Common use of Acceptance of Borrowing Base Properties Clause in Contracts

Acceptance of Borrowing Base Properties. (a) Subject to compliance with the terms and conditions of Section 4.1, Agent has accepted the Properties listed on Schedule 1 as Borrowing Base Stabilized Properties and the Properties listed on Schedule 2 as Borrowing Base Development Properties. Hereafter, if Borrower desires that Lenders accept a Property as a Borrowing Base Property, Borrower shall so notify Agent in writing and Agent shall deliver a copy of such notice to each Lender. No Property will be evaluated by Lenders as a potential Borrowing Base Property unless Borrower delivers to Agent the following in form and substance acceptable to Agent: (1) With respect to each proposed Borrowing Base Property: (A) A copy of the most recent ALTA Owner's Policy of Title Insurance (or equivalent) ("Owner's Policy") and a commitment (not more than 90 days old) to issue an American Land Title Association extended coverage Lender's policy of title insurance (or equivalent) covering such Property and disclosing the identity of the fee titleholder thereto, and all matters of record; (B) Copies of all documents of record reflected in Schedule B of the Owner's Policy and a copy of the most recent real estate tax ▇▇▇▇ and notice of assessment; (C) A current or currently certified survey of such Property certified by a surveyor licensed in the applicable jurisdiction to have been prepared in accordance with the then effective Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys (or equivalent); (D) A "Phase I" environmental assessment of such Property not more than 12 months old; (E) A certificate from a licensed engineer or other professional satisfactory to Agent that such Property is not located in a Special Flood Hazard Area, as defined by the Federal Insurance Administration; and (F) Such other documents with respect to such Property as Agent shall reasonably require. (2) With respect to each proposed Borrowing Base Stabilized Property: (A) An operating statement for such Property audited or certified by a representative of Borrower as being true and correct in all material respects and prepared in accordance with sound accounting principles for the previous two Fiscal Years, provided, that, with respect to any period such Property was not owned by Borrower, such information shall only be required to be delivered to the extent reasonably available to Borrower and such certification may be based upon the best of Borrower's knowledge; (B) An engineering report for such Property not more than 12 months old; (C) Copies of (i) the form or forms of tenant leases used at such Property, and (ii) all Major Agreements affecting such Property; and (D) A current rent roll for such Property, certified by a representative of Borrower as being true and correct in all material respects and a three-year operating and occupancy history of such Property in form satisfactory to Agent, and certified by a representative of Borrower to be true and correct, provided, that, with respect to any period such Property was not owned by Borrower, such information shall only be required to be delivered to the extent reasonably available to Borrower and such certification may be based upon the best of Borrower's knowledge; (3) With respect to each Borrowing Base Development Property: (A) the Lease-Up Projections; (B) the Construction Contracts; (C) the Construction Schedule; (D) the Project Budget; (E) Pro forma income and expense projections for the first 12 months of stabilized occupancy; (F) Area, market and comparable property information; (G) the Development Plans; (H) background information about the architect; and (I) background and financial information on the general contractor. (b) If, after receipt and review of the foregoing documents and information, Agent is prepared to proceed with acceptance of such Property as a Borrowing Base Property, Agent will so notify Borrower and each Lender within 5 Business Days after receipt of all of the information provided above, and Agent will obtain an Appraisal of such Property in order to determine the Appraised Value thereof. After obtaining such Appraisal, Agent will promptly submit the foregoing documents and information, including the Appraisal, and the Appraised Value to the Lenders, for approval by (1) the Supermajority Lenders if such Property, upon acceptance, would be a Borrowing Base Stabilized Property and (2) all Lenders if such Property, upon acceptance, would be a Borrowing Base Development Property, within 15 Business Days thereafter. Such Property shall become a Borrowing Base Property upon approval of the Supermajority Lenders or all Lenders, as the case may be, and upon execution and delivery to Agent of the documents and items described in Section 4.1(a) and 4.1(e), and such other items or documents as may be appropriate under the circumstances, including updates of the documents described in Sections 3.1(a)(1)(D), 3.1(a)(2)(A), 3.1(a)(2)(D), 3.1(a)(2)(B) (if then more than 12 months old), and 3.1(a)(2)(C), and satisfaction of all other closing requirements imposed by Agent. (c) No more than $50,000,000 of the Borrowing Base shall be provided by the Borrowing Base Development Properties. The minimum Stabilized Property/Development Property Borrowing Base Ratio shall be as set forth below: Subsequent to December 31, 1996: 0.70:1.0 Subsequent to March 31, 1997: 1.0:1.0 Subsequent to June 30, 1997: 1.25:1.0 No Development Properties will be accepted as Collateral after September 30, 1996, unless all Lenders otherwise consent, which consent shall be in their sole and absolute discretion.

Acceptance of Borrowing Base Properties. (a) Subject to compliance with the terms and conditions of Section 4.1, Agent has ----------- Lenders have accepted the Properties properties listed on Schedule 1 as Borrowing Base Stabilized Properties and of the Properties listed on Schedule 2 Effective ---------- Date as Borrowing Base Development Properties. HereafterAll Borrowing Base Properties (x) must be located in the Washington, if D.C./Baltimore Standard Metropolitan Statistical Area or the Richmond Metropolitan Area, as determined by Administrative Agent, or other metropolitan areas as approved by the Requisite Lenders, and (y) except for three (3) Properties, and the Worldgate Property, must contain more than one hundred (100) dwelling units. If Borrower desires that Lenders accept a Property an additional property as a Borrowing Base Property, Borrower shall so notify Agent in writing Administrative Agent, and the Administrative Agent shall deliver a copy of such notice to promptly notify each other Lender. No such additional Property will be evaluated by Lenders as a potential Borrowing Base Property unless Borrower delivers to Administrative Agent the following in form and substance acceptable to Administrative Agent: (1a) With A current operating statement for such property audited or certified by Borrower as being true and correct in all material respects and prepared in accordance with GAAP and comparative operating statements (in the general form of Borrowing Base Property Statements) for the current period and for the previous two (2) Fiscal Years; provided, however, that, if Borrower -------- ------- shall have owned such property for less than the period. to be covered by such operating statements, then the audit and certification requirements shall extend only to the period of ownership by Borrower, so long as Borrower provides operating statements prepared and certified by the former owner(s) for the remainder of the period required hereunder; (b) A current rent roll for such property and a three (3) year operating and occupancy history of such property or such lesser period as Borrower or any subsidiary of Borrower shall have owned or managed such property in form satisfactory to the Administrative Agent and certified by Borrower to be true and correct and with respect to each proposed Borrowing Base Property:periods that such property shall not have been owned or managed by Borrower or any subsidiary of Borrower for such three (3) year period, a copy of such information received from the Seller thereof; (Ac) A copy of the Borrower's most recent ALTA Owner's Policy of Title Insurance (or equivalent) ("Owner's Policy") and a commitment current (not more than 90 ninety (90) days old) to issue an American Land Title Association extended coverage Lender's policy of title insurance (or equivalent) preliminary report covering such Property property and disclosing showing the identity of the fee titleholder thereto, thereto (and any ground lessee) and all matters of record, together with copies of all such matters of record; (B) Copies of all documents of record reflected in Schedule B of the Owner's Policy and a copy of the most recent real estate tax ▇▇▇▇ and notice of assessment; (Cd) A current or currently certified survey of such Property property certified by a surveyor licensed in the applicable jurisdiction to have been prepared in accordance with the then effective Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys Surveys, including a certification that such property is not located in a Special Flood Hazard Area as defined by the Federal Insurance Administration not more than six (or equivalent)6) months old; (De) A "Phase I" environmental assessment of such Property property not more than 12 twelve (12) months oldold in form and content acceptable to Administrative Agent after consultation with the Lenders in connection with which the Administrative Agent will give due regard to the reasonable requirements of the Lenders; (E) A certificate from a licensed engineer or other professional satisfactory to Agent that such Property is not located in a Special Flood Hazard Area, as defined by the Federal Insurance Administration; and (F) Such other documents with respect to such Property as Agent shall reasonably require. (2) With respect to each proposed Borrowing Base Stabilized Property: (A) An operating statement for such Property audited or certified by a representative of Borrower as being true and correct in all material respects and prepared in accordance with sound accounting principles for the previous two Fiscal Years, provided, that, with respect to any period such Property was not owned by Borrower, such information shall only be required to be delivered to the extent reasonably available to Borrower and such certification may be based upon the best of Borrower's knowledge; (B) An engineering report for such Property not more than 12 months old; (Cf) Copies of (i) all Major Agreements, (ii) the form or forms of tenant leases lease used at such Propertyproperty and (iii) all material maintenance or service agreements affecting such property; (g) Copies of engineering, mechanical, structural or maintenance studies performed (if not previously performed, such studies as shall be required by Administrative Agent with respect to such property in form and content acceptable to Administrative Agent after consultation with the Lenders in connection with which the Administrative Agent will give due regard to the reasonable requirements of the Lenders; (h) A schedule of all personal property, including intangible personal property owned by Borrower or the Pledgor Subpartnership, as applicable, and used in connection with the maintenance or operation of such property; (iii) all Major Agreements affecting such PropertyA copy of any existing soil's report from a qualified soil engineer; and (Dj) A current rent roll for such Property, certified by a representative of Borrower Such other information as being true and correct in all material respects and a three-year operating and occupancy history of such Property in form satisfactory to Agent, and certified by a representative of Borrower to be true and correct, provided, that, with respect to any period such Property was not owned by Borrower, such information shall only be required to be delivered to the extent reasonably available to Borrower and such certification may be based upon reasonably requested by Administrative Agent in order to evaluate the best of Borrower's knowledge; (3) With respect to each potential Borrowing Base Development Property: (A) Property to include without limitation the Lease-Up Projections; (B) types of information provided by Borrower in -------- respect of the Construction Contracts; (C) the Construction Schedule; (D) the Project Budget; (E) Pro forma income and expense projections for the first 12 months of stabilized occupancy; (F) Area, market and comparable property information; (G) the Development Plans; (H) background information about the architect; and (I) background and financial information on the general contractor. (b) Borrowing Base Properties initially mortgaged to Lenders. If, after receipt and review of the foregoing documents and information, Administrative Agent is prepared to proceed with acceptance of such Property property as a Borrowing Base Property, Administrative Agent will so notify Borrower and each Lender within 5 Business Days after receipt of all of the information provided aboveBorrower, and the Administrative Agent will obtain an Appraisal of such Property property in order to determine the Appraised Value thereof. After obtaining approving such AppraisalAppraised Value, Administrative Agent will promptly submit the foregoing documents and information, including the Appraisal, information and the Appraised Value to the Lenders, for approval by (1) their consideration in deciding whether to accept or reject the Supermajority Lenders if such Property, upon acceptance, would be a Borrowing Base Stabilized Property and (2) all Lenders if such Property, upon acceptance, would be a Borrowing Base Development Property, within 15 Business Days thereafter. Such Property shall become as a Borrowing Base Property upon approval which decisions will be made by all of the Supermajority Lenders. Lenders or all Lenders, as agree to make a decision with respect to such property within ten (10) Business Days after the case may be, receipt of such documents and upon information and the Appraised Value. Upon execution and delivery to of documents and completion of all other closing requirements imposed by Administrative Agent (including without limitation provision of the documents and items or supplements thereto described on the Closing Checklist or in Section 4.1(a) and 4.1(e)4.1, and such other items or documents as ----------- may be appropriate under the circumstances, including updates and modifications of the any documents described in Sections 3.1(a)(1)(Dthis Section 3.1 or in Section 4.1, and the ----------- ----------- execution and delivery of those documents and instruments set forth in Section ------- 4.1 with respect to the addition of such Borrowing Base Property and the --- increase in the amount of Loan Availability occasioned thereby as may be required by the Administrative Agent), 3.1(a)(2)(A), 3.1(a)(2)(D), 3.1(a)(2)(B) (if then more than 12 months old), and 3.1(a)(2)(C), and satisfaction of all other closing requirements imposed by Agent. (c) No more than $50,000,000 of the such property shall become a Borrowing Base shall be provided by the Borrowing Base Development Properties. The minimum Stabilized Property/Development Property Borrowing Base Ratio shall be as set forth below: Subsequent to December 31, 1996: 0.70:1.0 Subsequent to March 31, 1997: 1.0:1.0 Subsequent to June 30, 1997: 1.25:1.0 No Development Properties will be accepted as Collateral after September 30, 1996, unless all Lenders otherwise consent, which consent shall be in their sole and absolute discretion.