note, or (c) the expiration or early termination of this
Agreement, be deemed to terminate any covenants, agreements, representations or
warranties contained in this Agreement, the Note or any of the other Loan
Documents, to the extent that such covenant, agreement, representation or
warranty shall, by its terms, survive the release, maturity, expiration or early
termination of this Agreement, the Note or any of the other Loan Documents.
-65-
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, (i) an agreement, if any, including
any Servicing Agreement, between Lender and Servicer for 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, (ii)
Borrower shall not be a third party beneficiary of any Servicing Agreement, and
(iii) 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.
-----------------------
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
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TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH
THE BENEFIT OF COMPETENT LEGAL
COUNSEL.
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 Loan amount 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.
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. Transfers of Collateral Pool Properties to Affiliates of
--------------------------------------------------------
Borrower.
--------
Notwithstanding any of the provisions of this Agreement or any
of the other Loan Documents to the contrary, provided that no Event of Default
or Potential Default shall then exist, Borrower shall have the right to transfer
title to any of the Collateral Pool Properties to an Affiliate of Borrower which
shall assume the transferor Borrower's obligations under this Agreement, the
Note, the applicable Security Instrument and certain other Loan Documents to be
determined by Lender, provided that prior to any such transfer and assumption
Borrower and/or such Affiliate shall (i) pay to Lender (a) a review fee in the
amount of Three Thousand and NO/100 Dollars ($3,000.00) and (b) all costs and
expenses that Lender and Servicer incur in
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connection with such transfer and assumption, including, but not limited to,
attorney's fees, (ii) submit the following to Lender: (a) documents acceptable
to Lender, in its discretion, evidencing the transfer of the applicable
Collateral Pool Property to such Affiliate, (b) an assumption agreement
acceptable to Lender in its discretion, (c) a reaffirmation of the Guaranty,
acceptable to Lender in its discretion, (d) evidence satisfactory to Lender
that, subject to the Permitted Exceptions (1), with respect to the personal
property located on the subject real property, Lender's Lien continues to
constitute a first priority security interest in favor of Lender notwithstanding
such transfer and assumption and (2), with respect to the subject real property,
the applicable Security Instrument continues to constitute a valid and perfected
first priority Lien in favor of Lender notwithstanding such transfer and
assumption (such evidence to be in the form of a title insurance policy
acceptable to Lender in both form and substance), and (e) an opinion of counsel
acceptable to Lender and (iii) in the instance in which such Affiliate is not
then a party to this Agreement and the other Loan Documents, such Affiliate
shall execute (a) separate allonges to the Revolving Credit Note and any Fixed
Rate Notes then outstanding and (b) a joinder agreement, both of which shall be
in form and substance satisfactory to Lender in its sole discretion. Upon
completion of such transfer, if the transferor no longer owns any properties
subject to the Lien of the Security Instrument, such transferor shall be
released from its obligations hereunder from and after the date of such
transfer, except for those obligations which expressly survive such release,
provided that the foregoing shall not be deemed (absent further action) to
release United Dominion Realty Trust, Inc. from its obligations under the
Guaranty. Notwithstanding any of the foregoing or any other provisions contained
herein or in any of the other Loan Documents, any Transfer (as defined in the
applicable Security Instrument) of any Collateral Pool Property to an entity
that is not an Affiliate shall constitute an Event of Default.
9.24. Full Recourse Guaranty.
----------------------
Notwithstanding any of the foregoing to the contrary and
subject to the terms of this SECTION 9.26, Lender hereby acknowledges that (i)
------------
United Dominion Realty Trust, Inc., the owner of (a) the Collateral Pool
Property commonly known as Heron Lake Apartments, located in Kissimmee, Florida
and (b) the Collateral Pool Property commonly known as Sycamore Ridge
Apartments, located in Columbus, Ohio, is not a single asset entity, and
accordingly, does not satisfy certain of the representations, warranties and
covenants required of, or imposed upon, Borrower under this Agreement and (ii)
United Dominion Realty Trust Inc. may add one or more multi-family real
properties to the Collateral Pool pursuant to the provisions of SECTION 2.9
-----------
without satisfying such single asset entity representations, warranties and
covenants. During any time at which United Dominion Realty Trust, Inc. is a
Borrower under this Agreement, the Note and the other Loan Documents, Guarantor,
shall guarantee one hundred percent (100%) of Borrower's Obligations under this
Agreement, the Note and the other Loan Documents, including, without limitation,
(1) all fees which may become due and payable on or prior to the Expiration Date
and (2) all of the recourse obligations set forth in Sections 2(b) through (f)
of the Guaranty. Notwithstanding the foregoing, during any time at which United
Dominion Realty Trust, Inc. is no longer a Borrower under this Agreement, the
Note and the other Loan Documents, due to any combination of (A) the transfer of
the above-named properties (and any other Collateral Pool Property(ies) then
owned by United Dominion Realty Trust, Inc.) to one or more single asset
entities that are Affiliates of Borrower and the assumption by such
transferee(s)
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of the obligations of United Dominion Realty Trust, Inc. under this Agreement,
the Note, the applicable Security Instrument and certain other Loan Documents to
be determined by Lender, all in accordance with the provisions of SECTION 9.23
------------
and/or (B) the release of any such properties pursuant to the provisions of
SECTION 2.10, Guarantor shall guarantee (x) a portion of Borrower's Obligations
------------
under this Agreement, the Note and the other Loan Documents as specified in the
Guaranty, including ,without limitation, a portion of all fees which may become
due and payable on or prior to the Expiration Date and (y) all of the recourse
obligations under Sections 2(b) through (f) of the Guaranty.
9.25. Indemnity and Certification Regarding Certain Surveys Provided
--------------------------------------------------------------
to Lender.
---------
Borrower and Lender hereby acknowledge that Borrower has not
delivered to Lender updated surveys with respect to the following four (4)
Collateral Pool Properties: (i) South Grand at Pecan Grove Apartments, located
in Austin, Texas, (ii) Heron Lake Apartments, located in Kissimmee, Florida,
(iii) Sycamore Ridge Apartments, located in Columbus, Ohio and (iv) The Towers
at XxXxxxxxx Ranch, located in Phoenix, Arizona. In connection therewith, (a)
Borrower hereby certifies to Lender that no material changes have occurred with
respect to any of such properties from (1) the respective dates set forth on the
surveys presented to Lender with respect to such properties through (2) the
Closing Date and (b) United Dominion Realty Trust, Inc. hereby indemnifies
Lender against any and all liabilities, costs and expenses Lender may sustain or
incur as a result of Borrower's failure to deliver such updated surveys. The
indemnity and certifications set forth in this SECTION 9.25 shall be deemed to
------------
have been relied upon by Lender notwithstanding any investigation heretofore or
hereafter made by Lender or on its behalf. In the event (1) the certification
contained herein shall prove to have been false or misleading or (2) United
Dominion Realty Trust, Inc. shall breach its indemnity obligations provided
herein, the same shall, at Lender's election, constitute an Event of Default.
9.26. Provisions regarding the Springfield Apartments in Denton,
----------------------------------------------------------
Texas.
-----
The parties hereby agree that the Collateral Pool Property
known as the Springfield Apartments in Denton, Texas consists of two lots, Lot 1
and Lot 2. The legal descriptions of Lot 1 and Lot 2 are attached hereto as
SCHEDULE 9.26. The Security Instrument with respect to such Collateral Pool
-------------
Property grants Lender a first priority lien and security interest in both Lot 1
and Lot 2. Notwithstanding the inclusion of such property in the Collateral
Pool, the same (and any income generated therefrom) shall not be included as a
Collateral Pool Property for the purpose of determining the Net Operating Income
and the Market Value of the Collateral Pool (and the resulting determinations of
the Facility Debt Service Coverage Ratio and Loan to Value Ratio), unless and
until (i) Lender shall have received, reviewed and approved new Underwriting
Materials with respect to Lot 2, which Underwriting Materials shall be submitted
to Lender no later than sixty (60) days after the Closing Date and (ii) Borrower
shall have paid to Lender any and all costs and expenses that Lender and
Servicer may incur in connection with the re-underwriting of such property,
including, but not limited to, attorney's fees and expenses. Borrower shall have
the right to release Lot 2 from the Collateral Pool pursuant to the provisions
of SECTION 2.10, provided that Borrower shall not be required to pay
------------
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the release fee specified in item (i)(a) of SECTION 2.10 in connection with any
------------
such partial release. The foregoing shall in no way be deemed to permit Borrower
to release Lot 1 pursuant to the provisions of SECTION 2.10 unless Borrower (a)
------------
has previously released Lot 2 pursuant to the provisions hereof or (ii)
simultaneously releases Lot 2 in accordance with the provisions of SECTION 2.10;
------------
any such release of Lot 1 shall be made in strict accordance with the provisions
of SECTION 2.10.
------------
10. PROVISIONS WITH RESPECT TO THE FIXED RATE NOTE.
----------------------------------------------
This ARTICLE 10 is for information purposes only; each of the
----------
provisions discussed in this Article are contained elsewhere in this Agreement.
In the event of any conflict between any of the provisions contained in this
Article and any other provisions contained in this Agreement, such other
provisions shall prevail. Lender and Borrower hereby acknowledge that certain
provisions contained herein are specific to the operation of the Revolving
Credit Note and are not applicable to the Fixed Rate Note(s), and accordingly,
such provisions will not apply after the Revolving Credit Note Expiration Date
and Borrower's payment in full of the indebtedness evidenced by the Revolving
Credit Note (including, without limitation, all Unused Facility Fees and Minimum
Servicing Fees payable hereunder). Without limiting any of the provisions of
this Agreement, set forth below by reference to Section number is a list of
provisions which specifically apply to the operation of any Fixed Rate Note
having a maturity date later than the Revolving Credit Note Expiration Date:
10.1. Fixed Rate Note Specific Provisions Contained in Section 1.
----------------------------------------------------------
All of the provisions set forth in SECTION 1 of this Agreement shall
---------
specifically apply to the operation of any Fixed Rate Note following the
Revolving Credit Note Expiration Date, provided that the definition of (i)
"Expiration Date" shall be deemed to mean only the Fixed Rate Note Expiration
---------------
Date; (ii) "Loan" shall be deemed to refer only to the outstanding principal
----
balance of the Fixed Rate Note; and (iii) "Note" shall be deemed to refer to
----
only the Fixed Rate Note;
10.2. Fixed Rate Note Specific Provisions Contained in Section 2.
----------------------------------------------------------
The following provisions contained in SECTION 2 of this Agreement
---------
shall specifically apply to the operation of the Fixed Rate Note following the
Revolving Credit Note Expiration Date:
COMMENTS
--------
. Section 2.2 (Term) The term of the Loan shall
terminate on the Expiration
Date, which shall be the Fixed
Rate Note Expiration Date.
. Section 2.3 (Nature of Lender's Lender shall have no obligation
Obligations with Respect to the Loan) to make any additional advances
on account of any
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Fixed Rate Note.
. Section 2.4.4 (Minimum Usage Fee) The Minimum Usage Fee shall be
payable if required under the
terms of Section 2.4.4.
. Section 2.8 (Use of Proceeds) Unchanged.
. Section 2.9 (Additions to the Unchanged.
Collateral Pool)
. Section 2.10 (Release of Collateral) Unchanged.
. Subsection 2.13.2 (Borrower's Right to Borrower may terminate at any
Terminate the Fixed Rate Note) time.
. Section 2.13.4.2 (Fees Due Upon Unchanged.
Termination of a Fixed Rate Note)
. Section 2.13.4.3 (Fees Due Upon Borrower shall be responsible
Termination of this Agreement) for the fees due under item
this Section. (i) of
. Section 2.14 (Material Adverse This Section shall only apply
Change) to the extent the same relates
to a Material Adverse Change to
(i) Borrower or (ii) the
enforceability of this
Agreement or any other Loan
Document, taken as a whole.
10.3. Fixed Rate Note Specific Provisions Contained in Section 3.
----------------------------------------------------------
The following provisions contained in SECTION 3 of this Agreement
---------
shall specifically apply to the operation of any Fixed Rate Note following the
Revolving Credit Note Expiration Date:
COMMENTS
--------
. Section 3.1 (Interest Rate) Unchanged.
. Subsection 3.3.4 (Interest After Unchanged.
Default) and 3.3.5 (Late Charge)
10.4. Additional Fixed Rate Note Specific Provisions.
----------------------------------------------
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All of the provisions contained in SECTIONS 4 (except SECTION 4.5) and
---------- -----------
6 through 9 of this Agreement shall specifically apply to the operation of any
Fixed Rate Note following the Revolving Credit Note Expiration Date.
[Signatures Commence on the Following Page]
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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: HERITAGE-IVYSTONE L.P., an Arizona limited
partnership
By: HERITAGE SGP CORPORATION, an Arizona
____________________________ corporation, its General Partner
Seal
By: __________________________________
Xxxx X. Xxxxxxx
Executive Vice President and
Treasurer
WITNESS: HERITAGE-LONDON PARK L.P., an Arizona
limited partnership
By: HERITAGE SGP CORPORATION, an Arizona
____________________________ corporation, its General Partner
Seal
By: __________________________________
Xxxx X. Xxxxxxx
Executive Vice President and
Treasurer
WITNESS: HERITAGE-SPRINGFIELD L.P., an Arizona
limited partnership
By: HERITAGE SGP CORPORATION, an Arizona
____________________________ corporation, its General Partner
Seal
By: __________________________________
Xxxx X. Xxxxxxx
Executive Vice President and
Treasurer
[Signatures Continue on the Following Page]
WITNESS: UDR PECAN GROVE, L.P., an Delaware limited
partnership
By: SOUTH WEST REIT HOLDING, INC., a Texas
____________________________ corporation, its General Partner
Seal
By: __________________________________
Xxxx X. Xxxxxxx
Executive Vice President and
Treasurer
WITNESS: UDR ARIZONA PROPERTIES, LLC, a Virginia
limited liability company
____________________________ By: UNITED DOMINION REALTY, L.P., a
Virginia limited partnership, its Sole
Member
Seal
By: UNITED DOMINION REALTY TRUST,
INC., a Virginia corporation, its
General Partner
By: ______________________________
Xxxx X. Xxxxxxx
Executive Vice President and
Treasurer
WITNESS: ASV-VII PROPERTIES, INC., an Arizona
corporation
By: ______________________________
____________________________ Xxxx X. Xxxxxxx
Executive Vice President and
Treasurer
Seal
WITNESS: UNITED DOMINION REALTY TRUST, INC., a
Virginia corporation
By: ______________________________
____________________________ Xxxx X. Xxxxxxx
Executive Vice President and
Treasurer
Seal
[Signatures Continue on the Following Page]
LENDER:
WITNESS: GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation
______________________________ By: __________________________________
Name: ________________________________
Seal Title: _________________________________
[Signatures continue on the Following Page]
SCHEDULE 1.1(A)
LIST OF COLLATERAL POOL PROPERTIES
AND ASSOCIATED INITIAL MARKET VALUES
COLLATERAL POOL PROPERTY INITIAL MARKET VALUE
------------------------ --------------------
Arbor Ridge Apartments, Houston, Texas $ 7,902,000.00
Heron Lake Apartments, Kissimmee, Florida $ 12,290,000.00
Xxxxxx Xxxx Xxxxxxxxxx, Xxxxxxx, Xxxxx $ 8,750,000.00
Riviera Pines Apartments, Houston, Texas $ 8,920,000.00
Xxxxx Xxxxx xx Xxxxx Xxxxx Xxxxxxxxxx, Xxxxxx, Xxxxx $ 27,870,000.00
Springfield Apartments, Denton, Texas $ 8,300,000.00
Sycamore Ridge Apartments, Columbus, Ohio $ 18,800,000.00
The Towers at XxXxxxxxx Ranch, Phoenix, Arizona $ 8,125,000.00
SCHEDULE 1.1(B)
LIST OF
COLLATERAL POOL PROPERTY DOCUMENTS
(a) Mortgage/Deed of Trust/Deed to Secure Debt
(b) UCC-1 Financing Statements
(c) FIRPTA Certificate
(d) Guaranty/Reaffirmation of Guaranty
(e) Collateral Agreements (if any)
(f) Documents evidencing O & M Programs (if any)
(g) Title insurance policy acceptable to Lender, in an amount equal to not
less than the Commitment, which title insurance shall include the
following endorsements (where and if applicable): (i) a tie-in
endorsement, (ii) a multiple foreclosure endorsement, (iii) a first loss
endorsement, (iv) a last dollar endorsement, (v) a variable rate mortgage
endorsement, and (vi) a revolving credit endorsement.
SCHEDULE 2.1.1
FORM OF FIXED RATE NOTE
MULTIFAMILY NOTE
----------------
(FOR USE ONLY WITH THE FIXED RATE PORTION OF
A COMBINED FIXED AND FLOATING RATE CREDIT FACILITY)
US $_________________ ___________ ___, 20__
FOR VALUE RECEIVED, the undersigned ("BORROWER") jointly and
severally (if more than one) promises to pay to the order of
______________________________ ("_________"), a ______________, or any
subsequent holder of this Note, the principal sum of _______________ and NO/100
Dollars (US $_____________), with interest on the unpaid principal balance at
the annual rate of __________ percent (___%).
1. DEFINED TERMS. As used in this Note, (i) the term "LENDER" means the
holder of this Note, (ii) the term "SECURITY INSTRUMENT" means collectively,
together with all amendments or modifications thereto, any and all multifamily
open-end mortgages, deeds to secure debt, or deeds of trust now or hereafter
securing the debt evidenced by (a) this Note, (b) that certain Multifamily Note
(together with all amendments, extensions, renewals, replacements, refinancings
or refundings thereof, the "REVOLVING CREDIT NOTE") dated as of February 26,
2002 in favor of GMAC Commercial Mortgage Corporation in the principal sum of
Seventy Million Six Hundred Sixty-Nine Thousand and NO/100 Dollars
($70,669,000.00), (c) [describe all Fixed Rate Notes which have been or may be
executed] (such note(s) together with all amendments, extensions, renewals,
replacements, refinancings or refundings thereof, the "OTHER FIXED RATE NOTES"),
(iii) the term "INDEBTEDNESS" means the principal of, interest on, and any other
amounts due at any time under, this Note, the Revolving Credit Note, the Other
Fixed Rate Notes, if any, the Security Instrument, the Credit Agreement or any
other Loan Document, including prepayment premiums, late charges, default
interest, and advances to protect the security of the Security Instrument under
Section 12 of the Security Instrument, (iv) the term "CREDIT AGREEMENT" Means
that certain Credit Agreement dated as of February 26, 2002 by and between
[Borrower] and GMAC Commercial Mortgage Corporation, together with all
amendments or modifications thereto, and (v) the term "EVENT OF DEFAULT" means
(a) the failure to make any payment of principal, interest or other amounts when
due hereunder, or (b) any Event of Default under and as defined in the Credit
Agreement or any other Loan Document. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement, or
if not defined in the Credit Agreement, the meanings given to such terms in the
Security Instrument.
2. ADDRESS FOR PAYMENT. All payments due under this Note shall be paid by
wire transfer of immediately available funds to an account specified by Lender,
whose address is
________________________________________________, or such other place or account
as may be designated by written notice to Borrower from or on behalf of Lender.
3. PAYMENT OF PRINCIPAL AND INTEREST. Principal and interest shall be paid
as follows:
(a) Unless disbursement of principal is made by Lender to Borrower on
the first day of the month, interest for the period beginning on the date of
disbursement and ending on and including the last day of the month in which such
disbursement is made shall be payable simultaneously with the execution of this
Note. Interest under this Note shall be computed on the basis of a 360-day year
and the actual number of days elapsed.
(b) Consecutive monthly installments of interest only, computed on
the basis of a 360-day year, and the actual number of days elapsed in the period
from the previous payment date until the current payment date for which interest
is being calculated, shall be payable on the first day of each month beginning
on __________ 1, 20__, until the entire unpaid principal balance evidenced by
this Note is fully paid.
(c) Any accrued interest remaining past due for 30 days or more may,
at Lender's discretion, be added to and become part of the unpaid principal
balance and shall bear interest at the rate or rates specified in this Note, and
any reference below to "accrued interest" shall refer to accrued interest which
has not become part of the unpaid principal balance. Any remaining principal and
interest shall be due and payable on ____________ __, 20__ or on any earlier
date on which the unpaid principal balance of this Note becomes due and payable,
by acceleration or otherwise (the "MATURITY DATE"). The unpaid principal balance
shall continue to bear interest after the Maturity Date at the Default Rate set
forth in this Note until and including the date on which it is paid in full.
(d) Any regularly scheduled monthly installment of principal and
interest that is received by Lender before the date it is due shall be deemed to
have been received on the due date solely for the purpose of calculating
interest due.
4. APPLICATION OF PAYMENTS. If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness which is less than all
amounts due and payable at such time, Lender may apply that payment to amounts
then due and payable in any manner and in any order determined by Lender, in
Lender's discretion. Borrower agrees that neither Lender's acceptance of a
payment from Borrower in an amount that is less than all amounts then due and
payable nor Lender's application of such payment shall constitute or be deemed
to constitute either a waiver of the unpaid amounts or an accord and
satisfaction.
5. SECURITY. The Indebtedness is secured by, among other things, the
Security Instrument, and reference is made to the Security Instrument and the
Credit Agreement for other rights of Lender as to collateral for the
Indebtedness. Each Security Instrument is or shall be recorded in the land
records of the counties where each respective property is located.
6. ACCELERATION. If an Event of Default has occurred and is continuing, the
entire unpaid principal balance, any accrued interest, the applicable prepayment
premium payable under the Credit Agreement, if any, and all other amounts
payable under this Note and any other Loan Document shall at once become due and
payable, at the option of Lender, without any prior notice to Borrower (except
if notice is required by applicable law, then after such notice). Lender may
exercise this option to accelerate regardless of any prior forbearance.
7. LATE CHARGE. If any monthly amount payable under this Note, the Credit
Agreement, the Security Instrument or any other Loan Document, other than the
then outstanding amount of the Loan payable on the Maturity Date or upon
acceleration of this Note, is not received by Lender after the amount is due
(unless applicable law requires a longer period of time before a late charge may
be imposed, in which event such longer period shall be substituted), Borrower
shall pay to Lender, immediately and without demand by Lender, a late charge
equal to five percent (5%) of such amount (unless applicable law requires a
lesser amount be charged, in which event such lesser amount shall be
substituted). Borrower acknowledges that its failure to make timely payments
will cause Lender to incur additional expenses in servicing and processing the
loan evidenced by this Note (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 Paragraph represents a fair and reasonable
estimate, taking into account all circumstances existing on the date of this
Note, 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 Paragraph 8.
8. DEFAULT RATE. So long as (a) any monthly installment under this Note
remains past due for thirty (30) days or more, or (b) any other Event of Default
has occurred and is continuing, interest under this Note shall accrue on the
unpaid principal balance from the earlier of the due date of the first unpaid
monthly installment or the occurrence of such other Event of Default, as
applicable, at a rate (the "DEFAULT RATE") equal to the lesser of four (4)
percentage points above the rate stated in the first paragraph of this Note and
the maximum interest rate which may be collected from Borrower under applicable
law. If the unpaid principal balance and all accrued interest are not paid in
full on the Maturity Date, the unpaid principal balance and all accrued interest
shall bear interest from the Maturity Date at the Default Rate. Borrower also
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 monthly installment under this Note 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 monthly installment under this Note is delinquent for more than
thirty (30) days or any other Event of Default has occurred and is continuing,
Lender's risk of nonpayment of this Note 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 payable under this Note to the Default Rate
represents a fair and reasonable estimate, taking into account all circumstances
existing on the date of this Note,
of the additional costs and expenses Lender will incur by reason of the
Borrower's delinquent payment and the additional compensation Lender is entitled
to receive for the increased risks of nonpayment associated with a delinquent
loan.
9. LIMITS ON PERSONAL LIABILITY.
(a) Except as otherwise provided in this Paragraph 9, Borrower shall
have no personal liability under this Note, the Security Instrument, the Credit
Agreement or any other Loan Document for the repayment of the Indebtedness or
for the performance of any other obligations of Borrower under the Loan
Documents, and Lender's only recourse for the satisfaction of the Indebtedness
and the performance of such obligations shall be Lender's exercise of its rights
and remedies with respect to the Collateral Pool Property and any other
collateral held by Lender as security for the Indebtedness. This limitation on
Borrower's liability shall not limit or impair Lender's enforcement of its
rights against any guarantor of the Indebtedness or any guarantor of any
obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the repayment
of a further portion of the Indebtedness equal to any loss or damage suffered by
Lender as a result of (1) failure of Borrower to pay to Lender upon demand,
after an Event of Default, all Rents to which Lender is entitled under Section
3(a) of the Security Instrument and the amount of all security deposits
collected by Borrower from tenants then in residence; (2) failure of Borrower to
apply all insurance proceeds and condemnation proceeds as required by the
Security Instrument; or (3) failure of Borrower to comply with Section 14(d) or
(e) of the Security Instrument relating to the delivery of books and records,
statements, schedules and reports.
(c) For purposes of determining Borrower's personal liability under
Paragraph 9(b), all payments made by Borrower or any guarantor of this Note with
respect to the Indebtedness and all amounts received by Lender from the
enforcement of its rights under the Security Instrument shall be applied first
to the portion of the Indebtedness for which Borrower has no personal liability.
(d) Borrower shall become personally liable to Lender for the
repayment of all of the Indebtedness upon the occurrence of any of the following
Events of Default: (1) Borrower's acquisition of any property or operation of
any business not permitted by Section 33 of the Security Instrument; (2) a
Transfer (including, but not limited to, a lien or encumbrance) that is an Event
of Default under Section 21 of the Security Instrument, other than a Transfer
consisting solely of the involuntary removal or involuntary withdrawal of a
general partner in a limited partnership or a manager in a limited liability
company; or (3) fraud or written material misrepresentation by Borrower or any
officer, director, partner, member or employee of Borrower in connection with
the application for or creation of the Indebtedness or any request for any
action or consent by Lender.
(e) In addition to any personal liability for the Indebtedness,
Borrower shall be personally liable to Lender for (1) the performance of all of
Borrower's obligations under Section 18 of the Security Instrument (relating to
environmental matters); (2) the costs of any
audit under Section 14(d) of the Security Instrument; and (3) any costs and
expenses incurred by Lender in connection with the collection of any amount for
which Borrower is personally liable under this Paragraph 9, including fees and
out of pocket expenses of attorneys and expert witnesses and the costs of
conducting any independent audit of Borrower's books and records to determine
the amount for which Borrower has personal liability.
(f) To the extent that Borrower has personal liability under this
Paragraph 9, Lender may exercise its rights against Borrower personally without
regard to whether Lender has exercised any rights against the Collateral Pool
Property or any other security, or pursued any rights against any guarantor, or
pursued any other rights available to Lender under this Note, the Security
Instrument, any other Loan Document or applicable law. For purposes of this
Paragraph 9, the term "COLLATERAL POOL PROPERTY" shall not include any funds
that (1) have been applied by Borrower as required or permitted by the Security
Instrument prior to the occurrence of an Event of Default or (2) Borrower was
unable to apply as required or permitted by the Security Instrument because of a
bankruptcy, receivership, or similar judicial proceeding. To the fullest extent
permitted by applicable law, in any action to enforce Borrower's personal
liability under this Paragraph 9, Borrower hereby waives any right to set off
the value of the Collateral Pool Property against such personal liability.
10. VOLUNTARY AND INVOLUNTARY PREPAYMENTS. Borrower may prepay this Note in
whole but not in part, and only in accordance with the terms of the Credit
Agreement.
11. COSTS AND EXPENSES. To the fullest extent permitted by applicable law,
Borrower shall pay all expenses and costs, including fees and out-of-pocket
expenses of attorneys (including Lender's in-house attorneys) and expert
witnesses and costs of investigation, incurred by Lender as a result of any
default under this Note or in connection with efforts to collect any amount due
under this Note, or to enforce the provisions of any of the other Loan
Documents, including those incurred in post-judgment collection efforts and in
any bankruptcy proceeding (including any action for relief from the automatic
stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure
proceeding.
12. FORBEARANCE. No delay or omission on the part of Lender or any holder
hereof in exercising any right or remedy under this Note, the Credit Agreement,
the Security Instrument, or any other Loan Document or otherwise afforded by
applicable law, shall not be a waiver of or preclude the exercise of that or any
other right or remedy. The acceptance by Lender of any payment 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 or to exercise any right or remedy with respect to any
failure to make prompt payment. Enforcement by Lender of any security for
Borrower's obligations under this Note shall not constitute an election by
Lender of remedies so as to preclude the exercise of any other right or remedy
available to Lender.
13. WAIVER AND CONSENT. Presentment, demand, notice of dishonor, protest,
notice of acceleration, notice of intent to demand or accelerate payment or
maturity, presentment for payment, notice of nonpayment, grace, and diligence in
collecting the Indebtedness are waived
by Borrower and all endorsers and guarantors of this Note or any Allonge thereto
(other than Lender or any holder of this Note) and all other third party
obligors. Borrower and all endorsers and guarantors of this Note and any Allonge
thereto (other than Lender or any holder of this Note), regardless of the time,
order or place of signing, consent to any one or more extensions or
postponements of the time of payment or any other indulgences, to any
substitutions, exchanges, renewals or releases of collateral for this Note, and
to any additions or releases of any other parties or persons primarily or
secondarily liable.
14. LOAN CHARGES. Neither this Note nor any of the other Loan Documents shall
be construed to create a contract for the use, forbearance or detention of money
requiring payment of interest at a rate greater than the maximum interest rate
permitted to be charged under applicable law. If any applicable law limiting the
amount of interest or other charges permitted to be collected from Borrower in
connection with the Loan is interpreted so that any interest or other charge
provided for in any Loan Document, whether considered separately or together
with other charges provided for in any other Loan Document, violates that law,
and Borrower is entitled to the benefit of that law, that interest or charge is
hereby reduced to the extent necessary to eliminate that violation. The amounts,
if any, previously paid to Lender in excess of the permitted amounts shall be
applied by Lender to reduce the unpaid principal balance of this Note. For the
purpose of determining whether any applicable law limiting the amount of
interest or other charges permitted to be collected from Borrower has been
violated, all Indebtedness that constitutes interest, as well as all other
charges made in connection with the Indebtedness that constitute interest, shall
be deemed to be allocated and spread ratably over the stated term of this Note.
Unless otherwise required by applicable law, such allocation and spreading shall
be effected in such a manner that the rate of interest so computed is uniform
throughout the stated term of this Note.
15. COMMERCIAL PURPOSE. Borrower represents that the Indebtedness is being
incurred by Borrower solely for the purpose of carrying on a business or
commercial enterprise (which purpose is described more fully in the Credit
Agreement), and not for personal, family, household, or agricultural purposes.
16. COUNTING OF DAYS. Except where otherwise specifically provided, any
reference in this Note to a period of "days" means calendar days, not Business
Days.
17. JOINDER. In accordance with the provisions set forth in the Credit
Agreement, certain affiliates of Borrower may become liable under this Note and
the other Loan Documents by executing (a) an Allonge to this Note, (b) a joinder
agreement in form satisfactory to Lender, and (c) any other documents reasonably
required by Lender to evidence and/or secure such affiliate's obligations
hereunder or under the other Loan Documents as set forth in the Credit
Agreement.
18. GOVERNING LAW. This Note shall be governed by the laws of the
Commonwealth of Virginia.
19. CAPTIONS. The captions of the paragraphs of this Note are for
convenience only and shall be disregarded in construing this Note.
20. NOTICES; WRITTEN MODIFICATIONS. All notices, demands and other
communications required or permitted to be given by Lender to Borrower pursuant
to this Note shall be given in accordance with Section 31 of the Security
Instrument. Any modification or amendment to this Note shall be ineffective
unless in writing signed by the party sought to be charged with such
modification or amendment; provided, however, that in the event of a Transfer
under the terms of the Security Instrument, any or some or all of the
Modifications to Multifamily Note may be modified or rendered void by Lender at
Lender's option by notice to Borrower/transferee.
21. CONSENT TO JURISDICTION AND VENUE. Any controversy arising under or in
relation to this Note 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 Note.
Borrower irrevocably consents to 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.
22. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES NOT TO ELECT
A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE
RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER 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.
23. G-FEE. The interest rate stated above includes a G-Fee of ______ basis
points (._____).
[Signatures commence on following page]
IN WITNESS WHEREOF, Borrower has signed and delivered this Note under
seal or has caused this Note to be signed and delivered under seal by its duly
authorized representative. Borrower intends that this Note shall be deemed to be
signed and delivered as a sealed instrument.
BORROWER:
WITNESS: ___________________________,
a _________________________
____________________________ By:_____________________________________
Name: ______________________________
Seal Title: ______________________________
SCHEDULE 2.4
FEE CHART
--------------------------------------------------------------------------------------------------------------------------------
NO. ITEM DETERMINATION OF FEE CREDIT AGREEMENT SECTIONS
REFERENCING SUCH FEE
--------------------------------------------------------------------------------------------------------------------------------
1. Mortgage Review Fee A fee $4,000 per property, payable (i) Sections 1.1, 2.1.1, 2.4.1
in any instance in which a real and 2.9
property is included in the Collateral
Pool and (ii) in certain instances in
connection with a conversion under
SECTION 2.1.1.
-------------
--------------------------------------------------------------------------------------------------------------------------------
2. Seismic Report Fee, if applicable Lender's out-of -pocket costs and Sections 1.1, 2.1.1, 2.4.1
expenses incurred in connection with and 2.9
obtaining a seismic report, which, if
applicable, shall be payable in the
same instances in which the Mortgage
Review Fee is payable.
--------------------------------------------------------------------------------------------------------------------------------
3. Servicing Fee Payment Seven basis points (.0007) times the Sections 1.1 and 2.4.5
principal amount of all Borrowing
Tranches then outstanding.
--------------------------------------------------------------------------------------------------------------------------------
4. Fee with respect to a conversion of Ten basis points (.0010) times the Section 2.1.1.2.
indebtedness to a Fixed Rate Note, wherein amount indebtedness converted.
such conversion was requested after the
first (1/st/) anniversary of the Closing Date
--------------------------------------------------------------------------------------------------------------------------------
5. Expansion Fee Seventy-five basis points (.0075) time Section 2.1.2.
any increase in the amount of the
Commitment pursuant to SECTION 2.1.2.
--------------
--------------------------------------------------------------------------------------------------------------------------------
6. Commitment Fee Seventy-five basis points (.0075) Section 2.4.2
times the
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Commitment.
--------------------------------------------------------------------------------------------------------------------------------
7. Unused Facility Fee Twelve basis points (.0012) per annum Sections 1.1, 2.4.3.,
(computed on the basis of a year of 2.13.4.1, 2.16, 4.1, 4.2,
360 days and actual days elapsed) on 4.6.3.2 and Article 10
the average daily difference between
the amount of (i) the Maximum Facility
Available and (ii) the greater of (a)
the Deemed Minimum Loan Amount or (b)
the sum of the principal amount of all
Base Rate and Prime Rate Borrowing
Tranches then outstanding.
--------------------------------------------------------------------------------------------------------------------------------
8. Minimum Usage Fee The product obtained by (i) an assumed Sections 1.1, 2.4.4,
Base Rate Borrowing Tranche in an 2.13.4.,1 4.1, 4.2, 4.6.3.2
amount equal to the Deemed Minimum and Article 10
Loan Amount times (ii) the lowest
G-Fee shown on SCHEDULE 3.2 or
------------
SCHEDULE 3.2(A), whichever is
---------------
currently applicable, provided that
the Minimum Usage Fee shall be due and
payable only if, and to the extent
that, the foregoing calculation
results in an amount which is greater
than the sum of the G-Fee Amounts
actually paid by Borrower on all
Borrowing Tranches outstanding during
the same computation period.
--------------------------------------------------------------------------------------------------------------------------------
9. Minimum Servicing Fee One-twelfth (1/12/th/) of the product Sections 1.1, 2.4.5,
obtained by (i) an assumed Borrowing 2.13.4.1, 4.1, 4.2, 4.6.3.2
Tranche in an amount equal to the and Article 10
Deemed Minimum Loan Amount times (ii)
the Servicing Fee.
--------------------------------------------------------------------------------------------------------------------------------
10. Addition Fee Fifteen basis points (.0015) times the Sections 1.1 and 2.9
Additional Collateral Facility of any
real property added to the Collateral
Pool pursuant to the provisions of
SECTION 2.9.
-----------
--------------------------------------------------------------------------------------------------------------------------------
-15-
--------------------------------------------------------------------------------------------------------------------------------
11. Release of Collateral Fee $5,000 per property, payable upon the Section 2.10.
release of any property from the
Collateral Pool pursuant to the
provisions of SECTION 2.10.
------------
--------------------------------------------------------------------------------------------------------------------------------
12. Early Termination Fee One percent (1%) of the maximum Sections 1.1, 2.13.4.1,
principal amount of the Revolving 2.13.4.4, 4.1, 4.2 and
Credit Note, which fee shall not be 4.6.3.2
payable in the event all of the real
properties comprising the Collateral
Pool as of the Closing Date are
refinanced pursuant to the provisions
of the SECTION 2.15.
------------
--------------------------------------------------------------------------------------------------------------------------------
13. Prepayment Fees To be determined in accordance with Sections 1.1, 2.13, 2.15.2,
SCHEDULE 4.4(A) or 4.4(B), as 4.3.2, 4.4 and 4.6.3.2
--------------- ------
applicable.
--------------------------------------------------------------------------------------------------------------------------------
14. Transfer Review Fee A fee of $3,000 in connection with Section 9.23
each transfer pursuant to SECTION 9.23.
------------
--------------------------------------------------------------------------------------------------------------------------------
-16-
[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 _________ __,
20__, 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 $__________ (which must be greater
than or equal to ___________________ and NO/100 Dollars ($_____________). 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):
-17-
_____ thirty (30) days
_____ sixty (60) days
_____ ninety (90) days
_____ one hundred and eighty (180) days*
_____ three hundred and sixty (360) days*
[*subject to a four basis point (.0004) increase in the Margin
otherwise applicable to such Borrowing Tranche]
(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 Reference BillsSM
Rate/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) If applicable (i.e. in the event of a Loan Request for a Borrowing
Tranche that will bear interest at the Base Rate), 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 2.5.1 of the Credit
Agreement.
-18-
(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 or Borrower 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), (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]
-19-
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]
-20-
19. The current Loan to Value Ratio is ___________(__%), which
is less than or equal to the Maximum Loan to Value Ratio specified in Section
2.5.1.1 of ______ percent (__%), determined as follows:
A. The current Loan balance $_____________
B. The current aggregate Market $_____________
Value of the Collateral Pool
C. Item A divided by Item B 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 the Maximum Loan to Value
Ratio set forth in SCHEDULE 2.5.1.1 of the Credit Agreement of _______ percent
----------------
(__%), determined as follows:
A. The Loan balance upon $_____________
disbursement of the funds
comprising the Borrowing
Tranche(s) requested herein
B. The current aggregate Market $____________
Value of the Collateral Pool
C. Item A divided by Item B 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 ____ : 1.00, determined as follows:
A. Net Operating Income of the $_____________
Collateral Pool Properties
determined by Lender
B. Facility Debt Service (as defined in $_____________
the Credit Agreement) annualized
C. Item A divided by Item B equals the ____________%
Facility Debt Service Coverage Ratio
-21-
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 not less than ____ : 1.00, determined as
follows:
A. Net Operating Income of the $_____________
Collateral Pool Properties as
determined by Lender
B. Facility Debt Service (as defined $_____________
in the Credit Agreement) annualized
C. Item A divided by Item B equals ____________%
the Facility Debt Service Coverage
Ratio
Servicer hereby certifies (i) to the accuracy of each of the
mathematical computations set forth in paragraphs 19 through 22 above
(acknowledging that Servicer has relied, with Lender's consent and
without independent verification thereof, on the Net Operating Income
and Market Value(s) prepared by Lender), and (ii) to the best of its
knowledge and belief, that all statements made by Borrower herein are
true and accurate in all material respects.
SERVICER:
a_______________________________________________
By:_____________________________________________
Name:
Title:
Dated:___________________________________
-22-
SCHEDULE 3.2
G- FEE TABLE WITH GUARANTY
-----------------------------------------------------------------------------------------------------------
Facility Debt Service Coverage Ratio G-Fee*
-----------------------------------------------------------------------------------------------------------
Greater than or equal to 1.60 : 1.00 but less than .61%
1.80 : 1.00
-----------------------------------------------------------------------------------------------------------
Greater than or equal to 1.80 : 1.00 but less than .54%
2.00 : 1.00
-----------------------------------------------------------------------------------------------------------
Greater than or equal to 2.00 : 1.00 but less than .51%
2.25 : 1.00
-----------------------------------------------------------------------------------------------------------
Greater than or equal to 2.25 : 1.00 .47%
-----------------------------------------------------------------------------------------------------------
* The G-Fee shall be increased by four basis points (.0004) for any Base Rate
Borrowing Tranches having 180 or 360 day Interest Periods.
SCHEDULE 3.2.A
G- FEE TABLE WITHOUT GUARANTY
-----------------------------------------------------------------------------------------------------------------
Facility Debt Service Coverage Ratio G-Fee*
-----------------------------------------------------------------------------------------------------------------
Greater than or equal to 1.60 : 1.00 but less than .82%
1.80 : 1.00
-----------------------------------------------------------------------------------------------------------------
Greater than or equal to 1.80 : 1.00 but less than .65%
2.00 : 1.00
-----------------------------------------------------------------------------------------------------------------
Greater than or equal to 2.00 : 1.00 but less than .57%
2.25 : 1.00
-----------------------------------------------------------------------------------------------------------------
Greater than or equal to 2.25 : 1.00 .50%
-----------------------------------------------------------------------------------------------------------------
* The G-Fee shall be increased by four basis points (.0004) for any Base Rate
Borrowing Tranches having 180 or 360 day Interest Periods.
[BORROWER MAY, SUBJECT TO LENDER'S CONSENT, REVISE THIS FORM OF RENEWAL REQUEST
TO PROVIDE FOR THE RENEWAL OF MULTIPLE BORROWING TRANCHES UNDER A SINGLE RENEWAL
REQUEST FORM OR TO PROVIDE FOR THE SPLITTING OF A MATURING BORROWING TRANCHE
INTO 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
___________, 20__, 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 will mature on
___________, ____.
or
--
_____ Borrower, in accordance with the provisions of the
Credit Agreement, will repay $___________ of the outstanding principal amount of
the Borrowing Tranche originally funded in the amount of $____________, whose
Interest Period will mature on ________, ____, prior to such maturity date, and
hereby requests Lender to renew such Borrowing Tranche in the amount of the
remaining principal balance of such Borrowing Tranche, the remaining principal
balance being equal to $___________.
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, specifically Borrower hereby requests that Lender
combine the Borrowing Tranche in the amount of $______________, whose Interest
Period will mature on ___________, ____ with the Borrowing Tranche in the amount
of $______________, whose Interest Period will mature on ___________, ____ [add
descriptions of additional Borrowing Tranches as necessary.
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 eighty (180) days*
_____ three hundred and sixty (360) days*
[*subject to a four basis point (.0004) increase in
the Margin otherwise applicable to such Borrowing
Tranche]
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
Reference Bills(SM) Rate/LIBO Rate of ___________ percent (____ %) and a Margin
of ________ (____%).
6. If applicable (i.e. in the event of the renewal a
Borrowing Tranche bearing interest at the Base Rate), 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)
-26-
______________, 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. [Check one of the following:]
____ No Potential Default or Event of Default has
occurred or is continuing under the Loan Documents; or
____ No Potential Default or Event of Default, other
than Borrower's non-compliance with Section 2.5.1.2 of the Credit Agreement, has
---------------
occurred or is continuing under the Loan Documents, Borrower is otherwise in
full compliance with the terms of the Loan Agreement, and will not increase the
outstanding principal balance of the Loan pursuant to this Renewal Request.
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 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), 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]
-27-
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]
-28-
12. The current Loan to Value Ratio is ___________(__%),
which is less than or equal to the Maximum Loan to Value Ratio specified in
Section 2.5.1.1 of _____ percent (__%), determined as follows:
A. The current Loan balance $_____________
B. The current aggregate Market $____________
Value of the Collateral Pool
C. Item A divided by Item B ____________%
and then multiplied by 100%
equals the Loan to Value
Ratio
13. The current Facility Debt Service Coverage Ratio is
______ : 1.00, which [check one:]
___ is less than ____ : 1.00, or
___ is greater than or equal to ____ : 1.00,
determined as follows:
A. Net Operating Income of the $_____________
Collateral Pool Properties
determined by Lender
B. Facility Debt Service (as $_____________
defined in the Credit
Agreement) annualized
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 [check one:]
___ is less than ____ : 1.00, or
___ is greater than or equal to ____ : 1.00,
determined as follows:
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A. Net Operating Income of the $_____________
Collateral Pool Properties as
determined by Lender
B. Facility Debt Service (as $_____________
defined in the Credit
Agreement) annualized
C. Item A divided by Item B ____________%
equals the Facility Debt
Service Coverage Ratio
Servicer hereby certifies (i) to the accuracy of each of the
mathematical computations set forth in paragraphs 12 through 14 above
(acknowledging that Servicer has relied, with Lender's consent and
without independent verification thereof, on the Net Operating Income
and Market Value(s) prepared by Lender), and (ii) to the best of its
knowledge and belief, that all statements made by Borrower herein are
true and accurate in all material respects.
SERVICER:
a_______________________________________
By:_____________________________________
Name:
Title:
Dated:__________________________________
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SCHEDULE 4.4A
PREPAYMENT FEE FOR BASE RATE BORROWING TRANCHES
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) Reference Bills(SM) Rate: shall mean that portion of the Base Rate for
the applicable Borrowing Tranche attributable to the Reference
Bills(SM) 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 Reference Bills(SM)
Rate for the Reference Bills(SM) 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 be equal to the greater of the amounts obtained by the formulae
set forth in subparagraphs (a) and (b) below.
(a) the amount obtained by:
(i) dividing:
(A) the Interest Period Balance
by
(B) three hundred and sixty (360) days
(ii) then multiplying the figure obtained in (i) above by one
percent (1%); and
(iii) then multiplying the figure obtained in (ii) above by the
amount of principal being prepaid; or
(b) the amount obtained by
(i) multiplying
(A) the amount of principal being prepaid
by
--
(B) the excess (if a positive number) of the Reference
Bills(SM) Rate over the Reinvestment Rate;
(ii) then dividing the figure obtained in (i) above by three
hundred and sixty (360) days; and
(iii) then multiplying the figure obtained in (ii) above by the
Interest Period Balance.
Notwithstanding the foregoing, if the Reinvestment Rate is
greater than or equal to the Reference Bills(SM) Rate the fee
calculated under this subparagraph (b) shall equal zero.
If at any time a prepayment occurs of a Borrowing Tranche bearing
interest at the LIBO Rate, for purposes of computing the fee
payable under this subparagraph (b), all references in this
Schedule 4.4 to Reference Bills(SM) Rate shall be deemed to refer
to LIBO Rate, as the context requires.
Borrower recognizes that prepayment of any amount due under the
Revolving Credit Note, whether voluntary or involuntary resulting from a default
by Borrower, will result in Lender's incurring loss, including reinvestment
loss, additional expense and frustration or impairment of Lender's ability to
meet its commitments to third parties. Borrower agrees to pay to Lender upon
demand damages for the detriment caused by any prepayment, and agrees that it is
extremely difficult and impractical to ascertain the extent of such damages.
Borrower therefore acknowledges and agrees that the formula for calculating
prepayment premiums set forth above represents a reasonable estimate of the
damages Lender will incur because of a prepayment. Borrower further acknowledges
that the above prepayment premium provisions are a material part of the
consideration for the Loan, and acknowledges that the terms of the Revolving
Credit Note are in other respects more favorable to Borrower as a result of the
Borrower's voluntary agreement to the prepayment premium provisions. Set forth
below, for informational purposes only, is an example of the computation of the
Prepayment Fee, based on a hypothetical (i) principal amount being prepaid of
Five Million and NO/100 Dollars ($5,000,000.00), (ii) Interest Period Balance of
fifteen (15) days, (iii) Reference Bills(SM) Rate of 2.75% and (iv) Reinvestment
Rate of 2.25%. Based on such hypothetical amounts:
(a) the computation set forth in Section 2(a) above is as follows:
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(i) the Interest Period Balance (15 days) divided by three
hundred sixty (360) days yields an amount equal to
approximately .041666;
(ii) one percent (1%) of the figure obtained in (i) above
(approximately .041666) is an amount equal to approximately
.0004166;
(iii) the product of the figure obtained in (ii) above
(approximately .0004166) times the amount of principal
being prepaid ($5,000,000.00) is an amount equal to
approximately $2,083.33.
(b) the computation set forth in Section 2(b) is as follows:
(i) the product of the principal being prepaid ($5,000,000.00)
times the excess of the Reference Bills Rate (2.75%) over
the Reinvestment Rate (2.25%) (such excess .5%) is an
amount equal to $25,000.00;
(ii) the figure obtained in (i) above ($25,000.00) divided by
360 days is an amount equal to approximately 69.4444;
(iii) the product of the figure obtained in (ii) above
(approximately 69.4444) times the Interest Period Balance
(15 days) is an amount equal to approximately $1,041.67.
As the figure obtained under the calculation set forth in (a)
($2,083.33) exceeds the figure obtained under the calculation set forth in (b)
($1,041.67), the Prepayment Fee under this example would be equal to the figure
obtained in (a) or $2,083.33.
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SCHEDULE 4.4(B)
PREPAYMENT FEE SCHEDULE WITH RESPECT TO FIXED RATE NOTE
1. If a prepayment of the Fixed Rate Note is made between the date of the
Fixed Rate Note and the date that is six (6) months prior to the maturity date
of the applicable Fixed Rate Note (the "Yield Maintenance Period"), the
------------------------
prepayment premium shall be whichever is the greater of subparagraphs a and b
below:
a. 1.0% of the amount of principal being prepaid; or
b. the product obtained by multiplying:
(1) the amount of principal being prepaid, by
(2) the excess (if any) of the Monthly Note Rate over the Assumed
Reinvestment Rate, by
(3) the Present Value Factor.
For purposes of subparagraph b, the following definitions shall apply:
Monthly Note Rate: one-twelfth (1/12) of the annual interest rate of
the Fixed Rate Note, expressed as a decimal calculated to five digits.
Prepayment Date: in the case of a voluntary prepayment, the date on
which the prepayment is made; in the case of the application by Lender
of collateral or security to a portion of the principal balance, the
date of such application; and in any other case, the date on which
Lender accelerates the unpaid principal balance of the Fixed Rate
Note.
Assumed Reinvestment Rate: one-twelfth (1/12) of the yield rate as of
the date 5 Business Days before the Prepayment Date, on the 5.00% U.S.
Treasury Security due August 15, 2011, as reported in The Wall Street
Journal, expressed as a decimal calculated to five digits. In the
event that no yield is published on the applicable date for the
Treasury Security used to determine the Assumed Reinvestment Rate,
Lender, in its discretion, shall select the non-callable Treasury
Security maturing in the same year as the Treasury Security specified
above with the lowest yield published in The Wall Street Journal as of
the applicable date. If the publication of such yield rates in The
Wall Street Journal is discontinued for any reason, Lender shall
select a security with a comparable rate and term to the
Treasury Security used to determine the Assumed Reinvestment Rate. The
selection of an alternate security pursuant to this Paragraph shall be
made in Lender's discretion.
Present Value Factor: the factor that discounts to present value the
costs resulting to Lender from the difference in interest rates during
the months remaining in the Yield Maintenance Period, using the
Assumed Reinvestment Rate as the discount rate, with monthly
compounding, expressed numerically as follows:
n = number of months remaining in Yield Maintenance Period
ARR = Assumed Reinvestment Rate
2. If the prepayment is made after the expiration of the Yield
Maintenance Period but before the period set forth in Paragraph 3 below, the
prepayment premium shall be 1.0% the amount of principal being repaid.
3. No prepayment premium shall be payable with respect to (A) any
prepayment made from and after the date that is ninety (90) days prior to the
maturity date of the applicable Fixed Rate Note, or (B) any prepayment occurring
as a result of the application of any insurance proceeds or condemnation award
under the Security Instrument.
Borrower recognizes that prepayment of the unpaid principal balance of the Fixed
Rate Note, whether voluntary or involuntary resulting from a default by
Borrower, will result in Lender's incurring loss, including reinvestment loss,
additional expense and frustration or impairment of Lender's ability to meet its
commitments to third parties. Borrower agrees to pay to Lender upon demand
damages for the detriment caused by any prepayment, and agrees that it is
extremely difficult and impractical to ascertain the extent of such damages.
Borrower therefore acknowledges and agrees that the formula for calculating
prepayment premiums set forth above represents a reasonable estimate of the
damages Lender will incur because of a prepayment. Borrower further acknowledges
that the above prepayment premium provisions are a material part of the
consideration for the Loan, and acknowledges that the terms of the Fixed Rate
Note are in other respects more favorable to Borrower as a result of the
Borrower's voluntary agreement to the prepayment premium provisions.
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SCHEDULE 9.26
LEGAL DESCRIPTION OF LOTS 1 AND LOT 2 OF
----------------------------------------
THE COLLATERAL POOL PROPERTY KNOWN AS
-------------------------------------
SPRINGFIELD APARTMENTS LOCATED IN DENTON, TEXAS
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LEGAL DESCRIPTION OF LOT 1
--------------------------
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LEGAL DESCRIPTION OF LOT 2
--------------------------
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