Exhibit 4.1
LOAN AGREEMENT
This LOAN AGREEMENT (hereinafter referred to as "Agreement") is made as
of this 1st day of March, 1997, by and between FIRST UNION NATIONAL BANK OF
VIRGINIA, a national banking association (the "Lender") and APPLE RESIDENTIAL
INCOME TRUST, INC., a Virginia corporation (the "Borrower").
RECITALS
Borrower has applied to Lender for a revolving loan in an outstanding
amount of principal not to exceed at any one time Ten Million Dollars
($10,000,000) to provide financing for a portion of the acquisition costs for
apartment complex acquisitions by the Borrower.
NOW, THEREFORE, in consideration of the mutual covenants as hereinafter
contained and other valuable considerations, the parties hereto covenant and
agree as follows:
ARTICLE I
DEFINITIONS
Unless the context otherwise requires, for all purposes of this
Agreement and of the other Loan Documents, all capitalized terms used in this
Agreement and in the other Loan Documents without definition shall have the
respective meanings set forth below or as otherwise set forth herein.
"Cash Available for Distribution" means all Funds from Operations (as
defined as of March 1, 1997 by the Board of Governors of the National
Association of Real Estate Investment Trusts).
"Environmental Laws" means any current or future legal requirement of
any governmental authority pertaining to (a) the protection of health, safety,
and the indoor or outdoor environment, (b) the conservation, management, or use
of natural resources and wildlife, (c) the protection or use of surface water
and groundwater, (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, release, threatened
release, abatement, removal, remediation or handling of, or exposure to, any
hazardous or toxic substance or material or (e) pollution (including any release
to land surface water and groundwater) and includes, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 USC
9601 et seq., Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendment of 1984, 42 USC
6901 et seq., Federal Water Pollution Control Act, as amended by the Clean Water
Act of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as amended, 42 USC 7401
et seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous
Materials Transportation Act, 49 USC App. 1801 et seq., Occupational Safety and
Health Act of 1970, as amended, 29 USC 651 et seq., Oil Pollution Act of 1990,
33 USC 2701 et seq., Emergency Planning and Community Right-to-Know Act of 1986,
42 USC 11001 et seq., National Environmental Policy Act of 1969, 42 USC 4321 et
seq., Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq., any
analogous implementing or successor law, and any amendment, rule, regulation,
order, or directive issued thereunder.
"Hazardous Materials" means any substance, material or waste defined or
regulated in or under any Environmental Laws.
"Project" shall mean any multi-family residential apartment project,
the fee simple interest of which is owned or acquired by Borrower.
"Property" or "Properties" shall mean all Projects including all land
and improvements thereon and appurtenances thereto and all other properties or
physical assets owned or acquired by the Borrower.
"Purchase Contract" shall mean the purchase contract entered into by
the Borrower for the acquisition of a Project to be financed by the Loan.
ARTICLE II
LOAN
2.1 Amount and Purpose. Borrower agrees to borrow, and Lender agrees to
lend [subject, among other things, to the terms of this Agreement], an
outstanding principal sum at any one time not to exceed Ten Million Dollars
($10,000,000) (the "Loan"), to be advanced as hereinafter provided to finance a
portion of the purchase price for acquisitions of Projects acquired by Borrower
after the date hereof. Individual Projects being acquired shall in each instance
be approved by Lender. The Borrower shall provide Lender with basic
"underwriting" packages for each acquisition property which at a minimum shall
include: property description, title reports, operating statements, anticipated
capital expenditure budgets and such other items required by Lender as set forth
in Sections 4.5 and 4.6 hereof.
2.2 Note. To evidence the Loan, Borrower has delivered a promissory
note of Borrower payable to Lender in the face amount of $10,000,000 (the
"Note"). The Note bears interest as provided in Section 2.3 and is payable as
provided in Sections 2.3 and 2.4.
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2.3 Interest Rate. The Loan shall bear interest on the unpaid principal
balance thereof at the rate set forth in the Note. Interest on the Loan shall be
payable in arrears on the first day of each month. The Loan shall carry late
charges and shall bear interest on overdue payments as set forth in the Note.
2.4 Principal Payment. Unless sooner payable as a result of
acceleration due to the occurrence of an Event of Default, the entire principal
balance of the Loan, together with all accrued and unpaid interest, shall be
shall be due and payable on March 31, 1998. The principal of the Loan may be
prepaid in whole or in part at any time from time to time without premium or
penalty. Notwithstanding the foregoing, if the principal amount of any advance
of the Loan is not repaid within six (6) months of the date of funding by the
Lender, then upon demand by Lender, Borrower shall provide to Lender as security
for the Loan and the obligations of the Borrower under this Agreement first
mortgage liens on such Projects as determined by the Lender in its sole
discretion. Such first mortgage liens shall be provided within ten (10) business
days after such demand in form satisfactory to Lender together with mortgagee
title insurance policies in such amounts and forms and with such title insurance
companies as are satisfactory to Lender in its sole discretion.
2.5 Documentation of Loan. The documents used to evidence and to secure
the Loan, including without limitation the mortgages or deeds of trust required
to secure the Loan, shall be those documents customarily used by the Lender in
connection with loan transactions of the type, character, and size contemplated
herein and/or such other documents as the Lender and its attorneys, in their
sole discretion, may deem necessary or desirable for the Lender's protection.
All of the foregoing documents, and all other instruments which Lender and/or
its attorney shall require to close the Loan, shall be in a form prepared by
Lender's attorneys and satisfactory to Lender and its attorneys. The Note,
together with this Agreement and any and all other agreements and documents
evidencing and securing the Loan are hereinafter referred to as the "Loan
Documents".
2.6 Loan Fee. Borrower agrees to pay to Lender upon execution of this
Agreement a loan fee (the "Loan Fee") equal to $50,000.
ARTICLE III
USE OF LOAN PROCEEDS
3.1 Use of Proceeds. The proceeds of the Loan shall be used solely to
finance a portion of the purchase price paid by Borrower, or to reimburse
Borrower for cash acquisition costs incurred by Borrower (not to exceed the
contract purchase price) during the same calendar quarter for acquisition of
Projects by Borrower after the date of this Agreement.
3.2 Limitation on Advances. Notwithstanding anything to the contrary
contained in this Agreement, if the principal amount of any advance of the Loan
is not repaid within six
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(6) months of the date of funding by the Lender, Lender shall have no obligation
to make any further advances of the Loan.
ARTICLE IV
PROCEDURE FOR ADVANCES
4.1 Time of Advances. Advances of the Loan shall be made no more than
two times in any month upon a requisition by the Borrower for the cost of a
portion of the purchase price of a Project (not to exceed 100%) of such purchase
price. The amount of each advance shall be subject to the review and approval by
Lender of such requisition. All advances are to be made at the principal office
of Lender or at such other place as Lender may designate.
4.2 Application for Advance. Subject to the provisions of Article III,
the proceeds of each advance of the Loan shall be applied solely and exclusively
to payment or reimbursement of Borrower for payments of a Project in accordance
with a Purchase Contract submitted to Lender.
4.4 Receipt in Trust. Borrower covenants that it will receive all
advances hereunder as a trust fund to be applied solely for the purpose of
paying or reimbursing the costs of acquisition of a Project, but nothing herein
shall impose upon Lender any obligation to see to the proper application of such
advances by Borrower.
4.5 Conditions to Initial Advance. Lender shall not be obligated to
make the first advance until the covenants and conditions set out hereinbefore
and the following further conditions of this section shall have been satisfied:
(a) The requirements of Section 2.5 shall have been satisfied
by Borrower's execution and delivery of the Loan Documents. The Loan Documents
shall be in full force and effect. No Event of Default shall have occurred and
be continuing, and no event shall have occurred which upon the lapse of time or
giving of notice, or both would constitute an Event of Default;
(b) Corporate borrowing resolutions and corporate
organizational documents of the Borrower, both in form and substance
satisfactory to Lender, have been delivered to Lender;
(c) Receipt by Lender of an opinion letter of counsel to the
Borrower, reasonably satisfactory to Lender, that (i) upon due authorization and
execution by the parties thereto, the Loan Documents will be legal, valid and
binding instruments, enforceable against Borrower in accordance with their
respective terms; (ii) that Borrower is a Virginia corporation duly organized
and validly existing under the laws of the Commonwealth of Virginia, and has all
requisite power and authority to execute and perform its obligations under all
Loan Documents to which it is a party; (iii) that the parties who executed the
Loan
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Documents were duly authorized to do so and that the Loan Documents were duly
executed by such parties; and (iv) as to such other matters, incident to the
transactions contemplated hereby, as Lender may reasonably require;
(d) Borrower shall have complied with its obligations under
this Agreement;
(e) The Loan Fee shall have been paid by Borrower to Lender;
(f) A copy of a title insurance commitment is issued to
Borrower by a title insurer acceptable to the Lender in the amount of Borrower's
acquisition price of each Project to be financed with the Loan, which shall
commit to insure that the Borrower, upon closing, will own marketable fee simple
title to the Property, free and clear of all liens and objections and such other
matters as may be approved by the Lender (the "Approved Title Insurance
Commitment");
(g) A request for an advance or due diligence book in a form
satisfactory to Lender has been duly executed by the Borrower, approved by
Lender;
(h) Executed copies of the Purchase Contract, for each Project
to be financed with the Loan, both in form and substance satisfactory to the
Lender have been delivered to Lender;
(i) There shall be no litigation or dispute outstanding or
threatened which in Lender's sole opinion jeopardizes the continued operation of
the Project to be financed with the Loan;
(j) Lender shall have received and approved operating
statements and anticipated capital expenditure budgets for the Project to be
financed by the Loan; and
(k) Lender shall have received and approved such other
information about each Project that is to be financed with the Loan that Lender
may reasonably request from Borrower.
4.6 Conditions to Subsequent Advances. Lender shall not be obligated to
make advances after the first advance until the covenants and conditions set out
in Section 4.5 shall remain satisfied and the conditions set forth in
subsections (f) through (k), inclusive, of Section 4.5, shall have been
satisfied for each Project to be financed with the Loan. Lender shall have seven
(7) days from the submission of the materials described in subsections (f)
through (k), inclusive of Section 4.5, to approve a potential acquisition of a
Project. Should the Lender not reject the acquisition during the seven (7) day
period, Lender shall be deemed to have given its consent and shall be obligated
to fund under the terms of this Agreement. Borrower shall be obligated to obtain
Lender's approval for a proposed acquisition of a Project only if proceeds of
the Loan will be used to make such acquisition. Notwithstanding anything to the
contrary contained herein, Lender shall not be obligated to make any advance if
an
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Event of Default has occurred or if any event which, with the passage of time or
the giving of notice or both, would constitute an Event of Default, has
occurred.
4.7 No Encumbrances; No Debt. No advance shall be due or payable while
there is any lien or encumbrance upon any Property (whether financed with the
Loan or not) or while there is any other debt outstanding by the Borrower (other
than customary trade obligations), except pursuant to this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BORROWER
5.1 Representations and Warranties. Upon execution of this Agreement
and with each request for an advance hereunder, Borrower represents and warrants
that:
(a) It is a duly organized and validly existing corporation
under the laws of the Commonwealth of Virginia, qualified to do business in all
jurisdictions where the Projects are located, and has filed all certificates and
other documents with governmental offices as required by applicable law and has
full power and authority to consummate the transactions contemplated hereby, to
own and operate the Projects and to borrow the monies requested;
(b) The financial statements, if any, heretofore delivered to
Lender, are true and correct in all respects, have been prepared in accordance
with generally accepted accounting practice, and fairly present the respective
financial conditions of the subjects thereof as of the respective dates thereof;
no materially adverse change has occurred in the financial conditions reflected
therein since the respective dates thereof; no additional borrowings have been
made by Borrower since the date thereof other than the borrowing contemplated
hereby or approved by Lender; no adverse change has occurred with respect to
Borrower's credit;
(c) There are no actions, suits or proceedings pending, or to
the knowledge of Borrower threatened, against or affecting it or any Project or
involving the validity or enforceability of the Note, any of the Loan Documents,
or before or by any government authority, except actions, suits and proceedings
fully covered by insurance or which, if adversely determined, would not in the
aggregate substantially impair the ability of Borrower to pay when due any
amounts which may become payable in respect of the Note; and, to Borrower's
knowledge, it is not in default with respect to any order, writ, injunction,
decree or demand of any court or a governmental authority;
(d) All utility services necessary for the operation thereof
for their intended purpose are available at the boundaries of the Project or
available by way of easement agreements satisfactory to Lender, including water
supply, storm and sanitary sewer facilities, electric and telephone facilities;
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(e) It is the fee simple owner of all of Property and the
Projects and all of such Property and Projects are unencumbered by any liens or
mortgages, except as reflected in the applicable Approved Title Insurance
Commitment;
(f) It will obtain for all Projects financed with the Loan
paid title insurance policies in accordance with the applicable Approved Title
Insurance Commitment;
(g) The use of all Projects complies in all material respects
with applicable zoning and environmental ordinances, regulations and restrictive
covenants affecting the Project, all use requirements of any governmental
authority having jurisdiction have been satisfied, and no material violation of
any law or regulation exists with respect thereto;
(h) At Lender's request, it will provide casualty insurance
for each Project to be financed with the Loan, the form, amount, and issuing
company of which are to be satisfactory to Lender;
(i) At Lender's request, it will provide adequate public
liability insurance for each Project to be financed with the Loan, the form,
amounts and terms thereof are to be satisfactory to the Lender;
(j) At Lender's request, it will obtain for each Project to be
financed with the Loan a current survey prepared by a certified land surveyor
showing location of actual improvements as of the date of acquisition of the
Project, containing only those matters acceptable to the Lender and containing a
certification that the Project to be financed with the Loan is not located in a
flood hazard area;
(k) There is no default on the part of Borrower under this
Agreement, the Note or any of the Loan Documents and no event has occurred and
is continuing which with notice or the passage of time or either would
constitute a default under any of the above;
(l) Each requisition, or the receipt of the funds requested
thereby, shall constitute an affirmation that the foregoing representations and
warranties of the Borrower are true and correct as of the date thereof and,
unless Lender is notified in writing to the contrary prior to the disbursement
of the advance requisitioned, will be so on the date thereof.
(m) Borrower represents that there is no litigation, legal or
administrative proceeding, investigation or other action of any nature
commenced, pending, or, to the knowledge of Borrower, threatened against,
Borrower which materially and adversely affects the Borrower and which has not
been disclosed in detail in writing to Lender and which may involve the
possibility of any judgment or liability not fully covered by insurance, or
materially and adversely affect any of the assets of the Borrower or Borrower's
right to carry on business as now conducted, or affect the continued employment
of any officer, director, or employee of Borrower; and
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(n) Borrower hereby warrants to Lender that all
representations, circumstances, accounts, reports, and all other information
supplied to Lender in connection with the Loan are true and accurate in all
material respects. Borrower agrees that such warranty shall survive the closing
of the Loan and further agrees to notify Lender of any material change in any of
the information submitted to Lender.
ARTICLE VI
COVENANTS OF BORROWER
6.1 Borrower's Covenants. Borrower further covenants with Lender as
follows:
(a) Borrower will not convey or encumber any Property in any
way without the prior written consent of Lender, which Lender may withhold in
its discretion.
(b) Borrower will receive advances of the Loan solely for the
purpose of paying the costs of acquisitions of the Projects and will apply the
advances to such payment.
(c) Borrower will, upon demand by Lender, commence and proceed
promptly and diligently to correct any structural defect in any Project.
(d) Borrower will not enter into any lease for any Project or
Property except in the ordinary course of business.
(e) Borrower will comply with all restrictive covenants
affecting any Project and upon notice from Lender of any failure to comply, will
commence and proceed promptly and diligently to bring about compliance.
(f) Borrower will keep adequate records and books of account
with respect to the Property in accordance with generally accepted accounting
principles and will permit Lender, by its agents, accountants and attorneys, to
visit and inspect the Projects and examine such records and books of account and
to discuss the affairs, finances and accounts pertaining thereto with
representatives of Borrower at such reasonable times as may be requested by
Lender and will furnish to Lender all financial statements and reports including
periodical statements of income and expense as Lender may request.
(g) Borrower will not incur any additional indebtedness (other
than customary trade obligations), nor otherwise encumber or sell any of the
Properties, during the term of the Loan, without the prior written consent of
Lender, which Lender may withhold in its discretion.
(h) Borrower will provide Lender with the following financial
information:
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a. Annual report to shareholders of Borrower for the fiscal year ending
December 31, 1996 including Form 10-K to be provided to Lender on or before
April 30, 1997.
b. Quarterly report to shareholders of Borrower to be
provided to Lender within 90 days following the
end of each fiscal quarter.
c. Quarterly operating statements (in summary format)
for each of the individual Projects and other
Property owned by Borrower within 45 days
following the end of each fiscal quarter.
d. Borrower shall provide Lender with a copy of the
prospectus related to any and all public offerings
undertaken during the term of the Loan.
(i) Borrower will not alter the character of its business from
that conducted as of the date of this Agreement or engage in any business other
than the business conducted as of the date of this Agreement.
(j) Borrower will not enter into any transaction of merger or
consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution) or sell or agree to sell all or substantially all
its assets or foreclose or agree to purchase any other company or all or
substantially all of the assets of another Company (other than acquisition of
projects) unless approved by the Lender in its sole discretion.
(k) Borrower will not make any loans or engage in any lending
activity.
(l) Borrower will comply with all legal requirements necessary
to maintain its status as a real estate investment trust.
(m) (1) Except as would not cause or be reasonably expected to
cause a material adverse effect on the Borrower or any Property:
(i) Each of the Properties and all operations at
the Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any
Environmental Law with respect to the Properties or the
businesses operated by Borrower (the "Businesses"), and
there are no conditions relating to the Businesses or
Properties that would be reasonably expected to give rise
to liability under any applicable Environmental Laws.
(ii) Borrower has not received any written notice
of, or inquiry from any governmental authority regarding,
any violation, alleged violation, non-compliance,
liability or potential liability regarding Hazardous
Materials or compliance with Environmental Laws with
regard to any of the Properties or the Businesses, nor
does Borrower have knowledge that any such notice is being
threatened.
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(iii) Hazardous Materials have not been transported
or disposed at or from any of the Properties, or
generated, treated, stored or disposed of at, on or under
any of the Properties or any other location, in each case
by, or on behalf, of Borrower, the Properties or the
Businesses in any amount reportable under the federal
Comprehensive Environmental Response, Compensation and
Liability Act or any analogous state law, except releases
in compliance with any Environmental Laws.
(iv) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of
Borrower, threatened, under any Environmental Law to which
Borrower is or will be named as a party, nor are there any
consent decrees or other decrees, consent orders,
administrative orders or other orders, or other
administrative or judicial requirements outstanding under
any Environmental Law with respect to Borrower, the
Properties or the Businesses.
(v) There has been no release or threat of
release of Hazardous Materials at or from the Properties,
or arising from or related to the operations (including,
without limitation, disposal) of Borrower in connection
with the Properties or otherwise in connection with the
Businesses, except releases in compliance with any
Environmental Laws.
(vi) None of the Properties contains, or has
previously contained, any Hazardous Materials at, on or
under the Properties in amounts or concentrations that, if
released, constitute or constituted a violation of, or
could give rise to liability under, Environmental Laws.
(vii) Borrower has not assumed any liability of any
person, entity or governmental authority under any
Environmental Law.
(2) Borrower has adopted procedures that are designed to (i)
ensure that Borrower, all of its operations and each of the Properties remains
in compliance with applicable Environmental Laws and (ii) minimize any
liabilities or potential liabilities that Borrower, any of its operations and
each of the Properties may have under applicable Environmental Laws.
(n) Other than as set forth below, Borrower will not, directly or
indirectly, declare or pay any dividends or make any other distribution upon any
shares of its capital stock of any class or make any distributions to
stockholders; provided that (i) the Borrower may make distributions, in the
aggregate, in an amount not to exceed in any calendar year one hundred percent
(100%) of Cash Available for Distribution; (ii) Borrower may pay such dividends
as are necessary to retain its status as a real estate investment trust; and
(iii) subsidiaries of the Borrower may make distributions to the Borrower.
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ARTICLE VII
DEFAULT
7.1 Events of Default. The occurrence of any of the following events,
whether voluntary or involuntary, shall constitute an "Event of Default":
(a) If there occurs any default under any other obligation of
the Borrower to the Lender beyond any applicable cure period;
(b) If Borrower assigns, or attempts to assign this Agreement,
or advances to be made hereunder, or any interest therein, or if any of the
Property be conveyed or further encumbered in any way without consent of Lender
which will not be unreasonably withheld;
(c) If Borrower shall commit any affirmative act of
insolvency, or shall file any petition or action under any bankruptcy,
insolvency, or moratorium law, or any other law or laws for the relief of, or
relating to debtors; or if there shall be filed any insolvency petition under
any bankruptcy statute against Borrower, or there shall be appointed any
receiver or trustee to take possession of any property of Borrower, and such
petition or appointment is not set aside or withdrawn or does not cease within
thirty (30) days from the date of such filing or appointment; or
(d) If Borrower fails to comply with any of the terms
covenants, provisions and agreements contained in the Note or the covenants and
provisions contained in this Agreement or any other Loan Document, and does not
cure such default within any applicable grace or curative period (but in no
event shall Lender be required to make advances during such grace or curative
period); or if any of the representations and warranties of Borrower contained
herein or in any other Loan Document is false or misleading.
7.2 Remedies Upon Default. If an Event of Default described in
subsection 7.1(c) above shall have occurred the Note shall immediately and
automatically become due and payable, the obligations of Lender to make further
advances of the Loan shall automatically terminate, and Lender shall be entitled
to take any of the actions described in (c) below without notice to Borrower. If
any other Event of Default shall have occurred, at any time thereafter, Lender
may take any one or more of the following actions by written notice to Borrower:
(a) Declare the principal of and accrued interest on the Note,
or any other notes or evidences of indebtedness of Borrower, then held by Lender
to be due and payable, both as to principal and interest, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the Note or in such other note or
evidence of indebtedness to the contrary notwithstanding;
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(b) Declare any obligation of Lender to make further advances
of the Loan terminated immediately; or
(c) Exercise any and all rights Lender may have under any of
the Loan Documents or any other instrument or agreement.
7.3 Suits for Enforcement. In case any one or more of such Events of
Default shall occur and be continuing, the holder of the Note may proceed, to
the extent permitted by law, to protect and enforce such holder's rights either
by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, condition or agreement contained in this Agreement
or the Note or any other Loan Document or in aid of the exercise of any power
granted in this Agreement or the Note or any other Loan Document, or proceed to
enforce the payment of the Note or to enforce any other legal or equitable right
of the holder of the Note.
7.4 Remedies Cumulative. No right or remedy herein or in any other
agreement or instrument conferred upon Lender, or the holder of the Note is
intended to be exclusive of any other right or remedy, and each and every such
right or remedy shall be cumulative and shall be in addition to every other
right and remedy given hereunder or under any Loan Document or now or hereafter
existing at law or in equity or by statute or otherwise. Without limiting the
generality of the foregoing, if the Note or any of the other obligations of
Borrower to Lender shall not be paid when due, whether at the stated maturity
thereof, by acceleration or otherwise, Lender shall not be required to resort to
any particular security, right or remedy or to proceed in any particular order
of priority, and Lender shall have the right at any time and from time to time,
in any manner and in any order, to enforce its security interests, liens, rights
and remedies, or any of them, as Lender deems appropriate in the circumstances
and apply the proceeds of its collateral to the obligations of Borrower in any
order of priority elected by Lender.
ARTICLE VIII
MISCELLANEOUS
8.1 Expenses. Whether or not the transactions contemplated hereby shall
be consummated (except as the sole result of default by Lender under the
Agreement), Borrower agrees to pay all expenses incurred by Lender in connection
with the negotiation, preparation and administration of this Agreement
(including, without limitation, any modifications of or waivers under this
Agreement), the other Loan Documents, the borrowings hereunder, the enforcement
and preservation of the rights of Lender under or in connection with this
Agreement, the Note and the other Loan Documents, and all attorneys' fees and
disbursements incurred by Lender which arise out of or are connected, directly
or indirectly, to any transaction contemplated by this Agreement, including, but
not limited to, the fees and disbursements of XxXxxxx Xxxx, a Professional
Corporation, counsel for Lender, for services rendered to Lender in connection
with the transactions contemplated by this Agreement, and filing and recording
fees. All of such expenses shall be paid by Borrower at or before the time
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of the execution of this Agreement to the extent incurred and billed and
thereafter on demand as incurred. The provisions of this Section shall survive
any termination of this Agreement, whether by reason of bankruptcy of Borrower
or otherwise.
8.2 Assignment. Lender may assign, negotiate or otherwise transfer its
rights hereunder and when so assigned, negotiated or transferred, all of the
provisions of this Agreement shall continue to apply.
8.3 Waiver. No waiver of any provision or violation of this Agreement
shall be deemed to have been made by Lender unless expressly stated by Lender in
writing. No failure by Lender to enforce any provision of this Agreement shall
be deemed a waiver thereof nor shall any waiver of any violation constitute a
waiver of any subsequent provision or such violation or any other provision.
8.4 Notices. All notices hereunder shall be in writing and shall be
deemed to have been sufficiently given or served for all purposes when presented
personally or sent by certified or registered mail to any party hereto at the
following addresses:
If to Lender: First Union National Bank of Virginia
X.X. Xxx 00000
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
With a copy to: Xxxxxx X. Xxxxxxx, Esquire
XxXxxxx Xxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
With a copy to: Xxxxxx X. Xxxxxxxx
McGuire, Woods, Battle & Xxxxxx LLP
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
If to Borrower: Apple Residential Income Trust, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: S. Xxx Xxxxxxx
Either party may change its address for the purposes of notice by at least ten
(10) days prior written notice given to the other party in accordance with this
section. All such notices, demands, requests and other communications shall be
deemed to have been given upon the earlier of (i) delivery at the appropriate
address specified above, whether in person, by express courier or by mail, or
(ii) two business days after the postmark date of mailing. Rejection or other
refusal to accept or the inability to deliver because of a changed address of
which no
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notice was given shall not invalidate the effectiveness of any notice, demand,
request or other communication.
8.5 Amendment. Neither this Agreement nor any provisions hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
8.6 Time of Essence. Time is of the essence to this Agreement.
8.7 Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party, subject to the provisions hereof. All
covenants, agreements, representations and warranties by or on behalf of
Borrower which are contained or incorporated in this Agreement or by any Loan
Document shall inure to the benefit of the successors and assigns of Lender and
any holder(s) of the Note. Except for the parties hereto and their respective
successors and assigns, no other party shall be entitled to the benefits of this
Agreement or to rely thereon.
8.8 Construction and Service of Process. This Agreement and all the
Loan Documents shall be governed by and construed and enforced in accordance
with the laws of Virginia. The parties consent that service of process in any
action or proceeding in connection with this Agreement, the Note, or any of the
other Loan Documents may be made upon any party by mailing a copy of the summons
to such party, by registered mail, at its address to be used for the giving of
notices under this Agreement.
8.9 Rules of Construction. When the identity of the parties hereto or
the circumstances make it appropriate, the masculine gender includes the
feminine and/or neuter and the singular number includes the plural. Section
headings are for convenience only and shall not affect the interpretation or
construction of this Agreement or any other Loan Documents.
8.10 Severability. If any term of this Loan Agreement, or the
application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Agreement or the application of
such term to persons or circumstances other than those to which it is invalid or
unenforceable shall not be affected thereby, and each term of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
8.11 Counterparts. This Loan Agreement may be executed in any number of
counterparts each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, Lender and Borrower have and each has caused its
name to be hereunto signed all as of the day and year first above written.
LENDER:
FIRST UNION NATIONAL BANK OF VIRGINIA
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Title: Vice President
---------------------------------
BORROWER:
APPLE RESIDENTIAL INCOME TRUST, INC., a
Virginia corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Title: President
---------------------------------
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